All Forum Posts by: Michael Wentzel

@James Lucero

Many investors do talk about targeting $150 to $200 per door after all expenses. But like @Jon K. said, there are too many variables to say what the income off a single-family property should be.

I would run your numbers.

Monthly Rent minus all of your expenses...

Property Taxes

Insurance

Utilities (often you don't pay any of them for a single family)

HOA (hopefully you don't have one)

Repairs (many take around 8% of rent)

Capital Expenditures (many take around 8% of rent)

Vacancy (many take around 8% of rent)

Property Management (around 10% of rent)

Mortgage payment (principal and interest)

If you are a still making $200 in cash flow per month after all of that, you are doing well. The best part of real estate is that you should hopefully be making more than just cash flow. You'll also be building wealth through paying down your principal balance on your loan, hopefully some appreciation and usually paying a relatively low tax rate on this income.

Mike

@Tony Marcelle

Good question. As we head into August, I'm wondering what other landlords are experiencing with their tenants. 

We have 25 units in Pueblo, Colorado and 10 units in NE Ohio. We would consider most of them C-class properties. They are older houses and we have fixed them up. We have only 3 or 4 of the units on section 8. With all of that said, we have one tenant behind on rent in Colorado and one behind on rent in Ohio.

We do feel fortunate to have great tenants and property managers. But I still wonder what is happening. Did the majority of our tenants just manage to keep their jobs. Or did tenants use their stimulus checks and unemployment to pay rent and the worst is still in the future?

On the good side, we have found title companies much more willing to do online closings. We live overseas, so this is pretty key for us acquiring new properties and refinancing loans. Six months ago, many title companies we dealt with in Colorado and Ohio didn't want anything to do with online notaries or online closings. Now it seems much more common.

Mike

@Olaseni Akinlade

Thank you for posting your analysis. If you can get $1900 per month in rent for a property that you purchased for $55,000 and renovated for $7,000... that will be awesome. I would definitely check the rent numbers with rent-o-meter and a property manager in area. I would also make sure I knew that area and that the property is likely to perform as the analysis shows. Sometimes really good numbers on paper don't translate into actual numbers because of the realities of the neighborhood.

Mike

@Cody Ford

That is good news that the place could rent out for $1600 when you move out. The bad news is that if your monthly payment is $1400, you are probably not going to cash-flow when you factor in vacancy, repairs, capital expenditures and property management. You are still building wealth since you're paying down the principal each month. And if you are in a good area, you might get some appreciation.

You are also learning to manage tenants with your two roommates. So you are learning a lot, building wealth and you haven't lost any money. So it sounds like a good start to me.

Mike

@Gustavo Ortega II

Welcome to Bigger Pockets and Real Estate Investing. You are at the right place to learn. @Don Konipol makes some good points. But that doesn't mean you can't find a wholesaler in your area and offer some free labor in exchange or learning some of the process. Seeing houses and deals and watching how a wholesaler closes a deal would be extremely valuable to you right now. And you might be able to exchange some labor stuffing envelopes, cleaning out houses or door-knocking in order to gain some experience.

If you are interested in wholesaling, I would also go back and listen to all the BP podcasts that focused on the topic. I would also try to get to some local meet-ups so you can meet wholesalers and other investors. 

Mike

@Cody Ford

Good job getting started. And congratulations on getting into a property with no money down. That is great.

My concern would be that you are only getting $875 a month in rent on a $208,000 property. My guess is that would be be difficult to cash-flow after all expenses. If you put a family into it, will you get a higher rent?

Mike

Hello everyone.

We have been investing in Pueblo since 2013. We love the market. I have some great recommendations for property management and lending in Pueblo. We have also worked with a lot of contractors in renovating 19 properties over the years. 

If you find anything that won't work for a flip, but might work for a buy-and-hold, let us know.

We live overseas, so probably won't be back to Colorado for a visit until the summer of 2021.

Mike

@George H.

I own properties in Cleveland, Akron, Canton and Massillon. Moving forward, we will focus more on properties outside of Cleveland. We just find we are more comfortable in the smaller communities and less likely to end up with properties that will be extremely hard to manage. We have also built a good team that will cover Akron, Canton and Massillon and had a harder time building a similar team in Cleveland.

Obviously, Cleveland is a great market and has worked for many investors. I think it more about where you feel comfortable and which market you're able to build a good team in.

We have dealt with Section 8 or several years in Akron without a problem. We don't have experience with Section 8 in Cleveland.

Mike

@Besnik Kadriu

There is a lot you could do with $100,000. In many markets, you could purchase a property for cash and then you wouldn't need to get a bank loan. However, if you can qualify for a bank loan by yourself or with a partner, your money will go much farther. For a non-occupied rental property, the down-payment is usually around 20%. So that $100,000, could get you into five single-family properties for $100,000 each or a multi-family for $500,000.

I would keep learning from the podcasts and start networking so you can narrow down your investment strategy.

Mike

@Beary Bowles

Does the HOA prevent you from using the property as a rental or from having multiple tenants inside that are not related? If that is the case, you have a big battle ahead of you and it seems like one you might not win. If the HOA does not expressly prohibit renting the property or from having a bunch of people staying in the property, you just need to figure out a solution for the parking that doesn't annoy the HOA and the neighbors.

Mike