All Forum Posts by: Mike Cahill

I am a new investor. Interested in hearing what experienced investors consider when selecting a property to invest in. I am more interested in what you consider when you analyze the street and neighborhood where a residential property is located. I recently came across a property that appeared promising but then I noticed that the neighboring home is messy and has trash in the yard. Would this deter you? It is difficult because the property is located in the inner city so trash issues are not unheard of. Sometimes I think I take my personal preferences into consideration which I know is a No No for rentals.

Tim,

Thank you very much for the feedback. I guess I thought those individual capex items were covered by the 10% reserve but thanks for letting me know they are not. I’ll have to keep working through this and re-examine my expenses. Much appreciated. 

I am a beginner investor and have begun screening some properties just to practice the proper analysis. Right now for screening purposes for SFH rentals I am looking to buy a property for $150,000 or less. I use the rent estimate for Zillow and then deduct the following estimated expenses (20% to cover vacancy, repairs, property mgt and then I also deduct RE taxes and insurance of course). I am finding a decent number of properties in the Trenton/Hamilton, NJ area that are producing monthly cash flow of $300 for an annual cash flow of $3,600. on a 25% down payment totaling $38,000 (for a $150,000 home) this produces a return a little shy of 10%. Is there anything else I should be considering when screening a deal? Would appreciate any feedback you have.

Thanks for the info @Shere Hansell

Thank you Shere. That's a good point. There wouldn't be much equity to secure the hard money loan.

Thank you, that makes sense. I wonder if the bank holding the first mortgage would still want to see some skin in the game....

Is it possible to use a hard money lender for a down payment? Has anyone done that to obtain 100% financing or close to 100% financing?