All Forum Posts by: Nathan Hui

Please state your market and class. Also, how you calculate CF.

@CJ M. Ok, you win.

@Mike Roy So $150/door and roughly 10% Cash on Cash ROI. I like to hear that you are not finding anything on the market that will produce these numbers for you. I'm not either! I am finding most investors are selling at or below the 1% rule with a nice heap of deferred maintenance. I don't blame them but my numbers just can't get there.

So it sounds like you are doing some renovations which forces appreciation and raises your rental income. How are you modifying your expenses? And what kinds of properties do you generally acquire?

@Tim Simmons That is helpful. It seems risk and Cash Flow need to be proportional.

Hello BP Folks,

What is your cutoff for cash flow per door? This is more of a poll. No need for explanation or rationalization but feel free to elaborate if you like.

Glad to hear it! I honestly haven't. House hacking has always been my strategy due to limited capital. The plan has always been to FHA the first one. But a few duplexes I have been looking at could be purchased as an investment property. My wife and I are renting while she is in school so if we purchase a pure investment property I am still paying down somebody's mortgage and not my own...

@Ali Boone Thanks for that read. All very important things to consider. It’s a foolish idea to think a tenant covering your Morgage is the only component to a good house hack. I run my numbers for the deals as if the property was totally tenant occupied. I am looking for cash flowing properties that have minimized risk. Unfortunately I have not found any excellent deals yet. Often times I see well maintained multifamily properties being listed for prices well beyond what I can cash flow with after the morgage and even “loose” estimations on cap ex, maintenance, vacancies... On the other hand I will see good numbers on paper on some properties but then come to realize there is thousands of dollars of deferred maintenance that likely will become issues within the first few years. All that to say I am trying to be careful not to buy the 80% ;)

@Mike Dymski It's helpful to be reminded the cash flow, equity gains, and appreciation are all factors in the investment. To exclude any of these benefits on the potential property would be failing to properly analyze the deal. I see why IRR is important. And I also see why cash flow alone doesn't tell the whole picture. To cash flow well in a depreciating or poorly appreciating area with many cap ex expenses may be a worse investment than a minimally cash flowing investment.

In the example, many assumptions are made about the net gains. I am guessing that is something you get good at? Seems like in order to calculate IRR you make a lot of assumptions.

Looks like the net profit is 5600/yr over 5yrs. So that makes 22.4% annually on the 25000 invested. Am I missing something here?

@Brian Sparr It is a beast! I am still struggling. Now I have to figure out EM too. Seems like if IRR can produce wildly different returns it isn't a good tool...

@Chris Seveney

Can you explain IRR. I don't understand it.