All Forum Posts by: Jeffrey R. White

Thanks for all the post on Louisville.  I have not had an offer accepted in Louisville yet even with OVER full price offers.  Hot market there for sure

40215?  Seems a lot of the quality turn key homes are going for over asking.

Cash Flow Question

I have a CASH FLOW question. I searched the forums for an answer and could not find one. Forgive me if this has been answered.

When calculating cash flow is cash flow based on solely total purchase price, or is it based on purchase price minus down payment? Hypothetically it would look like this

$100,000 property - Put 20% down and finance $80,000

This scenario calculates cash flow on $80,000 ($100,000 less your $20,000 down payment)

Rent $1200 Month

Expenses - $980/ Month (P & I, Taxes, Variable Expenses of Cap Ex, Vacancy, Maintenance, and Management Fees)

$220/Month Cash Flow

11.50% CoC ROI

OR

Include the down payment amount, plus amount financed?

$100,000 property - Put $20,000 down and finance $80,000

This scenario would calculate cash flow on $100,000 irrespective of any money put down.

Rent $1200 Month

Expenses - $980/ Month (P & I, Taxes, Variable Expenses of Cap Ex, Vacancy, Maintenance, and Management Fees)

$135 Cash Flow

5.4% CoC ROI

I hope this is clear.

Sincerely,

Jeff

Have you purchased any of these homes/lots?  Thank you

Calvin,

I have yet to buy my first rental but working on that.  However, I will offer my opinion since you asked.  It all boils down to your time.  It sounds like you are more than capable of the skill needed in doing your own work.  Ask yourself if your time could be used more efficiently securing deals, finding more contract work for your business, time with family friends, doing volunteer work, and simple free time for your self.  If you have the time to save money doing your own work I say go for it.  If you are spread thin and can make better $$ hiring out work then consider that alternative.

Check out a book that Brandon Turner mentioned on a podcast titled Who Not How:

https://www.amazon.com/Who-Not...

This book opened my eyes up in a few areas I needed to let go and hire others to do.  

Best of luck in your journey!

Sincerely,  JW

Interesting article on Knoxville:

https://www.fortunebuilders.co...

Clayton,

Great success story.  I love hearing how people work around problems.  There are always problems to be solved.  

How was the day to day construction? 

Did you keep tabs on the builders pretty close/hands on? 

You use a GC or sub everything your self?  What area code is this?

Does each room rent for about $525 ($2100 / 4 = $525) How things at the U of A with Covid this semester (Fall 2020)?

How do you screen your college tenants?  I imagine mom and dad might be on the lease ?

I have contacted a few realtors in your area and am looking.  I hope to make a trip out there soon.  Last time I was in Tuscaloosa was early 80's.  I am sure it has changed.  Thanks for sharing your build!

JW

PS Sorry so many questions too!

I've been looking into Mobile, and Tuscaloosa.  Montgomery sounds interesting too.  My first look at this market popped up a house at:

2101 Capitol Ave, Montgomery, AL 36107

Zillow shows rents at $1000, BP calculator shows more like $800.00.  Priced at $95k but market appears to have it at $110k valuation.  I put a purchase price of $87500

https://www.biggerpockets.com/...

What do you think of these numbers @Cristi Millo, @Joseph Back and @Cody Landry?  I've shared the Rental Calculator here; address is included as well.  Please feel free to change numbers since you probably know the realistic numbers of the area.  Looking forward to hearing about your 2021 Cody.

What are the best zip codes in Montgomery for investing?  Appreciation playing a part in your decisions?

I have been analyzing a lot, A LOT, of properties and trying to understand the various markets I like.  In other words I am a newbie looking for my first purchase.

I am originally from Mobile, AL.  I have resided in Southern California for 30 + years.  Set to retire in about 5 years from the fire service and wanting to build a passive income flow.

MOST IMPACTFUL RE BOOK TO DATE:  

Blessings!

Jeff White

Under the Rental Property Calculators in TOOLS it would be very helpful to be able to create folders to keep your reports in.  FOR EXAMPLE if evaluating properties in different cities you could have a folder for Anytown USA, My Town USA, and Your Town USA instead of having various regions all mashed together.  Folders one may name for what ever purpose they deem suitable.  Thank you.

Are there homes you can turn into a multi family property? Not sure of the zoning in LV. How are the ADU laws there?