All Forum Posts by: Jacob Sampson

During times of turn over, within my rentals, it will spike but I probably spend 4 hours a week managing my 16 units.  Most of that time is spent on phone calls and texts.

With a small timeframe like that, you will probably want to use a realtor. In fact, I use a realtor for all of my purchases. A word of caution, I'm not sure that REI should be done on such a short time frame. You increase your chances of failure by moving too quickly.

Why can't you find a place to rent, learn the local market, develop relationships with intelligent and honest individuals?  Not unlike poker, you want to make decisions that bend the odds to your favor, jumping in and blindly buying just because you want to get that first investment under your belt does not stack the odds in your favor.

Being young, this is the time to make mistakes and learn from them, but it's also the time that will be most difficult to recover from mistakes. For example, 2 years ago I purchased 5 duplexes all at once. My largest single purchase to date. There ended up being so much more deferred maintenance and problematic tenants than I was planning on. It took some time (a year and a half) to get the properties fixed up and old tenants out. Now things are great but if I hadn't had the capitol available to me, as a beginner, generally, doesn't, it would have crushed me and I would have thought twice about REI going forward.

This is a long term play, it's ok to take your time and do the things necessary to stack the odds in your favor. Lastly, I promise, unlike the stock market, your exposure to loss in REI is infinite. It is far more important to protect your downside than it is to maximize your upside.

...man I sure can babble.

I echo @Kory Thaut, I wish I had purchased a duplex, lived in one side and rented the other.  This has the added benefit of allowing you to learn the game before you dive into a larger purchase. 

Remember, you are most likely to make the most mistakes early on so make them small mistakes.

That crossed my mind as well.  I, personally, top out at 60 x monthly rent as a purchase price if I am going to buy and hold.  That's why I stated that the numbers don't work for me as a long term hold.  It sounds like you've got some great equity that you could put to work if you sold.

That's a nice deal.  For me the numbers don't work as a buy and hold, I think the properties greatest value is the equity, so I would sell.

I don't have much experience in taxes or accounting but I don't think you get to pick how quickly you depreciate.  The IRS sets the depreciation schedule.  I know that through an expensive process you can segregate out certain items in order to depreciate them faster but your stuck with the vast majority of the property value being depreciated at 27.5 or whatever the number is.

I think, long term, you have negative cash flow, probably significant negative cash flow.  Try the deal with 30% as your vacancy/maint/capex number.

I max out at 60 Xs monthly rent for purchase price, you are beyond 100xs.  I'm not a fan of the deal.

Oh, I don't see where you account for property taxes.

I don't see any glaring problems.  I max out at 60 X monthly rent on purchase price but I also only do 15 year notes.  Out side of those personal preferences, I think that would, generally, be considered a solid deal.

@Iman Yu

Well, if you agree with my opinion then you are a GENIUS!