All Forum Posts by: Daria B.

@Chuck Mckay

Hi Chuck,

Did you ever get any responses to your question? I don't see any replies here but someone may have just sent you a message.

I have a townhouse in Maryland that is in need of a remodel (kitchen, flooring, baths) and other than Lowes and Home Depot I've not run across any other companies that I know would do this work. Lowes and HD require full payment and although I've used HD for my own  home to replace exterior doors, that was not a considerable cost so paying in full was not a problem. I'm estimating $15k for the work based on previous rentals.

I contacted the BBB and searched their site and found some companies but have not called them yet.

Thanks for any information you can pass along.

Thank you!!!

@Derek Woods

@Michael Pierri

@Andrew Syrios

I redid the numbers in the BP calculator and came closer to the numbers in your responses. Although, the Cap rate came out to be 11.87 and the COC was 29%. I didn't do the vacancy %, which is why the percentages are off but now I have a good 'rule of thumb' to go by. Thanks!!!!!

@Derek Woods , @Michael Pierri , @Andrew Syrios do you use any prescribed spreadsheet? I'm having a tug of war on deciding what will work in the long run. I'd like to have a solid one in place to input all my property numbers to continue analyzing my properties. I've found several and have my own and I did use BP but I'm not a Pro member.

This is the first time I've used the calculations to determine if the investment is worth further consideration. Honestly, the last 2 rental purchases I just used a 'gut' feeling. I did the research but I didn't use any formulas or spreadsheet to determine the purchases. It was purely, "it's in a good neighborhood", "it's not older than 1980", "school district according to the PM was good and well sought after", "the cost was within or less than the comps", "other homes as rentals were doing well", "the interior and exterior didn't need much work Class B", "and the sky was blue without a cloud in it" :) Ok the last one was just for grins. I did do some force appreciation on the 1st and will be raising the rent when the current tenants vacate or if they decide to stay. I'll need to discuss with the PM since they have better statistics on surroundings.

So, with this potential investment I may be over thinking the process. There is a great need for me to understand how these calculations figure into "making a good decision".

The said duplex was built in 2008 and has other rentals around it for $850. 

@Michael Pierri It's actually in Tallahassee and I live in Gainesville. I went to college there and have friends that live in the area. I looked in Gainesville first since UF and Santa Fe are here but I was not getting any hits on what I was looking for at $$. With 2 universities in Tallahassee and the community colleges, professionals, I'm thinking I will have a better chance at securing  property.

Tallahassee also has somewhat lower mileage rate and the home $$ are in the range that I think I can get a better deal for sq ft.

@Andrew Syrios@Andrew Syrios I listened to you and your brother on one of Brandon's podcasts. Very good show. I've listened to a few and will be on Brandon's webinar tonight. 

I'm meeting with a realtor that was recommended by my local realtor. Since there are no appliances I'm thinking the $114 will be negotiable, after all isn't everything. Hopefully, the property is what is appears to be.

Thanks again everyone for your input this was very helpful to me! 

Thanks @Kadian F. I will have a look.

Hi all,

Thanks in advance for reading my post.

I found a duplex built in 2008 that is 2348 sq ft total that I'd like to add to my buy-hold portfolio. It's a foreclosure so the bank now has it up for sale. I've only seen pictures but will be looking at it in person in a couple of days. There is a rental next door that is also the same style duplex (built by the same developer) going for $850 (1 unit in that duplex is already rented) and other sales in the area (SF) going for $89k.

It's a college town and from sites like zillow the rents look to be $850-$1.2. Trying to compare apples-2-apples so the rentals that were older homes I'm not looking to compare. Also, this is a new duplex closer to the university and other homes are further away.

