All Forum Posts by: Jacoby Atako

 I get using it for quick numbers, etc, but I think it actually makes you miss out on opportunities if you use it to eliminate properties that don't meet "your criteria."  Example, I bought a townhome last year, that met the .7% rule, great cashflow lol.  

 I think that 1% rule is mainly for the midwest.  If you only lived by the 1% rule, no one would EVER buy in California (or places like vegas) because according to that rule you couldnt make money.  But I am pretty sure the investors I have met who thrive in CA (and Vegas) don't need the 1% rule to make a great profit.  Here in Vegas we don't have to worry about hurricanes and floods, or snow removal, and houses built in 1905, and termites, and mold (rarely).  Tile roofs, which account for pretty much every house built after 1990, last 60 years, so you rarely need to price in replacing an entire roof.  The rule is definitely market specific.  

Originally posted by @Casey Powers:

Originally posted by @Terry Lao:

@Casey Powers

I agree with you and the drama/issues with 4plexs in bad areas. I'm just saying based upon your numbers above, I don't see a $450 month, net positive cashflow. The PI payment alone is $750, but your PITI is $750. Maybe your numbers pan out if you bought during the bottom of market in Feb'12, but not today.

I put my numbers for lowest price 4plex currently in LV for comparison.

I am not sure why you insist the payments are higher than I'm saying. The PITI is $750/month, actual real life numbers. $750 total fixed cost per month, before repairs. This isn't a projection; this is a real life example.

Repairs: Warranty $480 per year for premium service, $75 service call. $50 repair deductible in the lease. Actual repair cost to owner for the vast majority of repairs: $25 per incident. Most SFRs have a repair issue maybe 4 times a year or less, in my experience. But assume $100-150/month for capex. So it’s really more like 8-9% annual cash on cash return for this property. As-is. Closed in January 2021.

Then there is forced appreciation and rent value add, which I didn't talk about before. Much easier to do that on a SFR than a 4plex in this town. In the 4plexes you're contending with the awful neighborhood so the rent values there, pretty much can't be raised unless you buy the block and improve the whole neighborhood. Putting $5-10k into a SFR can raise the rent value $100 immediately. And help attract best possible renters who stay longer term with far fewer issues.

Not likely to get $850 rent consistently on the cheapest 4plex in town. Those projections don’t look realistic to me at all. 

My experience dealing with all the various types of rentals in Las Vegas is SFR is more profitable than smallplexes, especially long term.

I don't know if it's intuition or what, but I get the feeling you don't like 4 plexs in vegas LOL.  Those experiences you referenced before are just, just....I couldnt even come up with that much crap in my imagination.  

Yeah it's pretty common to have to pay during closing just like a regular loan, but that's also why there are so many scams too.  That's why I think it's better to go with a reputable company even if you have to pay a little more.

I am not sure if that comment was intended at me, but I can tell you my initial conversation with the "investor friendly" realtors was pretty similar.  I told them I wanted a 6%+ cashflow.  I gave them my parameters in terms of the type of property I was looking for (area, 3/2, min square footage, age of the home, etc).  I got my letter of approval from a bank and proof of funds in case I decided to buy in cash.  

A few properties came up but never met my criteria and I was told that it was going to be pretty hard to find those numbers in Vegas because the market was so hot.  I started doing my own search and turned my notifications on and was able to find a GREAT opportunity that hit everything.  I got the notification at 9pm at night, went to see it at 8am the next morning, then decided to call the listing agent directly.  She was very open and gave me her insight, but then also mentioned there were already 3 offers on the property and they were planning on doing a highest and best.  I was a little discouraged, but also realized that I could find houses myself and just had to be willing to work outside of a realtor.  None of the realtors I had spoke with before even had time to get to that property by then.  

A few days after that I approached someone I knew from my full time profession (off market) and ended up buying that house.  Was pretty enlightening on working outside of a realtor.  

@Matthew Mazur

That's awesome. Thanks

@Ryan Moye

Sorry, just wrote that last comment quickly on my phone and noticed a TON of typos lol

@Ryan Moye

You should check out this book, "finding and finding good deals." It goes ovee, in detail, how to calculate your numbers for wholesaling and strategies to make money.

Songs like the only realistic option on this is a short sale, but that heavily depends on what the seller means by selling for $50k. Is that AFTER the mortgage is paid off? If so, that's buying the house for$30k ABOVE your ARV... Not good.

The other potential option to look at (which definitely know the laws in your area because this can get a little gray) is finding out what that house would rent for and looking into a wrap around or subto opportunity if the rent would justify it. In this case the seller would really have to be willing to walk away since there's barely any equity

@David M.

My first purchase was my primary, which we went through a realtor, but I actually found the home myself (before I decided to invest). The next 2 were off market with the contract I googled.

Truthfully, in this market, it just seems like the best opportunities I find are outside of using a realtor. Doing that helps me cut out a lot of costs, but it's way more time consuming.

I'm not a super investor, but want to buy 1-2 houses a year for the next few years and then let them build on their own. So doing a little leg work when I start shopping isn't really that bad since at this point it only takes a few months to find a good deal (so far).

I own an insurance agency and never realized how many opportunities I come across through clients. Hitting up your insurance agent is a really good, untapped resource. Houses that have flooded, or distressed situations come up often.

@Matthew Mazur

This is how I hoped working with a realtor would be. It seems like a lot of realtors don't go this far in terms of knowing a basic idea of the numbers.

I would love to write my own LOIs. Is there a specific format or fillable document that you give your clients? The first house I bought I literally googled "Nevada purchase agreement" and found an E-forms contract that I used.