All Forum Posts by: Jeff Brower

Need more info. Monthly Tax amount AFTER sale, aka after re-assessment at 540k? Management cost? Vacancy rate? etc? You mention its just been renovated but you will still want to factor in a small capital expenditures/ maintenance cost.

Right now your monthly rent is $3600, which is not even close to the 1% that most try to find. Are you buying for cash flow or potential appreciation?

Try out the BP calculator and see what it gives you.

wayne is correct. You, as a buyer, pay nothing if the home is listed for sale on the mls through a realtor.

If the home is for sale by owner, and the seller does not want to pay your agent, then you may need to pay for your agent out of pocket. But that is really one of the only cases where you would pay as a buyer. Normally in this case your agent would go to the seller prior to showing and ask if they would be willing to pay them a commission (normally around 3%). If they say no, then your agent would write it into your purchase agreement that you would pay them directly at close.

I am on the leverage side. Your return on equity goes down as your loans are paid off, so it makes sense to me to keep leverage on them and invest that 'equity' in higher returning assets aka more homes. If mortgage interest is tax deductible, it makes sense in my mind to keep paying it. At a certain point, I can see the scales tipping to paying off the loans, but if you are in your growth phase, leverage is the name of the game.

@Joshua S. It is a requirement if you are with KW and I would assume with many other brokerages. My local association offers a ton of free training and free continuing education classes which are required in ohio. Every 3 years you must have a certain number of hours of training in specific areas. 

Also, if you do a few deals a year, all of your costs are tax deductible from your income.

I am a part time agent with KW. Split here is 70/30. There is a monthly fee I get charge through my office which equates to around $40 per month. You have to pay for your national, state, and local realtor association dues separately. I have my license more for personal investments, and to help friends and family. If I didn't do one deal, it would cost me between 1500-1800 per year. They offer a ton of training at my office, all free. I would recommend KW if asked.

They will do a 4 unit with 3.5% down. They will use 75% of projected rents for your DTI. Projected rents being the lower of appraised rent or current rent (if current leases are in place). I just went through the process on a 4 unit that I did not end up buying. These are the numbers they used. A 3 or 4 unit must also meet the self sufficiency rule (75% of total projected rent must cover PITI plus mortgage insurance).

One of the BP podcasts guests made this suggestion on her short term rentals where the town had a minimum 30 day stay. She had a 'cancellation' policy where the guest had the option of cancelling the rest of the term after a day or two. Not sure how that would pan out but that is what came to mind when I read your post title.

Painesville is okay in some southern areas or right near Lake Erie College. But there are some bad areas there that could be considered a C-. Near the Painesville exit off of RT 2 you can usually find some SFRs for 30k, which tells you something (not good). 

Mentor, Willoughby, Eastlake are all good. Mentor is higher class (especially southern) and homes go fast there when they are in the Mentor school district. I cant comment on much west of Painesville, but I do know that Perry is going through some turmoil with the power plant on the verge of closing so that area may become a bit more depressed for a few years if the plant closes and 700 jobs disappear

They are all on 1 year leases and they expire at the same time? If they have time left on their current lease, you need to honor that lease until expiration, I am sure you already know this. I would recommend increasing them one at a time as their leases expire, so you are not stuck with 4 empty units at once.