All Forum Posts by: Monique Pett

@Monique Pett

The first report is using their numbers and having a mortgage on the property. I’m almost certain nothing is owed on the properties by them. They have had them for 20+years. I know the first report doesn’t make since to do. I just really am not sure if everyone uses their own numbers when evaluating a property, a mix of their and actual properties figures, or strictly what the properties are operating at right now. 

There is still a slight chance for a owner financing deal. They have not completely shut that down yet.

@Monique Pett Any additional details or articles worth me diving into? Sounds interesting!

@Monique Pett, at a $60k all in, is there equity in the deal, i.e. is it worth $75k once fixed up.  7-9k is not a lot of rehab, and will barely get some cosmetic items done in today's market.

As for CAPEX, you can either go conservative or aggressive on this. I, personally, take the conservative approach and budget for a roof today, over the remaining useful life. If it is new, that means I need to hold about $25/mo every month for the next 25 years. If it is 15 yrs old, I will have that expense likely hit in 10 years, and need to take my cost to replace divided by remaining useful life in months.

Same with HVAC, major kitchen remodels, water heaters, decks, fences, concrete work, etc. You also need to factor in your hold period.  If you will only hold 5 years, and the roof is new, you likely will have very little by ways of repairs or needed replacement.  If you plan on holding forever, you can very likely be spending large sums of money every 10-15 years for kitchen and bath remodels, all new flooring, etc.

Lastly, a 10% vacancy implies you will be down about 6 weeks after each 12 month lease.  That is probably conservative.  Specifically though, you have no utilities factored into your calculation.  Who will be paying water, gas, electric, landscaping, etc during those 6 weeks?  From experience, you cannot show a dark house, nor can your contractors turn a unit without power and water.  This doesn't change the deal dramatically, but is an actual cost you will have that is not budgeted.

Hi! Congrats on finding this deal, the numbers look great! A few thoughts:

1. You mentioned you're purchasing it with cash, do you plan to continue owning the property outright with no mortgage or do you plan to refinance to property to BRRRR?

2. Not a major expense, but will you be paying for garbage? If it's a single family the tenant may be able to cover that but if it's a duplex that may need to be covered by the landlord.

3. don't forget to factor in capex, as mentioned above already. Even after factoring this in you should still be able to cashflow $400+/month but your COCROI will drop a bit. 

4. I'm with you on the management fee as a self-manager, even though others may disagree. I'm self managing my duplex so I didnt for that into my analysis even though at some point as I grow I will hire a PM, but that won't be for ~5+ years. By that point, rents will have increased and I'll have that cushion to then add a PM and still be able to cashflow.

Hope this helps, and congrats again!