All Forum Posts by: Rodney Kuhl

@Rusty Scott 

These projections are for $700/mo rent. The property is currently vacant, but I think it should bring $700-750/mo. I like to run my numbers conservatively, so I used $700/mo. If I can get $750/mo, that's just bonus.

I looked into the HELOC option before, but maybe I wasn't talking to the right lender, as the payments were going to kill any cash flow.

@Justin Owens Thanks for the response! I agreed $140/mo in cash flow is low, and I would never buy a deal going into it expecting that as my cash flow. However, if I can pull my down payment back out and can use it to buy another, I can go from $200/mo in cash flow using that $12k to $340/mo in cash flow using that same $12k. And if I can find another property similar to this one, I could do the same thing again. I think it's a way for me to grow my portfolio a lot faster.

And I have already accounted for property management, as well as taxes, insurance, vacancy, and maintenance.

@Justin Joseph I am not a lawyer, but there is an Indianapolis lawyer who posts on here frequently, @Jynell Berkshire . Maybe she can help you out. Good luck!

@Kyle H. I've been told 6 months at purchase price, 12 months at ARV. Just trying to get ahead of the game, though I'll keep looking for someone who can do better.

@Kyle H. No,I had to put 20% down ($7,800) plus closing costs and holding costs (there isn't a tenant in place yet, still working on that) it will come to about $12k total all in (estimating holding costs at this point). The mortgage payment itself is $160. The new mortgage payment would be $216 (at $60k). I would pull out the $9800 of my initial $12k, leaving about $2200 left in the deal.

.....And as I am typing this I realized you are onto something. In my re-fi projections I only had 240 months as the terms, which significantly increases the mortgage payment and decreases the cash flow. If I use 360 months, my cash flow is still about $140/mo. Thanks for typing out the numbers!! I didn't think that small of a cash flow number seemed right, but I couldn't figure out why. At $140/mo cash flow (or $120/mo if it appraises at $65k), I think it's a no brainer to take the cash back out.

@John Matthews @Coire Fox Thanks for the responses! I get that under $100/mo in cash flow from a property isn't great, but the way I'm seeing it is that I'm using the same money to acquire another property, so essentially I'd be going from $200/mo in cash flow to $280/mo in cash flow definitely increases my returns on that money.

Coire, I have accounted for 10% vacancy, 10% maintenance, and 10% for PM, as well as taxes and insurance, and my mortgage payment. I think you have a good point regarding the $9800 being 49 months worth of rental income. I definitely think I can get better returns having that cash in my pocket now. Thanks!

@Dalton Conwell Welcome to BP. Any area in particular you are looking to acquire those rentals? If you are looking in Indianapolis and I can be of help, let me know.

I recently purchased a SFR in the Emerson Heights area of Indianapolis for $39k. I know that a house just a couple of streets over is under contract to be sold by another investor for $65k, and the appraisal came back at $65k. My house is very smiliar, both 3 bedrooms/2 bathrooms and around 2000 sq ft. My current projections have about $200/mo in cash flow, but because of the great deal I got on this house I have a good amount of equity. If my house were to appraise at even $60k, I could do a cash out re-fi and pull about $9,800 grand back out. My cash flow would decrease to about $90/mo, but I'd only have $2,500 in the deal and my cash on cash returns would project at 43%. If it appraises at $65k, I could actually pull about $1,000 more than I originally put down to buy the property, but my cash flow would drop to about $65/mo. But at the same time, I'd have nothing in the investment, the returns would be infinite, and it would free my money back up to buy another property.

In this scenario, what would you do?

@Evan Manship Congrats man! Sounds awesome. I too would be curious to know more specifics of the property - location, rehab, expected rent, etc?

@Brandon Pearsons There aren't really "good" and "bad" zip codes in Indianapolis for investors. The market varies too much, sometimes even from one street to the next. If you were to pick a zip code, you'd likely find both good and bad areas to invest in.