After running these through some calculations this is what I came up with (does this look right?):

Purchase Price: $114 (their price, I've not determined what to offer maybe $105 for lack of appliances maybe other things I don't know about yet)

Taxes: $2323 (talked to the appraisers office to get the 2015 valuation)

Terms: 30yr 4.5-4.8% fixed conventional with 20% down

Insurance: $1000 (guessing from previous purchases, this may be too much but I can't see it being more)

Appliances: all missing from both units except 1 microwave and 1 stove. will need to purchase 2 refrigerators, 1 stove, 2 dishwashers and 1 microwave. Estimating about $3000-$5000. Priced from Lowes was $2500, but I'm padding.

PM fee: 10% of rent 

Unsure if 10% is on each unit. What is the norm for duplexes?

Vacancy: not sure what to put here

This is what I'm not sure of with my 1st year ratios:

Cap rate: 13.04% (I divided the purchase price by NOI) Now of course my NOI didn't factor in vacancy loss because I wasn't sure how to do that.

GRM: 5.51 (I divided the purchase price by the GSI)

Return on Equity(yr 1): 36%

COC: 70% (isn't this rather high?) (I divided the down payment by the NOI)

Debt Coverage Ratio: not sure how to calculate this. 

I created a spreadsheet based on reading up on the formulas and also found a few spreadsheets that did the same calculations. Putting in the same numbers, gets me varying degrees of values within a 2-5% margin. And of course if the beginning numbers aren't correct then the calculations that rely on a previous calculation or value isn't going to be accurate. Arrgh I need a good spreadsheet!!

What I found was that one of the spreadsheets deducted the PM fee from the expenses so the Total Operating Expenses differed from my calculations. I have always looked TOE as including the PM fees. ?!?

What numbers should I be looking for in the Cap Rate, GRM, and Debt Coverage ( I think this is what lenders look at, correct?)

What should I be looking at to see if this is too much to pay for this property?

Thanks again BPers! :)

@Donna Anderson Welcome Donna. I am also a FL investor and am currently looking for property in Tallahassee. I saw your post and just wanted to say hello.

? can someone help me.

@Jeff Valentino when I was pursuing my 2nd property here in town I had no agent and found one that's not an "investors" agent but was still capable of helping me get a foothold into the area. this new area I have no contacts and am trying to find some. There are a lot of agents out there. Just as you did the work so did my agent. She was patient with me as I had questions :) and in the end we were both fruitful. I basically found my 3rd and she was along for the ride. Don't get me wrong, she did do the paperwork and made the calls to get the contract signed and other follow up. I'm just looking for the same in a new area.

I don't think anyone can say "oh I'm going to buy tomorrow or next month". Properties have to be seen and research done to see just what the worth is going to be. I'm already investing a lot of my time so when I want to see a property it just seems that I should be able to do that to help further my decision. And I can only do that with an agent that has the keys. :) I'm not a realtor so o can't get the rental analysis numbers, or what rents are really going for and I'm not able to get other information on properties that would otherwise be pulled by the agent. My current PM pulls this kind of information for me now for the properties they manage when I discuss what rents will be for my properties. But again, this is not available for me getting into a new market area.

Thanks for your insight.

@Rob Beland I wasn't sure how to post so I'm trying again. Is there a specific forum that I can use for site help. Thank you

So are you saying that agents will only want to engage when the person buys the first thing out the gate? That doesn't seem lucrative for the agent or the buyer. And at this point I'm researching and looking at out-of-town investments.

I have a very good agent I work with in my home town but given the distance and market, she is not going to be able to help. I did ask her if she has any contacts as we've had this conversation before about my looking at investments outside of our area. In the beginning my agent helped me get my first investment here (2nd overall) and then a 3rd. She knows I'm good for the time invested and didn't think twice about helping me with the initial 2nd purchase..

With that said, I agree I am always up front and honest about my intensions. I don't want my time wasted and I don't waste other peoples time. It seems that I can only look at properties through the sellers agent and then when I want to buy I need to get my own agent, which will reap the benefit of doing nothing.

I looked for a forum but didn't see anything specific so I chose this one. Can you tell me which forum I need to be in?