All Forum Posts by: Travis Hole

@Todd Rasmussen I see what you're saying it now. Calculating it that way would get me to roughly break even, but any vacancy or repair would put me in the negative. It's not necessarily a risk that makes me feel uncomfortable, but I think my partner would have a hard time just handing me the money rather than paying down the note directly.

@Todd Rasmussen No problem. Yes, the cash profit of $345 mentioned above includes the mortgage payment deducted.

I bought a property in February 2019 as a 50/50 partner with another investor. The other investor is older, and pushed for a 15 year loan due to their age, so I reluctantly agreed even though I would have preferred a 30. Fast forward 9 months and the other investor wants to pay off their half of the property and just collect a check each month. As the numbers were, my 50% net cash profit each month has been about $125 on the 15 year loan. Once my partner pays off their portion, my two options appear to be staying the course and paying off the property more quickly due to my partner knocking out a big chunk or principal or doing a re-fi for my portion of the loan to a 30 year loan and increase my cash flow.

Interest rates have also dropped a lot since we bought back in February, the current rates I've been quoted on a 30 are about .1% higher than what we currently have on our 15. If I was to refi to a 30 for my portion, my cash flow increase from the $125 I mentioned above to about $345.

@Anthony Asciutto Thanks for the response. It's a duplex. I have a good friend who manages properties near there, so he had said he could recommend some people to me if I wanted to go the self managing route, however I think I'm pretty settled on just eating the $140 or so a month cost.

@Justin Kane @Sam B. @James Wise Thanks for the responses! I think you're all right, trying to self-manage my first OOS property sounds like a disaster waiting to happen and probably not a great use of my time.

Hey everyone,

Working through the purchase of my first out of state rental, and I was looking for advice and pros/cons of self managing vs hiring a property manager. Can anyone with experience in managing property out of their area comment on the difficulties involved?

Thanks in advance for any responses.

Here's the details of the potential deal (my 1st as an investor):

-Duplex in Glendale AZ

-Offer Price: $139,900

-Closing: $5,100

-Estimated repairs per contractor: $15,000 (replace lead based paint, other cosmetic repairs)

-Current rent paid by 5+ year long term renters: $1,400

-Rent estimated after repairs: $1,500-$1,600

-Other Assumptions: 25% down, 30 year financing at 4.65%, monthly repairs of $100, 5% vacancy, 8% management, property taxes of $77.17 a month, utilities of $130 a month

Per the calculator, using the $1,500 a month rental estimate after repairs I'm looking at $385.75 of monthly cash flow, a 6.51% pro forma cap, 8.4% cash on cash ROI, and a 7.95% purchase cap rate.

Looking for thoughts on the deal altogether, and also whether it's a good idea to do repairs immediately since there are long-term tenants living there, or hold off on repairs until they move out.

Noticed there are no closing costs included, did you include those on the purchase price you used?