All Forum Posts by: Tim Herman

@Seth Hudson what are your numbers. Commercial properties are evaluated by cap rate. Gross rents- vacancy-expenses= net operating income divided by cap rate$100000-$5000vacancy=$95000-$50000(expenses)= $45000NOI. If the cap rate is 8%=$562500 purchase price. 

@Tuvia Goldstein if you want someone to answer you have have to tag them. Use the @ sign and start typing there name. To the left of comment box names will appear double click and it will highlite the name in blue and they will be notified that you commented or need more information. Back to credit score it all depends on the class of the property. Class d (war zone) you will be lucky to get 500 credit score. My minimum is 600.  You will also want to call the 2 previous landlords and check if they make their payments on time. Call their work and verify that they work there and how long they have been employed.

@Devon Cornwall No income for 4 months rehab. 8 months @ $1400. As per your inputs you have outgo of $1021 per month for 12 months. It shouldn't be that much during rehab your expenses wouldn't need capex,vacancy and repair budget. You must be using cash for your rehab budget, no interest payment on that. You will have to season the loan for 6 months after you first get tenants in before you can refi. Looks like it might be a better flip. Getting $1400 on a $16900 investment.

@Raquel Rigby This is not a rental. Long term expenses run 50% of monthly rental. Your total expenses are 33% not counting PI. @ 50% of rental income you will have $675 to cover a debt payment of $809 a month. A loss of $134 per month. Most newbie investors under estimate expenses. An example a new roof cost $7500. Your $81 CAPEX budget you will be able to replace the roof in 92 months providing your central heat and air or any other components fail. Good luck on finding a good cash flowing property.

@Tuvia Goldstein What are your minimum qualifications for a tenant. Credit score of ? Monthly income 3x rent? Pets or no pets? No evictions or evictions cleared more than 5 years? No criminal activity or only nonviolent ? The one rental I personally manage I prescreen the tenants and then schedule an open house and have everyone that is qualified come. It disrupts my current tenant the least to have an open house. I verify their names and their email address so I can send them to the Rentprep to fill out the background check. I plan to switch to Coziy.co so I can also collect rent electronically. Bigger pockets has state specific leases as part of the pro package or you can purchase them. Good luck in finding the perfect tenant.  Another good resource.  https://www.biggerpockets.com/blog/2013/01/27/tenant-screening/

@Nate Wilson Rental properties are to make money not lose money.1% rule purchase price= monthly rent/.01= maximum purchase price. $3700 monthly rent/.01= $370000. Put your money to work elsewhere. Run the numbers and pick properties that cash flow.

@Skyler Mckinney I don't think anyone will lend you money for a refinance without a W2 job. This will end up being a flip.

@Ernes Sahic you are using WAG numbers(wild *** guess). You haven't looked at the properties and you have a repair budget of only $5000. Your CAPEX and repairs budget is $1400 per year. How are you going to replace 2 roofs, 3 water heater, replace 3 carpets in the rentals or any other major components. I would want at least $100 more per month going to repairs and Capex. With the numbers given you will cash flow around $200 per month.

@Roberto Hernandez google Legal eviction process in Iowa. First step is a 3 day notice to pay. You should have done this the first time he was late. Post on his door and take pictures with your phone. Good luck

@Jesse Lugo Jr This cannot be BRRR with the numbers you supplied. You have to work backwards. ARV= $145000*.7=$101500. $101500- repairs$25000= $76500 less holding costs 3 months around $4000. You can offer for the property $72500. Your post reno numbers are too optimistic. Vacancy 8% repairs and capex total 15%