All Forum Posts by: Dorothy Butala

What area's specifically in Philly?

@Tamara Spiller Can you post a screenshot of your inputs? Also, you need to know what your metrics are for evaluating a deal and what you want to see in a deal. For example, I generally don't care about anything but actual cash flow, so the other numbers like ROI and IRR don't weigh very heavily on my decisions. I like that your deal is at least making $100 per door ($100 per door is my minimum amount of cash flow that I like to see in my deals). Each investor will look at each metric differently and give different weights to those metrics based on their personal financial goals and what they want to see out of the properties they are investing in. Hope this helps.

Hi @Paras Gupta, to my knowledge there are no certifications that make you a real estate investor.  What makes you an investor is investing actively in real estate.  Getting your license could be a nice "feather in your cap" that can compliment your activities of being an investor, but being a realtor will not make you an investor.  You may also be able to take classes that focus on multi-family investing, house flipping and commercial real estate to help you gain base knowledge and give you the confidence to pull the trigger on starting your investing.  Good luck!

@Shaun D. Sorry for the delay in response. I ran the numbers the best I could with the information you gave me. My assumptions include the following: 8% vacancy (equals 1 month of vacancy), 10% for property management (didn't know if you were self managing or not, but it's always good to put in just in case you decide you do want to get it managed), CapEx and Maintenance of $1500 per year, insurance of 1200, taxes at 3500, I assumed you would be paying no utilities, that those would fall on the tenant and that you would be borrowing the 15K for the cosmetic updates, so I added that to the base mortgage amount. I also don't know what metrics you are looking at when you are purchasing a deal, but I look at straight cash flow - properties need to be able to cash flow a minimum of $100 per door for me to consider the property. Here is what my calculator showed:

Looks like with the assumptions this property will not cash flow at the current purchase price.  Hope this helps.

A great way to start in real estate is to buy a duplex, live in one of the units and rent out the other.  You don't need to go to college to get into real estate.  If I were you, I'd save my college tuition and put it towards purchasing assets (that is unless you wanted to do something other than real estate with your college degree).  

If you can't see what repairs are needed, assume they are needed i.e. no picture of the furnace?  Assume it needs a furnace...add up the potential and needed repairs, plus financing to include hold time and make your offer.  You could also put some type of contingency in the offer that will allow you to back out, but may times great properties are scooped up by investors that buy cash and as-is, so that could knock you out of the running.  Hope this helps. 

What would your total monthly mortgage payment be?  How much would you be putting down?  

Do you mean take out a loan for something other than the purchase of a property?  If so, what would you consider using loan proceeds for?

Keep it liquid in a savings account.  When you are planning a purchase in the short-term you don't want to jeopardize losing cash that you will use to fund your purchase. 

Hey Bryan, you could buy you next property in the next month if you want to, but I am assuming you are asking about the 2 year period due to banks wanting to see 2 years of filed Schedule E's to use the rental property income in the calculation for what loan they will give you.  Definitely file your Schedule E's when you do your taxes, that way you can provide them to the bank and hopefully get more borrowing power since they will use a percentage of that income towards your other income to determine your loan amount.  Keep expenses low, and the rents high.  Some items on your Schedule E will be added back, like mortgage interest, to determine the rental income...you will want to ask some banks what numbers they add back, and that can help you project what amount of income you will have from your rentals for consideration of the loan. Also ask the bank what percentage of rental income they use when calculating what they will lend to you.  If you have the ability to make any changes to your current property that will increase the value, you may want to consider those as well.  Doing so may give you an equity position in your current property that you can use to roll over into the purchase of another property.  Hope this helps!