All Forum Posts by: Thomas Richardson

@Danny Randazzo would like to be in it for the long game, hoping to be able to grow so I can support my self from the cash flow but don’t need hundreds of properties.

I keep going back and forth on pros and cons for each but I’m looking for everyone else’s advice as well as I tend to over complicate some things.

Should I keep saving and invest in a B class neighborhood? Local market is very close to the 1% rule. Most deals I see cash flow $200-300/month and usually duplexes.

Should I invest in C class neighborhoods? Can get in a lot easier/cheaper cash flow ranges a lot more but would generally cash flow about $500-1000/month and are triplexes or quads.

Looking for other people experiences and suggestions. My main thoughts are that B class is going to be better/long term tenants that won’t cause too much of a headache, where C class may lead to more evictions and high cost of turnover. But, C class would have higher cash flow and be easier for me to get into the market, money wise. Should I just hire a PM and go for C class and keep lofty criteria?

Thank you all!

@Max Briggs I didn’t end up getting it. Someone came in at the last minute and offered more. I drive by it often and there doesn’t seem to be much progress moving with it so I’m assuming it wasn’t an investor. Probably someone slowly fixing it up for a personal house. I did hear that there were a lot more issues than I was assuming (bad well, big issues with septic, rotting joists) so may have just dodged a bullet.

@James Wise two close comps are saying around 90 but both are outdated with less land. The realtor felt confident with $120k if it was an updated property

@Todd Powell thanks for the help! I’m gonna jump on it. I didn’t want to get stuck analyzing this one but wanted to make sure I wasn’t missing anything as well. Thank you for the extra eyes on this!

@Jason D. My long term strategy is buy and hold as well which is why I didn’t want to make it a flip but it seems like if it didn’t rent out I could always sell and get more than my money out. Thank you for the help! I just got my first rental earlier this year and didn’t want to get stuck in analysis paralysis on this since it seemed like such a good deal.

@Jason D. Yes I was going to try to do it all financed with the line of credit but the expenses do seem to eat away quickly... maybe it would be better just as a fix and flip?

@Todd Powell it’s a small town in western Massachusetts, there aren’t many rentals in the area but it’s desireable so I am guessing at $1000 since it is a smaller 2 bed 1 bath at 1000sq ft I’m guessing with some comps that this is with around $120k after the rehab. Maybe pulling out the money after is the best idea

Can someone please help me evaluate this deal? its meeting the 1% rule easily and it seems like it should be a good deal but the way I am running the numbers it doesn't seem to make sense but not sure if I am running it right. I would like to be able to rent it out after, it is a bank owned property that will not qualify for financing but I have access to an equity line of credit at 6.5% Heres the deal

Sale price 40K

Taxes $2500/year

Insurance $1000/year

I like to set aside conservative numbers of 10% management fees, 10% vacancy, 10% cap ex

I am estimating about 2000 in closing costs and a 15000 reno budget.

It should rent for a minimum of $1000/month

Should I be analyzing this as a cash deal and the interest on the loan an additional operating expense or as a 100% financed deal? I would like to have it paid off in 10 years and maybe that is too aggressive for this deal?

Let me know if I am not factoring anything in or forgetting another option

Thank you!

I have only bought two properties without but both were foreclosure and I knew were going to need a lot of work and anything I found the bank wouldn’t really care about anyways. If you have an eye for this type of stuff you should be able to pick up the basics on what work you will need. If not you may want to get it inspected just so you know what your getting yourself into.