All Forum Posts by: Jim C.

Jim C. has started 1 posts and replied 101 times.

Take the house(s) with the most land, fence it in and then rent the land for vehicle storage. The house will be used as an office/living quarters for on-site manager. Your only out of pocket cost will be the fence. You can add security cameras if needed.

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When I lived there in the 90's, Rio Rancho was the smoking hot place to buy. Many of the homes out that way were old then so they may be good for flipping now.

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Originally posted by @Cody L.:

Originally posted by @Jim C.:

Originally posted by @Cody L.:

Originally posted by @Jim C.:

what is the 1% rule?

Purchase price shouldn't be more than 100x rent. (conversly, rent should be at least 1% of purchase price)

i.e., $100k home rents for $1000/month = 1% rule. If it rents for $1200, it's "better than 1%". If it rents for $800, it's "worse than 1%".

I use that rule of thumb all the time. I bought a $6m property that I'd expect at least $60k/month of rent roll. It's actually $120k/month. so 2% rule. And this is near city center in Houston TX with plenty of land and appreciation.

I try not to be a strict rule of thumb buyer but bottom line, unless it's an A or NNN deal, a property will almost never cash flow if it isn't a 1% deal. Unless you're so heavy cash into the deal that your returns are crap -- which is just another piled on negative.

Thanks @cody L.

Is the 1% total rent for multifamily or average per unit?

In other words I'm looking at a 4plex which rents at 800/unit. Is a good purchase price $80,000 (1%/unit) or $320,000 (1% of total rent from 4 doors)

ok 80k is a much better price but which formula are you referring to

Obviously per unit. If I buy a 100 unit building that averages $800/unit/month I’d pay, at most, $80k/unit (8,000,000). Obviously I wouldn’t need to pay $80k total for the whole place.

This is just a general rule of thumb I’ve found to be the max you can pay and still cash flow with any decent leverage

I'm new to this game so nothing is "obvious" to me, thats why I ask questions. And why my question was based around a 4 plex, NOT a 100 unit building. But thanks for stepping off your high horse to answer, I know it must have been tough for you...

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I'm a newbie, ARV?

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I was an agent in NJ and there are MANY MANY agents who do this for so many different reasons I couldn't mention them all... Thats one of the main reasons I got out of that business.

If you're not an agent then go straight to the seller with questions. If they mention that they have an agent be completely honest with them about everything you have done to date.

If you have everything documented you can contact the local board of realtors but I don't know how much they will be able or willing to help. It definitely couldn't hurt

Good luck

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Thank you for sharing your story and living the American dream (freedom to make anything out of your life), you guys are in inspiration

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Originally posted by @Amy Batten:

@James Wise I’ve seen friends comment on local rental ads about how greedy the landlords are and how unfair it is for them to charge what they do. We have a very mixed market for our small community, there are people with very low incomes and then we have beautiful lakes that attract people with really high incomes. People feel that it’s unfair that a little tiny house on the lake can charge as much as it does When there are so many people in need of affordable housing. But landlords don’t have any trouble getting the rent they want.

You hit on what my comment was going to be.

Buy and rent in "A" neighborhoods (higher income) and avoid many of the problems found in low income areas.

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Originally posted by @Peter M.:

I think it is impressive you managed to anger Donald Trump and got him to write a comment about you. But in all seriousness I am with @Dennis M. on this. I don't particularly care. It is one thing to have tenants screaming in your face while getting evicted but a comment online? I try not to sweat the small stuff.

I too was surprised you rent to Mr Trump when he could just buy you out and not even notice the missing money LOL

Seriously though that could be considered a threat and you may want to notify your local PD and if legal in your state you should consider CCW

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If he is guilty of a crime you should consider getting rid of him just to keep peace with your neighbors and the HOA

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Originally posted by @Cody L.:

Originally posted by @Jim C.:

what is the 1% rule?

Purchase price shouldn't be more than 100x rent. (conversly, rent should be at least 1% of purchase price)

i.e., $100k home rents for $1000/month = 1% rule. If it rents for $1200, it's "better than 1%". If it rents for $800, it's "worse than 1%".

Thanks @cody L.

Is the 1% total rent for multifamily or average per unit?

In other words I'm looking at a 4plex which rents at 800/unit. Is a good purchase price $80,000 (1%/unit) or $320,000 (1% of total rent from 4 doors)

ok 80k is a much better price but which formula are you referring to

1 Vote

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All Forum Posts by: Jim C.

Jim C. has started 1 posts and replied 101 times.

Post: What would you do with 18 small houses on one street?

Post: New Member in Albuquerque, NM

Post: $100 dollars a door?!?

Post: 1% Rental Income Test

Post: Agent Representing Seller is Ignoring Me

Post: 27 y/o Female – 50k debt to $1M+ net worth (24 units,50 deals/yr)

Post: New Landlords - Are you prepared for the hate?

Post: New Landlords - Are you prepared for the hate?

Post: HELP! TENANT got lead out of my rental unit in handcuffs!

Post: $100 dollars a door?!?