All Forum Posts by: William Hoppes

@Yannik C- V.

For someone looking to invest out of state, how would you recommend getting more detailed numbers? I'm (yet another) Californian looking out of state. I based this off kind of a generic A/B duplex I'm seeing in places like Cleveland, Indianapolis, Kansas City

@Ned Carey

Ok. So when people talk about the crazy cash flow they're seeing, are they just not taking vacancy/capex into account?

Am I doing costs right?
I'm running the numbers on some different properties and I just want to make sure I'm estimating my costs right. Does this seem accurate to you?

Mortgage: For multifamily the loan will be 75% of sale price and the interest rate will be ~6%

Property tax: sale price multiplied by the property tax rate I find online.

Repairs: 5% of rents.

CapEx is $3000/year. (Taken from Ben Lybovich)

Vacancy is 8% of rents annually.

Property management is 10% of rents.

Landlord insurance is ~$300.
Finally, since I'm OOS, I want to pay an inspector to check out the house twice a year, which should be about $600 altogether

So for an imaginary $100,000 duplex with $16,800 ($1,400/month) in rent, my annual balance sheet should be:

Mortgage of $5,400
Property Tax of $2,000 (assuming 2% rate)
Repairs of $840 (spent or saved)
CapEx of $3,000 (spent or saved)
Vacancy expenses of $1,344 (spent or saved)
Property Management of $1,680
Landlord Insurance of $300
Inspectors at $600
Total Expenses of $15,164
Rental Income of $16,800
Profit of $1,636

Does this look right?

Based on this, I wouldn't be making much money even though rents are 1.4% of value, which should be good. I feel like I'm overestimating costs somehow but I'm not sure where.

Hi, my name is William Hoppes and I'm looking to try small multifamily REI. I'm looking for passive income/higher returns; I like my Vanguard funds but I'm willing to take on some risk/work to get those returns from 10%->20%. I live in Sacramento CA and I've accepted that investing locally isn't really feasible so I'm looking out of state. I won't say it's impossible to do multifamily/passive-income in CA, I just doubt "I" can.

I've got no real estate experience, lifetime renter, so I've got a lot of learning to do and I'm looking for a market with enough cash flow/cheap enough that I can afford to make some mistakes. So far I've been looking at large-ish cities with the best price-to-rent ratios from Zillow research and then looking up forum posts to see what people are saying. So far the big three I'm looking at are Cleveland, Kansas City, and Albany NY. 

I would appreciate any advice, especially from people doing out of state investing. Thanks in advance!