All Forum Posts by: Lana Lee

I have a great guy, name is Charlie , handles anything from a stuck drain, to broken window, even evictions and lock outs. Charlie ‭two six seven994-three five two

Hi everyone, 

I'm looking for a real estate agent to help me set up automated alert system and allows me to see properties on the MLS that fits my criteria. I had recently been pre-approved for a loan in Easton, PA, but I haven't found any properties there that provided me with enough confidence to invest in so I have diverted my attention over to Philly.

I'm looking for single or multifamily properties that are in the $150k or below that cash flows well. I would consider properties that requires a small amount of rehab. Since this would be my first property, I'm not quite ready to take on anything too drastic.

Thank you!

Susan

@Nathan Platter - Thanks for all of the help and tips! I'm an analytical person, so I like to run it both ways between breaking things down completely and the 50% rule. It gives me that warm fuzzy feeling inside. Also, if you don't mind sending me the calculator you built for generating the Investment Brochures, I'd greatly appreciate it!

I tried finding a rule of thumb for estimating insurance, but had no luck. So thanks for the .5% of PP estimate! 

@Brie Schmidt - Thanks for breaking down your CapEx budgeting methodology. GREAT idea! I'll be using this concept moving forward. If you don't mind me asking, where did you generate the estimated costs for each CapEx item from? Historical experience? Or do you have a rule of thumb?

@Megan Phillips - I appreciate the input, Megan. $40,000 is my down payment. $200,000 is my target purchase price where I feel most comfortable. I believe this is achievable, based on how long the building has been on the market, the number of properties available in the area, and the current owner's eagerness to sell. If we aren't able to negotiate anything close to that number, I'll just move on to the next one!

Thanks again for all of the input, everyone! It's highly appreciated! 

-Josh 

Hi all! I recently sold my SFR that I was renting out - it was my first home I decided to keep to "get into the biz" but the numbers just weren't working. I was able to get some proceeds from that sale and I'm ready for my first purchase.

I found a property in NJ (I am in PA - Philadelphia) close to me, and the numbers seem almost too good to be true. I hesitate to give away too much info so I will provide some raw information that I think should be helpful:

Purchase Price:  $120,000

Financing:  Conventional 25% down at 4%

Yearly Taxes:  ~$4500 (thanks NJ...)

Units:  2 (one 3BR and one 2BR)

Area Rents:  ~$1000 for a 2 BR

I've run the numbers at $2000 per month for both units ($24,000 annually) and a 10% vacancy rate...$21,600 in NOI

The mortgage would be around $1000 per month for PITI (perhaps even slightly less)...$12,000 in TOE

• Cash flow is $800 per month
• CoC Return is 32% (!!!)
• Cap Rate is 8%

Unless I'm wrong, this seems like a no-brainer deal with great numbers as an investor, no? What am I missing?!

I guess It comes down to how hard you want your money to be working for you. 7k-10k per year in savings is nice and you can keep collecting that by doing nothing more than you're doing (as long as you don't run into any repair expenses as it sounds like the property isn't making enough to save for that.  But your money could work a whole lot harder if you sold, then took that $112k and used it as 25% down payment to acquire 10 units cash flowing a total of $2500 per month after all expenses. That would be $30,000 a year from cash flow plus the yearly principal paydown.

I purchased a studio condo in 2013 for 110K in Philadelphia (Fairmount 19130). I refinanced to a 3.25% 15 yr mortgage in 2014. Due to life, I moved out January 2016 and I'm currently renting it out. The monthly rent is $1149. It pretty much covers the mortgage, HOA fee, insurance and taxes. However, it delivers no cash flow and my only return is the equity when I sell. How long should I hold? Is there a general rule of thumb? In 12 years, the loan will be paid off which would result in a significant monthly cash flow. But should I sell now before the next crash? How do I judge the carrying risk? I know the answer varies and depends on the numerous factors so let me know if I can provide any more info. Just wondering if there are any general rules of thumbs out there.

Thank you all for your input.

I’m leaning towards a heloc because I just got off the phone with my bank and they are talking 5-7k in fees for a commercial line of credit on the property and only 70% max.

I do read a lot about the delayed financing option but I would need to use rental income in the new property to qualify for a refinance and have yet to find a lender that will use that right off the bat. Lenders in my experience want anywhere from 4 months to 2 years of rental income before they will use it.

Seems like road blocks in every direction. Sometime it feels like a need the secret password to make things happen.

There are some details missing for specific advice, but I think a HELOC is your best tool to built a portfolio (if you aren't rolling in cash, of course.) We have used a HELOC on our primary to acquire all of our investment properties and it has served us well.

As for AirBnB, something you need to take in to consideration is that the expenses are higher and it will take significantly more of your time to manage- if you can make a great return on your time, that's awesome. You have to furnish the unit, maintain the furnishings, clean the unit, wash and replace linens, prepare, greet and serve new tenants fairly regularly, etc. My advice if you do this is to closely track the time you put in to it, depreciate the furnishings and look back after a few months and see what you are paying yourself per hour. If you are happy with that number, soldier on. If not, maybe you try something different.

Best of luck!