All Forum Posts by: Robert Fuhs

Kevin Hobbs I need some clarification. Are you saying 100x rent is too low unless it's in an area like you described? I wouldn't say this one is in a hot area though I do not think I will have any trouble getting renters. Susan Gillespie Thanks for the help! Yes it is turnkey and rented. And I would think your 1% appreciation is fair for this market. Honestly I'm not sure I could find a better deal in this market.

Kevin Hobbs I need some clarification. Are you saying 100x rent is too low unless it's in an area like you described? I wouldn't say this one is in a hot area though I do not think I will have any trouble getting renters.

This would be my first deal. It came on the market 2 days ago. It's in a suburb of Minneapolis. The pictures on line look good to me. Good condition, decent neighborhood.

Here are the details:

-Duplex. 2bed/1.5 bath each side. Couple possibly be made into a 3 bedroom.

-Current rent is $1200 per side. $2400/mo; $26,800 per year.

-Asking $250,000. I'd offer no more than $240,000

-Expenses:

taxes: 292

ins: 150

Repairs: 120

CapEx: 120

Snow/Lawn: 150

Vacancy: 100

Mgmt: 240

Total: $1172, $14,064

I'd put 20% down and finance the rest ($192000). PI=$1031

NOI= 1228/mo; 14,736/ yr

Cash Flow: 197/mo; $2364/yr

ROI= 4.9%

Cap rate= 6.14

This is a buy and hold for me to save for retirement in 20 years.

Is this a decent deal? If so, I'd like to move fast on this one.

Thanks again for the helpful info. A business partner and a potential property manager went to look at the place today and I got a good report. It could even be turned into a 3 bedroom pretty easily they tell me.

My question is, is there a way to figure out at what point it would make sense? Ie, what price do I need to get this for in order for it to cash flow properly? Is there a simple way to figure that out?

@Brandon Turner Thanks for all that helpful info! What a great tool. Yes, it doesn't look like this would be a good deal at $250K. I wouldn't expect big appreciation either.

I'm slowly discovering that finding good deals might be hard to do. Not that I thought it wouldn't take work, but it seems that you need to find things that are sort of bargain priced.

@Travis Christl I am looking out of state because I live in the OC and can't afford property here. I used to live in the TC and am pretty familiar with the area and do get back there once in a while.

Thanks for the quick replies! And for the advice. Very helpful so far.

I am looking at purchasing my first property as a buy and hold. My realtor has a duplex in a suburb of Minneapolis that he's going to list at $259,900. It's not on the market yet as he's given me first dibs.

Here are the details:

-Asking $259,900, but I'd like to get it for 250K

-Currently has one side occupied by a renter. Rent is $1150 per month. Other side is vacant now. I think I could get $1150 for both sides for a total monthly rent of $2300.

-I'd put 25% down and finance 187,500. Not sure the percentage, maybe 5%? At 5%, P/I=$1007/ mo

-Other expenses:

Taxes=$340/ mo

Insurance=$150/mo (estimate)

Vacancy=$192/mo (8%)

Management= $230/mo (10%). I live out of state so this is necessary.

Upkeep and repairs=$100/mo. This is an estimate. Maybe too low? I'd probably have the tenants take care of snow, but hire out the lawn care. Units seem to be in good shape.

Cash low=$281/ mo; $3372/year.

ROI= 5.3%

CAP Rate= 6.1%

I know it's not great, but for my first one, it looks promising to me. So, what does the crowd say?

Hi!

I'm a new member, as of about 5 months ago, from Orange County, CA. I work for a religious non-profit and am just starting out in real estate investing.

My wife and I are about 20 years from retirement and we'd like to have a portfolio of rental properties to augment our income in our later years. Right now I am specifically looking for condos, townhomes and SFH's in the Minneapolis area. Why there? Well, we used to live there so we know the area quite well and we can actually afford things there.

A friend of mine who's a few steps ahead of me in REI told me about BP and I've learned so much from blogs, forum posts and podcasts. Keep them coming!