All Forum Posts by: Robert Leonard

Welcome @Chet Hingle !  Listen to the podcasts!  They are like short courses on different strategies taught by experienced investors on their own strategies!  It's a great way to learn - IMO!

@Dennis Nemitz I'm going to ask a rhetorical question, so you only have to answer this for yourself, not me.  What is your personal net worth and would you bet that against $2000?  That's all that you are risking.

Wow! I guess I think a little like J Scott, because I typed this at the same time he was typing and his message appeared above my post!

Hey @DJ Savoy you and I need to connect too!  I had a vacancy in Jennings recently and I got a lot of calls from people moving to Lake Charles.  I know that market is heating up with the astronomical job growth expected there.  I definitely want to get in on that action!

Welcome to BP @Jeff V. !  I graduated from Kinder High ... a while back, so I'm familiar with your area ;-)

I'm a buy and hold investor out of the Lafayette and the surrounding markets.  Give me a shout anytime I might be able to help!  I always enjoy talking strategy with other investors.

I also wan to say, that's a great set of goals you've put together.  I think you are definitely on the right track.

@Kevin Patterson 

1) Both. Cap rates are always used for multifamily properties because they are valued based on an income approach. They are used on SFR for comparison to other investments, but not necessarily for valuation. SFR valuations are more influenced by comps for market valuation and a cap rate may never come up. But, at the same time, many advanced SFR investors will use the income approach for valuation of SFRs.

2) The answer to your second question is really specific to your strategy and market.  What I mean by that is, the highest cap rates are most often available in the toughest places to do business.   That gets into the strategy question of what you prefer?  After you read around a bit here on BP, you'll find some spirited "debate" for the full spectrum of strategies!

@Angelique Clarke and @Account Closed welcome to BP to the both of you!

I'm right up the road here in Lafayette.  I've been doing this for a little while, give me a shout anytime I might be able to help yall out!

Great question @Brandon G. ! This is the crux of SFR investing in any market. Until you understand how to accurately come up with what a property is worth, you won't know a good deal when you see one!

@Hattie Dizmond offered some great pointers that will serve you well.

The things that can throw you a curve ball are when a property has an addition that makes it more than 10% or more of a difference in living area than other properties in its immediate vicinity.  Or if someone is using comps from the other side of a major dividing line of property values like a major road, RR track, or adjacent subdivision.  That situation can make a house on the other side of a fence a bad comp as opposed to houses two or three streets away. 

Those are the "know your market" factors that you have to get right, to get the values right.

@Kyle R. I've read a lot of good advice here for you to ponder.  I'll ad a few points from my perspective. 

You don't know what poor is.  You already hit the lotto in life when you were born or arrived in the USA.  You have 12k in savings which gives you a positive net worth that puts you ahead of far too many Americans who have a negative net worth.  I measure my progress on a quarterly basis by the growth of my personal net worth.  Sadly, the average person over 50 has barely twice the amount you have saved for retirement!  Once again, you are way ahead.

You have the discipline it takes to be an investor.  Otherwise that 12k you have would be in the pockets of your "friends" at the electronics and audio equipment stores.  You are on the right track.  Look up a guy named Clark Howard.  He has a lot of information on his website for free that will tell you how to establish credit. I am not affiliated with him or his company in any way.

For every piece of what you are trying to put together, you can learn it by reading.  You don't have to build your library yet by buying a bunch of books. It's already been built and paid for by taxpayers - your public library.  There are books on every topic you can think of and you have what it takes - you can read.

Don't just hack your housing, hack your whole life.  If you don't want to go away and serve our country for years at a time, you can still serve as a reservist.  Every branch of the military has a reserve component.  You can get paid to learn a whole new career field that will give you the higher income you need to accelerate your earning and investing potential.

Keep learning and moving forward doing what you CAN DO!

LOL :-D ... @Sylvia B. "I believe bass eat tadpoles ... "  I'm sure that is the coolest statement I'll read on BP tonight!  Thanks!

I missed out on a property with a pool kind of like this last year.  Like so often here in my market, I was outbid.  The tadpoles were in their last stage of amphibious life (<-- probably not the correct scientific term?).  They had legs as long as their tails.  I'm sure if I would have taken one out of the water he would have jumped back in!

Hope this one clears up nicely before winter gets here and is the selling feature that seals your deal @Sam Leon !

@Amy C. this is where the 50% rule is helpful.  You can expect expenses to be about 50% of your gross rents.  PM and any utilities paid are also on top of that if you are paying for those.  Using that ball park of your expenses, you can estimate what a property will cashflow based on your financing terms?

Here's last year's IRS publication on rental income (there will be another one for 2014, that may or may not be the same):

http://www.irs.gov/pub/irs-pdf/p527.pdf