All Forum Posts by: Brad Saari

@Jean Bolger

Agreed the Denver market is crazy and realtors need to have some wholesaling like characteristics to be "investor friendly" these days. No reason not to have an agent that fits the mold. Apologies if that was offensive to any agents :) 

Well there's Cash on Cash and Total ROI. The latter takes into account cash flow, appreciation and equity from loan paydown. What would you be doing with the money if not investing it in real estate? How well versed are you in other areas of investing, etc? I tend to think 5% cash on cash, and 15-20% toal ROI is better than it sitting in a savings account. That being said, 8% cash on cash is usually my line

Welcome

Haha, not sure about praying and every market is different but you'll want some cash flow after you cover your debt service and expenses. I usually use the 40% rule on expenses, but 50% certainly has merit. The 2% rule does not apply to my market

Anyone performed a cash out refinance in the last couple months? I'm wondering what interest rates you've seen. My refinance loan would be Jumbo/Non-Conforming, 30 year fixed, with a LTV of 90%. I realize the bank assumes a certain amount of risk but I'm seeing 2+ points over normal jumbo refi rates.

Craigslist is usually good. Realtor.com shows rentals as well

For grins lets say you get it for $225,000, and its ARV is $300,000

Lets call your cash outlay $65,000 (20% down, $20k for improvements) . Keep in mind some banks require greater than 20% for multi unit income property

Total Rents $2,980

Total expenses $1192 (at 40%, some people use 50% as a guide). Might I suggest you skip the PM?

Monthly P&I (180,000 @4.5%) $912

Where would you get the cash to put down? That's a big missing detail....I'll ignore that for now and assume you have the $65,000

Cash Flow = 2980 - (1192 + 912) = 876 or $219 a unit

Year 1 Cash on Cash = (876*12)/65,000 = 16%

Total ROI Year 1 (cash flow + equity + appreciation at 2%) = (10,512 + 2903 + 6,000)/ 65,000 = 29%

Numbers look fine if you have the $65,000 or someone is giving you a no interest loan...I did this very quickly by hand :)

let us also nor forget the time value of money. whats a dollar today worth in 10 years 

jermaine I have an owner occupied triplex that I cover with 1 mil in liability per structure - main house, carriage house. Im good with this until my portfolio grow some 

owning your home certainly is not a prerequisite for investing in anything. If you have equity in your home you can use that to get started - refi or heloc