All Forum Posts by: Jayson Trierweiler

@Mack Benson

Thanks Mack! Can a joint venture be more than two people if my father in law wants in?

My brother-in-law and I would like to invest in buy and hold, SFR, together. What is the best way to structure our partnership? LLC? Some other form of partnership?

Thanks!

I love this thread! I have been very very close on numerous occasions to buying TK properties (from "reputable" providers over the past year. I never pulled the trigger because I cannot make the numbers work due mainly to maintenance/capex. I heard tons of testimonials about how great TK was working out for people, but those people had all just bought their properties in the last 6 mo - 1 year. I'd like to hear from someone who bought a turnkey property 5 years ago and see how they are doing. Except that test won't work because they probably paid way less for the property so they might be doing great. 

For me it all boils down to this:

At current prices, long term TK investing won't pay out due to maint/capex costs.

Short term ( sell in 5 years or less) TK investing is very risky because the exit strategies are more than sketchy (closing costs, not much appreciation if any, lack of buyers due to imminent capex needed, etc.)  

I say all of that to say thanks @Joe Kim for the post!

What rate could I expect if I have a 775 credit score, 100k in the bank, stable job etc etc etc, for a 30 yr fixed rate, investment property, 20% down, 60k loan?

Thanks! 

@Alexander Price thanks for answering!

Congrats! I have been considering TK as well but I can't seem to make the numbers work when I factor in Cap Ex. I am also struggling with a viable exit strategy. Can you share your thoughts on those two things? (CapEx and exit strategy)

thanks!!

I don't want to just hope for the best. This sounds a lot like gambling? If the gross cash flow is eaten up by vacancy, R&M, and CapEx, over 5-10 years then I haven't gained anything.

@Mike Dymski Thanks for the feedback! On my excel chart i can plug in remaining life in the "Life years" column so on any potential property I can plug in numbers as you suggest. I'll definitely consider LTV as well as adding those items. thanks again!

Essentially is as follows:

New Lease Fee (one month’s rent) + Expected Missed Rent + “Refresh” Cash

(Refresh Cash = the amount out of pocket to prepare the property for new tenants, after tenant deposit is spent)

It looks like this:

(A/B)+(A*C / B)+(D/B)

Where:

A = New lease fee (1 month's rent) ($1,000)

B = # of Months in lease (24)

C = Expected # of months vacant in-between tenants (1.5)

D = “Refresh” Cash ($500)

In this example:

($1,000/24) + ($1,000 * 1.5 / 24) + ($500/24)

Which is:

41.67 + 62.5 + 21 = $125 which is 13% of monthly rent in this scenario

The equation allows me to make a judgement call in many different scenarios. For some tenants maybe my refresh cash will be $300 and for some it may be $1000. In some markets maybe my expected months of vacancy would be 1 and in some cases 2. Etc. etc. etc.

Your thoughts? Too conservative? Too liberal? Pretty good?

When I use this methodology, on top of my capex/RM analysis, I can't see how 99.9% of turn-key opportunities could possibly make sense.

These assumptions are based on a particular sqr footage. But how do you think the basic methodology works?

thanks!