All Forum Posts by: Joel Ray Cotton

I am buying a book of 6 properties, the seller that is pushing to sell quickly. The problem one of the properties the tenant is 5 months behind on the rent and he just started the eviction process. From my research I was told that once I take possession the law suit starts over and is mine to restart. He also wants to sue her for the $3500 in lost rent and garnish her wages. Can he do that if I take possession and finish the eviction?

I have realized that there are alot of people that post that they get $400-$500/door but dont post any details about their property. Purchase Price, Down payment, Interest rate, Loan Term, Hold back for Cap-Ex and vacancy. Is it illegal to post this info because it sure seems like it.

This is a pretty extensive article. Anyone experience any changes yet from the accounting/business side?

https://www.forbes.com/sites/anthonynitti/2019/01/...

https://www.forbes.com/sites/anthonynitti/2019/01/19/irs-publishes-final-guidance-on-the-20-pass-through-deduction-putting-it-all-together/#4208546d9f0b

Heres a spreadsheet summary of multiple things I have read/learned. This is all numbers that I running on a current property I am looking at. This should answer most of your questions, @Jacob Phillips. I agree with you that your Coffers (Vacancy Hold back,Prop Management,Taxs,HOA,Utitilities,Cap Ex,Replacement Reserves,Landscaping) should be considered cash flow but ONLY when the coffers are full.

What I believe everyone is trying to say is that you should account for everything and then run the numbers. You will see that I have inputed the 50% Rule, the 1% Rule (Hopefully 2%), DSCR, COC Return, Expense Ratio. If you dont understand these you should.

All of these rules in general give you an outlook on a property and the risk involved. Ultimately a lender is going to evaluate how much money it cashflows and the risk that you wont make the payments if you didnt account for Property Management, and Landscaping in case of health issues, and CapEx if you didnt account for problems that WILL arise.

Dont forget the final rule, pay your coffers before you pay yourself. (Once the coffers get full feel free to steal to buy more properties)

My name is Joel,

I have a friend who is looking to sell 6 of his rental properties and I have been evaluating the financials to see if they could be a good deal. His average rent between the 6 is currently $726, total $4625/month, and looking for $250k. Taking into account his current Insurance, HOA fees (2 condos, see image below), and property tax estimates. I have a couple different questions after you look through my PDFs below.

Ultimately I know that he is looking for around 250k for the deal, and with a standard 20% down evaluating it on a 50k COC return. Seperately I am looking to do a cash-back deal as I see that there are some deferred maintenance that needs to be done on the properties totally 30k at most. I am going to walk the properties in the next couple days to get a more accurate understand of that.

My questions are in regards to closing the deal and miscellaneous expenses:

How much does a title company charge to convert 6 titles etc?

I am assuming that each rental will need to Assessed and Inspected individually?

If I get a single portfolio loan how do I go upon negotiating release clauses so I can sell off individual properties if needed?

What is the premium in APR for going with an portfolio/commercial loan vs individual loans?

Is 20% down enough for most lenders if the properties are cash flowing like these?

I estimated 20% Vacancy which is a tad high but figured I would still be covered in all of my scenarios in my PDF, is this correct?

Be honest in your evaluation you cant hurt my feelings, Thanks in advance!

Just contact your utility company and ask them to add a street light. They will add the fee to the tenants utility bill. Keep you out of it and the city foots the bill and the maintenance.