All Forum Posts by: Jason Schmidt
Jason Schmidt has started 64 posts and replied 152 times.
Post: I just learned about Return On Equity (ROE) - now a question

- Posts 155
- Votes 2
so can someone only truly reasonably expect that they can receive $25 a month positive cash flow in the instance below throughout the duration of the loan?
Post: I just learned about Return On Equity (ROE) - now a question

- Posts 155
- Votes 2
After reading "The Millionaire Real Estate Investor" the author was illustrating how the longer you have your property, the lower your % Return on Equity ((annual price appreciation + annual debt pay down + annual cash flow) / total equity in the property). He mentioned that many investors will maximize their money's earning power by pulling out the cash and re-investing. Very interesting concept! BUT - one thing I noticed: how on earth is the cash flow column increasing in his example so quickly? For example, on a 70k house, the cash flow was $300 annually. Within 5 years, it was nearly $1200 annually. Then it clicked: the loan stays the same, but your power to raise rents goes up! So, for example:
$700/mo rents to start out with (1% of prop)
$25/mo cash flow
but in 5 years, @ 5% increase a year, the rent is now $890
$890 - $700 = $190.
$190 + $25 = $215 a month cash flow instead of just $25 a month.
Please, please forgive me if I am not making sense, or if my numbers are off. But is this concept correct?
any input???
Post: do you automatically up the rents each year?

- Posts 155
- Votes 2
I have been reading a bit, and it sounds like some folks automatically raise their rents about 5% each year. Is that pretty typical? What do you all do?
Post: Freddie and Fannie stuff scaring me - what to do?

- Posts 155
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what does this government bail out mean to us? Should I put a hold on looking at property? Should I stop trying to pay down my house? Should I consider pulling out the 25k+ equity i have in it already? What do you all think???
Post: these deals don't really exist ... right?

- Posts 155
- Votes 2
oh! i thought a prop. management company would handle evictions, finding tentants, receiving money, etc. for you. Am I wrong?
Oh, and I am in Texas
Post: US eyes takeover of Freddie and Fannie - thoughts?

- Posts 155
- Votes 2
I just read that the US is considering a takeover of Freddie Mac and Fannie May - how does this affect us as real estate investors?
Here is the yahoo link to the story: http://biz.yahoo.com/nytimes/080711/1194793612725.html?.v=4
Post: these deals don't really exist ... right?

- Posts 155
- Votes 2
thanks for the info, Michael! A lot of this should be taken care of by the property management company though, right?
Post: these deals don't really exist ... right?

- Posts 155
- Votes 2
i want to buy and hold - to be a landlord. i am just nervous to take the plunge - mainly because i don't know where to look!
Post: these deals don't really exist ... right?

- Posts 155
- Votes 2
very good point - so how to weed them out? heck - i don't care about weeding yet - i havent found any. WHERE TO GO to find them???
Post: these deals don't really exist ... right?

- Posts 155
- Votes 2
Hmmm, has TimWieneke had a little too much to drienekey tonight? :beer:
sorry - just really confused by what you said :)