All Forum Posts by: James Hartley

Hey Tom,

Could you send me more info and all the photos for these? Some of the images aren't showing (last 3)?

When you say conventional financing is accepted, how would that work for the package?

Looks like a couple of the leases are up soon, what happens then?

Cheers

@Soh Tanaka Thanks for that! I didn't realize you get a better mortgage after 6 months - what sort of rate improvement can you expect and why?

Hi Everyone!

This is my first non-introduction post, hoping this great community can help me out! I'm also new to real estate investing, so please give feedback and point out mistakes!

I'm looking at a $70K SFH that rents for $850, I'm buying cash but thinking about whether to finance (delayed mortgage) or not. I'm looking to build up a passive income stream over time, but I make a good salary at present. Here's my comparison between the two options, can you please check my maths?

**Cash**

$70K cash payment

$10200 annual rent, or $9690 with 5% vacancy

Expenses: $1600 tax, $500 insurance, $969 property management (10%), $510 repairs (5%), $510 capex (5%)

Net Income: $5,601 or 8% of $70K before tax

Property tax is 26% land, 74% improvements, so $51,800 depreciated over 27.5 years is $1,884 per year

$5,601 income, of which $3,717 is taxed, $1,884 tax-free

Assuming 40% tax rate

= $3717 * 0.6 + 1884

= $4114 after tax (5.88%)

**Mortgage**

$14K downpayment (20%)

Mortgage: 4.5% at 30 years fixed on $56K

$10200 annual rent, or $9690 with 5% vacancy

Expenses: $1600 tax, $500 insurance, $969 property management (10%), $510 repairs (5%), $510 capex (5%)

$3408 Mortgage payments ($900 principal, $2508 interest in the first year)

Net income: $2193 before tax or 15.66% on $14K

Property tax is 26% land, 74% improvements, so $51,800 depreciated over 27.5 years is $1,884 per year

$2193 income, $1209 taxed, $984 tax-free (1884 depreciation - 900 mortgage principal)

Assuming 40% tax rate

= 1209 * 0.6 + 984

= $1,709.4 after tax (12.21%)

Does my calculation look correct? 

I know I'm just treating the 5% capex as deductible when it's not (to simplify things), it would need to be depreciated over time. How would factoring this change the comparison?

Thanks in advance!

Thanks Suvir! Will definitely give your review a read and check out Ohio Cashflow. Did you buy cash or get a mortgage (in AU/US)?

Just listened to the episode with Engelo and it was great to hear a strong Aussie accent on the podcast haha!

Hey Chris, I actually moved out of Bushwick a few months ago, cool area. Would love to grab a coffee and hear about your experiences.

Another new poster! Thanks buddy, would love to hear more about what you're doing! 

Would love to, and will have to listen to your podcast to find out more about Ohio Cashflow!

Hi BiggerPockets community!

I'm looking to get into real estate investing after having worked for 10 years in tech, investing primarily in the stock market. I'd love to get to the point where I can sustain my lifestyle without having to work, so I'm going to need a lot of knowledge, good people, and rental properties!

I've lived in Brooklyn, New York for 4 years, but originally I'm from Sydney, Australia (another expensive market) and will probably return one day. I'm currently working in marketing tech, so I'm trying to figure out if there's a way I can provide some value based on my career experience.

Hope to meet you soon,

-James

P.S. Do you have suggestions for someone working full-time on where to find a good value turn-key rental?