All Forum Posts by: Kirk Spillner

Taking out all the logistics of the equation, its definitely fun thinking of out of the box ideas for that Church or any church for that matter...so just for kicks...here we go!

• - What about renting the space to other entities like AA or NA which are often tied to churches
• - I really like the idea of rezoning for a brewery with a play on words regarding the church...The Lord's Brew...etc you get the idea. Or...just call it The Church Brewery...Hey babe...headed to Church be back in an hour!
• - Dance Club
• - Pool Hall 
• - Hostile

Such a big open space and the building is awesome looking...always fun to see people thinking outside the box and making life and real estate more interesting!

Lots of good advice from the previous replies. Just to build off what was said before and to add my two cents as someone that sold appliances for a few years...ask a sales associate what the best bang for the buck is. Often times, clients would come in demanding "the cheapest one, its for a rental" and be done listening to my advice out of fear of trying to be upsold. In reality, usually for a few bucks more you can get a unit that will likely be more efficient, won't scream "my landlord is a cheapskate that doesn't care about us," and be longer lasting while still not having all the bells and whistles which are rarely used and likely to cause issues down the road. 

I'm a strong believer in not buying the cheapest option and treat your tenants the way you want to be treated. Sometimes that advice may cost more up front, however will likely save you in the long term. 

Hey Rob,

Thanks for the reply. I appreciate the clearing up that the 1-2% and the 50% "rules" are just rough guidelines. After running numbers on multiple properties in multiple areas I have come to the conclusion that many weren't holding up to those rules (while still appearing to be viable options.) Therefore, I felt maybe I was missing something even though I would consider myself a very conservative investor. Also, to clear things up I was not expecting to only have an initial investment on any rental units less than a LTV of 75%. I was trying to show that the cash flow should be as close to 10% of your initial investment as can be...otherwise it would make more sense to stick our money in the stocks.

After self educating myself on blogs, podcasts and threads I think I have come up with a basic list to analyze property for myself. If someone could just look it over and tell me if I'm missing something that could limit my ability to weed out a good deal vs a bad one I would appreciate it. I appreciate all criticism!

• Cash flow/Initial Investment: Should be around 10%?
• Initial Investment:  Money down + rehab estimate + closing costs
• Cash flow/Assets: 
• 50% Rule: 50% of rent will go to expenses not including the P.I.
• 1-2% Rule: Rent should be 1-2% of purchase cost
• CAP Rate: 5-10%?
• Operating Expenses: Taxes, insurance, off-site management, repairs and maintenance, permits, advertising, vacancy (12%), Misc; and Lawn care
• Net Operating Income: (Potential Income – Vacancy = Gross Income – Operating Expense = NOI)
• Cash flow before Taxes: NOI – Mortgage payments
• Taxable Net Income: Includes Depreciation
• Rentometer.com: Estimate of what avg. rents are for the area

Hey Samir,

Welcome to the BP community! I'm also located in Livermore and I am just starting out like yourself. So far I have benefited a lot from listening to the podcasts as well as from the site. Have you heard of any local REIC meet-ups? Looking forward to hear from you.

Congratulations Richard! I am also looking to take the test here shortly. What did you do to prepare for the test? Also, what would you suggest to focus your studying on. Thanks!