All Forum Posts by: Stephen Leblanc

I've only been holding rental propeties for about 2 years now, so I consider myself a noob. But, I don't think of it as buying RE, I'm buying an income stream. If I can spend $3000 and buy a home that pays me $100 per month for as long as I own it, do I realy care what someone else thinks its worth. To take my example to another level, if I own a portfolio of properties that pays me $10,000 per month, does it make any real difference if they are worth 200k or 500k. I'm still retired with a great income (my dream only). The only time the value comes into play is if I sell them....but if I sell them I may have 500k in the bank, but I can't live forever on that. I will miss the income stream more. Back to the 9-5 job in that case. Maybe I'm way off, I'm just a noob.

steve

I would keep it as a place to live in to save money. As a rental property I would sell it. Using the 50% rule, it looks like you are going to have a negative cash flow of about $80.00 per month.

steve

Why don't you give that incentive to your current tenants? One free months rent for every name they give you that ends up renting your place and signs a 1 year + lease.

Steve

what are you getting for rent.

I think the rule of thumb is 70% of the after repair value - rehab cost. So in your example, if you fix it up you find other comps in the neighbourhood go for 250K in the same condition. Lets say to get it to this condition it will cost you 50K. You take the 250,000 X 70%=196000. 196,000- 50,000repair cost=$146000 the price you should offer for the house. I hope this is clear.

Steve

edit; I just re-read your question... I don't think there is a percent of purchase price you shouldn't go over when figuring out if it is a deal or not when it come to repairs.

60K....50% of your rent will go to bills. That leaves you 500 per month for mtg pmt and profit. I look for $100 per unit. That gives you 400 for your mtg pmt. 60K at 6.5% for 25 years is about 400 per month. This assumes you are talking about one unit building.

I aim to make $100 in total profit from every unit I purchase. So if I want my retirement income to be $3000 per month, I will need to have 30 units. To follow my example further.... if I want to retire in 10 years, I will have to buy 3 units per year for 10 years.

Hope this helps.

steve

What home owners do you market to. Are you looking a houses you would like to own or are you looking for run down houses. Or do you just blanket an area.

thanks

steve

I think the biggest hurdle you must overcome is the no Job. You are going to need a job to get any type of financing. You may want to look into a job that will help you with your RE interests. If you want to flip homes you may want to go get a construction job to pick up usefull skills. That sort of thing.

steve

could you pay cash for the property. Do you have any room on your credit cards or unused lines of credit. If could pay cash for it you coud get your money back out based on the appraised value, not what you paid for it.

steve