All Forum Posts by: Tchaka Owen

One thing that I had not given much thought to is the language on morning radio, until the 6-year old started asking questions recently. So I decided that as of last week, I would plug in the BP Podcast while driving him to school. The risk of @Brandon Turner or David Greene getting colorful is certainly of lower than of the morning DJs, plus he might learn something. Well, today in art class he made a radio (an actual cutout)…….if you look at the upper right corner, it says, “Podcast: Bigger Pockets”. Proof that he’s listening! Maybe he’ll buy his first investment property by 2nd grade?

@Corey Chonsky - a safe way to estimate is to go by 2% of the purchase price. The true percentage varies by city (final number is a combo of city, county and state) and it's generally 2.00% to 2.20%, however it's on the assessed value which tends to be a little under the purchase price. For example, I was in Broward County for many years and the assessed value is pegged at 85% of purchase price then moves from there. So in Hollywood (where I lived), the rate was around 2.2% which comes to a little under 2% of purchase, but that leaves a little buffer. I've used the 2% and it's never failed me.

Note: taxes are paid in arrears in FL, so when you pay, you're paying for the year that just finished. 

@Arthur P. - just be aware that "west Florida" is a good 5-7 hours away from the Orlando recommendations above. "West" is Panama City Beach and on....towards Alabama. 

@Craig Dieterich - based on the numbers you provided, the CoC is correct. If I were you, I'd tweak the numbers a bit. Ie,

1. Change closing costs to $5000.

2. Unless it's been recently renovated thoroughly, change Maintenance and CapEx to 8% each.

3. Count on at least $25/person for Water; thus change to $100 (better to go to $120).

After these changes your CoC will drop, however it will still be quite nice. Good luck!

@Jason Powell - what is the reason that the Section 8 tenants do not pay for electricity? Is that part of their current leases? Without knowing what's going on, I'm guessing that's a 'standard', but not rule. Options:

1. When the leases renew, you change them to having the tenants pay electricity. Fyi, if there's an affordability issue, they can always go back to Housing and request an increase. Also, just because someone is getting assistance doesn't mean they cannot afford the electricity. Some are merely getting a "helping hand" as opposed to full assistance.

2. Do not renew leases upon expiration. Clean up and rent to someone willing to pay electricity.

How does that affect your numbers now?

@Matthew Irish-Jones - I don't even want to know what prices are like today! I'd probably be a gazillionaire. 

@Kaja Baum - Fredericksburg is considered NoVa now?!!! My....things have changed.

Interestingly, when I first got interested in REI, I considered Buffalo: numbers were great. And homes were sold on eBay. Duplexes for $30k that needed $10k of work; lots of triplexes - all in was rarely over $50k. I ended up not moving forward on any because of concerns of age, pipes in winter, etc. This is before so much info was available online and finding contractors/property managers was much more difficult. Rarely do I see Buffalo come up in BP, perhaps that's a goldmine waiting for you!

While your point is understood, please note that this isn't white vs black. It's white vs minority. Too often people tag race issues as white/black, meanwhile we're a multi-cultural country and the latin population might be larger than black now. 

@Christy Brinkruff - your post is a tad confusing to me. Are you asking whether you should flip the Fountain Square property or the new deal? Assuming you're talking Fountain, my recommendation is that you sell it (flip) and move on. Why?

1. Having cash on hand is critical so even if you had a good contractor, you don't want to be in the middle of two renovations unless you have tons of reserves. Better to sell and go on to the next project.

2. I drove around the area about 7 weeks ago and yeah, Fountain is definitely hip. But so what? It's just that....hip, but if I was moving to Naptown, that wouldn't be on my radar of places to live. You're an investor, there will be other opportunities - and possibly even in the same area. Plus there are several hip areas, not just Fountain.

Flip it, be in even more solid standing, get your contractor situation sorted and you'll be ready for some holds. Good luck!

@James McGovern - what is your rationale behind #7?