All Forum Posts by: Mya Toohey

Welcome to BP! It is a great resource!

Does anyone know of any private lenders or banks willing to loan for rehabs in Louisville, KY?

Welcome to BP!

Hi Brandon,

Welcome to Bigger Pockets! It's a great resource for new investors and has helped me both as an investor and an agent!

Mya

If you could get the property for $200,000 with 25% down , 30 yr fixed and 5% rate with current rent at $1925 a month ,then the property actually isn't too bad. I plugged those numbers into the REI property analyzer, estimated expenses based on my knowledge of Louisville rental markets and it came up with the following: CAP rate 8%, cashflow/initial investment 15%, NOI $16,950, cash flow before taxes $7287, taxable net income $2177. So basically, if you want it to be a good deal then make the low offer. If the property has been on the market for awhile then you never know how motivated the seller may be to get rid of the property. It never hurts to ask! And if they say no, just keep looking for a better deal!

The 1% rule is to help you buy smart. You will find that many sellers and realtors will list properties at 10 times the yearly income. This makes the "asking price" equal to 120 months of rent vs. 100 months which is the number the 1% rule is based upon. That's a big 20% difference. But the "asking price' and the actual "selling price" are rarely the same. Don't be afraid to make a low offer. All they can do is say no or make a counter-offer. Remember the saying " If you aren't embarrassed by your offer, then you have offered too much". If you could get the property at 20% below asking price, would it meet the 1% rule and would that make it a great deal?

Welcome to BiggerPockets! It's a great site and resource for myself and my investor clients!

Mya

@Patrick Hockersmith Welcome to BP! If you need an investor friendly agent,please feel free to contact me in Louisville!

CAP rate is = annual net operating income/purchase price.

Rent collected - all operating expenses such as property tax, maintenance, utilities, insurance, property management, etc.

Divide that number by the purchase price and you get CAP rate. Do not include loan payments or any fees paid for loan because they are not operating expenses.

If your annual NOI is $12,600 and the purchase price was $27,000 then it would be $12,600/$27,000= 46.66%.

Hope this helps!

Thank you everyone for the warm welcome!