All Forum Posts by: Shayan S.

From what I've read, you should stay away from complex math. You might be falling into analysis paralysis, which happens to many people. The calculators on bigger pockets are very straightforward and useful tools that can help you determine if you're buying right or not. If you need to use a complex calculator to make the calculation, you shouldn't buy it. Just my two cents. Good Luck!

Hey Stephanie, 

From what I've read newbies shouldn't really buy a foreclosure as their first property unless they really know what they're doing or can partner with someone who has experience. Have you considered house hacking? Perhaps you could look into the idea of selling your home and purchasing a duplex, triplex, or 4plex that has some cosmetic issues at a discount. You could then fix it up a bit, live in one unit, and rent out the rest. Also if you have significant equity in the property, you could cash out refinance and purchase the next property. Good Luck!

Hey Georges first off I'd like to congratulate you on getting started! From what I've read, if you have significant equity in your quad you can cash out refinance and use that money as your downpayment on the next property. You should look into this! 

From what I've read there are financing options for people with good credit but bad debt to income. You can do a Full equity partnership where someone puts up all the money and you take care of all the day-to-day work for a percentage of the equity. You can do a lease option to lease a property and rent it out and keep the difference. You can wholesale deals to make some money. Good Luck!

Your numbers look pretty good. I'm a little confused as to why there is nothing for closing costs, but besides that it looks like a solid deal and the expenses you estimated seem to look realistic and even conservative. Great job finding this! Now it's time to pull the trigger to start (or expand) your empire. Good luck!

You're losing money on this deal every month so it isn't a good buy. From what I've read two very simple rules for your investment decisions should be that 1) it has to cash flow and 2) it needs to be value add so that you can force appreciation. You should keep looking at properties and running numbers until you find something that makes sense. Good Luck!!

Hey Douglas,

It seems that you did not list a capex? Capex is the money you put aside each month for future big purchases such as a roof or new appliances. The age and condition of the home usually determines how much money you want to put aside for capex each month. Let's use 10% as an example because it's what a lot of investors on BP have used. So if you put aside 10% of the rent that's 145 a month. This'll bring your cashflow to 257 per month. Which is a 9.6% CoC return, which is not a bad return. However I wouldn't be comfortable with 257 per month, what if something major happens?

Shayan Soltanian 

From what I've read, I believe that you can use the BRRRR method to obtain a mortgage 70-80% LTV and use that to pay off your seller, then use the rest to repeat this process. Just run the numbers to see what your cash-flow will be after cash out refinancing.

Hey Rex,

From what I've read these are the pro's of a cash out refinance: You can invest with money that has low interest rate, the interest you pay is tax deductible, the biggest advantage however is all the cash you will receive and can use for your next investment property. 

Some cons: you're going to usually be increasing usually increasing your mortgage amount, or extending your mortgage terms, which can be risky. Also before you cash out refinance run the numbers and see if your rental property will still have a positive cash flow, and if you'd be okay with that amount. Good luck!

Shayan Soltanian 

I agree with @Caleb Heimsoth. With a negative cashflow you're losing money each month. I mean what are you going to do if you need a new water heater or roof? Now you're out a lot more than 178.14 per month. Change the area where you want to invest or hunt harder for deals. Deals can be found in every market.