All Forum Posts by: Johnny Weekend

Home is from the early 1970s. We went with a basic level of rehab. Crisp, clean and fresh. New appliances and flooring in the kitchen. Painted cabinets white and installed an inexpensive countertop. The rest of the home had wood flooring which we brought back to life. New coat of paint inside the home and new ceiling fans.

For Fayetteville there’s no value in over improving. We strive to deliver a safe, clean & affordable home that a family can be comfortable in.

How did you manage all the improvements if you aren't local. Have you done business in that area before so you have a team?

1 Vote

Originally posted by @Russell Brazil:

@Johnny Weekend

Yup I guess that is where every investor comes up with vacancy rates. We read the tenants minds.

Please educate, how do I find the actual number to use for vacancy?

0 Votes

Originally posted by @Russell Brazil:

@Johnny Weekend

Well your reply to that should answer the question as to whether the cash flow goal is possible. You have to use actual numbers. If you are using numbers that are guesses, or hopeful....then you wont get an accurate picture of what the true cash flow is. Is the vacancy rate really 8%? Or is it really something else. Picking numbers out of the air for expenses and looking to hit a certain goal isnt any different than making up a rent number to inflate the income on the other side of the equation.

You are saying I should read the tenants mind and predict if they will stay 1 year or 10 years. Ok got it. I may as well predict the lottery numbers while I am at it.

0 Votes

Originally posted by @Russell Brazil:

I cant imagine why anyone would invest in a location that is expected to be vacant 1 month every single year.

I am expecting it to be vacant but I want to budget for it however. If it isn't vacant then great, extra money that year.

0 Votes

Originally posted by @Denise Evans:

@Johnny Weekend, your assumptions are good. If I tweaked them at all, I'd change your 8% vacancy to a 10% vacancy and credit losses factor, which is the one banks and appraisers use. That includes vacancies, lawyers, evictions, etc. You can do this in Alabama. But, I think under $140K for 4 units is low, unless there is significant deferred maintenance or you are looking at Section 8 eligible housing. What gross rents are you expecting at that price point?

To make it worthwhile the total annual rent should be closer to 20k.

0 Votes

Originally posted by @Account Closed:

I dont see expenses that result from all things EVICTIONS.

I don't have that specifically budgeting so that is why I am trying to push for $5k cash flow so if I end up at $4k I am still good.

0 Votes

I am looking to invest in an out of state (I am in Southern California) property, likely 3-4 units.

My goal is for an annual cash flow of about $5k after all expenses (including mortgage) are paid.

I have been looking at properties below 140k. So far I evaluated deals in Alabama and Dayton OH.

My assumptions are:

25% down loan

8% vacancy

property tax are around 2000 per year

insurance 1500 per year

maintenance and cap reserve 2000 per year

utilities - what the current owner is paying

property management 10%

When I use these assumptions I am getting a lot of properties that will cash flow about 3.5-4k per year.

Are my assumptions or goals unrealistic?

I am looking at 3-4 unit properties because they seem to come close to my goals, single family houses seem to cash flow only 100-200 per month which in my opinion is a thin margin.

thank you. Appreciate your thoughts.

0 Votes

All Forum Posts by: Johnny Weekend

Johnny Weekend has started 16 posts and replied 37 times.

Post: FAYETTEVILLE NC SECOND BRRRR DEAL WITH PICTURES & NUMBERS!

Post: Are my expectations on annual cash flow off?

Post: Are my expectations on annual cash flow off?

Post: Are my expectations on annual cash flow off?

Post: Are my expectations on annual cash flow off?

Post: Are my expectations on annual cash flow off?

Post: Are my expectations on annual cash flow off?