All Forum Posts by: Nicholas L.

Hi @Nabil Elmorsy the answer is... it depends.  $100 cash flow per door is another one of those rules of thumb that can help you screen properties, but doesn't necessarily guarantee a good deal. For example, if you're living in a duplex, you're probably self-managing, and therefore don't need to budget for property management. But what if you move out in 3 years and need to put it under property management? That's 8-12% of the monthly rent - so if that takes you cash flow negative, then maybe this duplex wasn't a good deal at $100 net per door. Every deal has to work on its own merits. Maybe the property will appreciate, maybe it won't. Maybe you'll buy with cash and then refinance, maybe you'll buy with an FHA loan. The numbers have to work for your specific situation and also be a little bit "future proof." If a major repair or a lifestyle change would totally sink a deal, then don't buy it in the first place.

@Joyce Jackson I'm not an accountant, but I think he would need the details to file taxes - mortgage, taxes, repairs, business expenses, depreciation, etc. - these are ALL allowable expenses.  And, if you properly calculate all expenses, including depreciation, your properties may generate a tax loss, which can even help offset your W2 income - I believe this deduction is up to $100K in income, and then phased out between $100 and $150K.  So... doesn't sound right...

Hi @Joyce Jackson doesn't sound right - but need more information.  Over what period of time are you talking?  If you're filing for tax year 2019, you need the numbers for 2019.  Are these monthly rentals, STRs?  How long have you owned them?  How long has your "guy" been doing your taxes?

Hi @Jose Pad I'm not sure I fully understand your question.  You should deduct all expenses in order to file your taxes accurately.  Are you only working with a single lender?  How long have you had qualifying income on the duplex (2 months, 2 years)?  Can you see if a different lender will calculate your rental income a different way?  Some HMLs have long term rental loan products - slightly higher interest rates but more landlord friendly.

Hi @Ehab Shoukry congratulations! "...your strategy HAS to allow you to get your money back" - GREAT advice. I was buying conventionally before discovering BP, and am ready to switch. Did you start with your own cash, or 1/2 your cash + 1/2 your friend's cash, to get up to your initial 20 doors? How soon did you switch to Strategies 1 and 2? Any issues with your very first HML?

Thanks again for the inspiration.

Hi @Nick Longstreet welcome.  Even "no money down" investing does not mean that you have no money, it just means (as you stated) using someone else's money (which doesn't have to be a private lender - it could be a bank, hard money, etc.) to complete a transaction.  I strongly believe that before you invest, you should have savings.  You'll need cash to close on any transaction, reserves to cover repairs and capex, cash to cover vacancy, etc.  This is the case no matter how you're doing a deal and with whose money.

Are you eligible for any first-time home buyer programs?  You could house hack, or if that's not a good fit for you and your family, you could purchase a property that will be a good rental someday, live in it while you save, then "graduate" to your next primary and turn that into a rental.

Hi @Naj Brock a pre-approval letter will generally make you more credible as you're making offers, regardless of the price.  Are you working with a real estate agent?  What do they think?

Hi @Paul Henning wow, tough issue if this is both a friend and a colleague.  I would (1) check your local laws to see what they say about giving notice for month to month leases in your area, and (2) do NOT offer the rent increase alternative if that's not what you want.

Hi @DeeDee D. wow, congratulations!  Can you tell us a little more about the numbers - was this all your own cash?  Is it still a single family even with the expansion?  What are the rents like?

Hi @Jonathan Davis wow weird layout, weird dangerous staircase! but looks like a lot of space. Can you really juice the ARV to $200K with just an $8K rehab? Is the $200K based on actual comps you got from a realtor, or just what you'd hope to get? Is the $1300 based on actual comps? I see you're financing the initial purchase which will also mean you'll spend more cash out of pocket to buy and hold.