All Forum Posts by: Joe P.

One thing people need to remember is that CF on a $500,000 4-plex varies significantly based on location.

I wouldn't find one, but if I COULD find a 4plex to hit the market in Philadelphia (especially in close proximity to Center City) and have four 2/1 units, even in horrible condition, for $500,000, I'd probably tap into my own 401k for that deal, because it would cash flow so ridiculously well and probably be a great appreciation asset as well. Nicely redone 2 bedrooms in our area can rent anywhere from 1300-1700 depending on amenities. That's pretty decent cash flow.

But if you buy a 500k 4-plex in the Northeast area, a 2 bedroom may only return $1000 per month. It's not enough yet all your costs are the same.

The 1% rule is annoyingly basic at times, but it is a good rule of thumb. I personally like the 50% rule because I think that's more realistic, but both just represent rules of thumb only.

Bahahahhahaahahahahaha that's certainly an "approach", but I wouldn't recommend it.

Yeah, this falls into "lifestyle choice" - they can do whatever they want. No doubt they saw the garage upon move in and said "I can't wait to put my useless junk in here!"

In South Philly, I see this everywhere. I'd murder someone for a parking spot or garage space because of how difficult it is to park. And yet I drive by people's homes with garages, and they're filled to the rafter with junk. It's annoying, its disappointing, but its THEIR garage.

So unless this has created something against the law for you, smile, nod, and walk on.

I'm in IT consulting for my day job -- I am a small guy and I absolutely try to have the most appropriate attire possible. A suit that fits, in gray, black, or navy. Nothing too outlandish. Enough to show I'm a professional, and I care about the details, because I do.

What you have to watch out for is the guy who dresses the best in the room AND is also the most talkative/know-it-all type. I spot these folks a mile away and they usually fall into two categories -- the orange cheeto (the new name I'm now giving that type of person) or the beautiful mind. 97% are the orange cheeto.

Breaking even as in no-cash flow with your (hopefully) conservative estimates? You might want to share your analysis sheet with us.

Is this a high-appreciation area or something? Why buy for break-even cash flow? 

@Brenden Mitchum I had the same exact thing when I purchased by duplex; the seller's agent was super old-school. Lets just say he asked for my agent's fax number on several occasions. He wouldn't respond to e-mails in a timely fashion and don't even THINK about asking about texting.

I ended up talking to the seller directly, because he had some concerns in general about our deal (I had underwriting issues) and I had issues with questions/disclosures I was not getting back. We ended up working through it together and then meeting at the table without any issues.

Long story short, there isn't a law that I'm aware of that prevents you from talking to the seller directly. If you are finding its more positive that way, your seller can speak to their agent about it -- I asked mine if she was OK with me doing that, and she said no problem.

Yes -- if the deal falls through this agent won't be happy, but again, you aren't doing anything illegal as far as I know.

So you can take this at face value - seller made a mistake and fixed it. Its now up to you to decide if its a problem. If it is $150 vs. $155 its probably not worth going nuts over. $150 vs. $250? That's $1200 a year and probably significantly messes with your CF.

You could take it a step further if its such a gigantic discrepancy, and wonder what else our friendly seller is lying about? That's a little tin-foil-hat to me, but it should put you on guard.

@Lien Vuong nailed it...I would reevaluate the numbers at the new HOA (and maybe get the scoop on what happened there) to ensure your deal isn't impacted. But if you were tight to begin with and this HOA change is significant enough, you might want to start asking tough questions.

Yep, so Brandon likes minimum of 100 p/d on duplexes and 200 p/d on SFH.

But the COCR is also important, exactly as he's indicated.

I'm working on a BRRRR SFH deal that if all facets (purchase, rehab, holding, tenancy, refinancing) go as planned, I will have INFINITE COCR because of a cash out refi, and my cash flow will be about $100 per month. Some people aren't interested in that because the CF is too low. But I'll have a tenant in essentially a brand new unit paying down my equity and stuffing a few bucks in my pocket, which after refinancing, cost me nothing (or even gave me cash).

That's why every deal should be evaluated on its own merit, not compared to others. Generally you want positive cash flow on conservative evaluations, be able to build equity, and do so in a well-appreciating, safe neighborhood. Not everyone can hit all of those on a deal.

Oh man, this thread. Personally, I am losing my f^*(ing mind looking at these pictures. But you can't control how people live.

This has ignited a question in me for @James Wise @Nathan Gesner @JD Martin - do you guys perform (or do you have a PM) perform inspections? If so, what is their frequency, what are they looking for, and do you have any processes for curing/quitting anything found?

I was on one of his video podcast things, and I recall him saying his minimum is $100 per door.

I also thought I saw it in his book -- which I have lent to a friend and I am getting back this week -- so I can't be sure.