All Forum Posts by: Peter Sosnow

@Christopher Mooney

Doing it in CT for 5 years with now 19 properties and 90 units. Cash flow is definitely choppy. My results:

- uncontrollable expenses 20-25% of rental income- utilities, taxes, insurance.

- controllable 15% of income - primarily maintenance - landscaping, snow, plumbing, electric etc.,

- debt payments - 35% of income - P&I

The balance is capex, prop mgmt, miscellaneous and if any left my reserves/cash flow.

Pros - building equity, mucho tax benefits, appreciation, lifestyle

Cons - cash flow choppy, capex can be problematic with deferred maintenance and high costs.

Still think the benefits significantly outweigh the cons for the reasons others here posted.

@Anthony Freeman

13%. However in my forecast I break it down to the details, which may help me reduce costs by negotiating with suppliers or adjusting maintenance strategies. My R&M budget has about 15 line items including:

- plumbing

- electrician

- carpentry/general R&M

- gutters - clean and repair

- hvac service

- supplies

- landscaping

- exterminator/ pests

- unit turn costs

- vent and laundry duct cleaning

- appliance repairs

@Dmitriy Fomichenko

Yes. Trying to get more details how unincorporated business tax may impact returns. Also, when eventually taking distributions how might the solo 401k vs. self directed compare when eventually taxed. My accountant has been helpful sharing some insights, just interested to see other investors experiences.

@Dmitriy Fomichenko

Thanks. I plan to connect with a non-recourse lender to better understand if an equity partner is permitted and other related

Essentially trying to estimate the best retirement option for saving taxes with real estate investing.

Pros and Cons for purchasing properties in a JV or solo. Trying to understand my best options especially when incorporating a non-recourse mortgage. TIA for responding.

@Brock Lanoza. Better understanding of mortgages/debt

@Mario Morales depends on how you want to operate your investment. Some investors lever up and dismiss CF and others are more conservative. My operating goals:

- 25% non-controllable costs - taxes, utilities, prop insurance

- 15% controllable - maintenance

- 5% capex

- 35% - P&I payments

20% - cash flow.

Please note, I am only in my 1st year of trying to achieve these percentages. I spent most of my previous 4 yrs intentionally and non intentionally reinvesting most CF on capex to improve my properties.

@James Nix

My policy when tenant wants to break a lease: 1 month notice to move out and 60 days of rent to provide me 2 months to re-rent. In this case, I would keep the money. There is an opportunity cost by returning the money.

@Jeff Nash. What determines a good fit?

If cash flow is your primary issue, put more equity down with less debt. Do that until you feel comfortable. Keep at least 6 months of reserves for maintenance and/or capex, maybe 9-12). If capex becomes too much, should be able to sell the property. Returns are more muted, but you sleep better at night.