All Forum Posts by: Zac Boelkow
Zac Boelkow has started 45 posts and replied 126 times.
Post: How are our returns calculated?

- Port Richey, FL
- Posts 129
- Votes 48
I am confused as to how to calculate my returns year after year. I understand that you divide your net profit for the year into the total amount invested. If I buy $100,000 rental, for cash, and net $5000 for the year that is a 5% return. Now if I put year ones net of $5000 in to the initial debt ($100,000) and net again another $5000 for the year does that mean I earned 5.3% for that year? ($5000/$95,000=0.0526)
The reason I ask this is because I am working a owner financing deal (10 years) and running an amortization schedule this is how it looks.
Property cost is $165,000. He wants a $50,000 down payment. 4.875% interest on a 30 year term with a ten year balloon. My COC return is 5.5%. Hypothetically, If everything goes the way it should, in ten years I would refi the balance of roughly $90,000. I would also put down 25% and assume the mortgage is the same rate. I would still have some of the $50,000 left in the property but the new, ten year later, calculation comes up to be approx 21%...
Or am I just doomed to the 5.5% year after year and I am trying to funny calculations to justify buying this property? I just want to buy a property and its difficult lately so I am doing everything I can to be able to buy in this market.
Thanks!
Post: How to find out what is important to a seller?

- Port Richey, FL
- Posts 129
- Votes 48
Thanks Patricia! Great feedback and suggestions I did not think of as of yet. Thanks again!!
Post: How to find out what is important to a seller?

- Port Richey, FL
- Posts 129
- Votes 48
I was casually in negotiations on a duplex. The seller is willing to owner finance. He and his agent and me and my agent have never done an owner finance. Which seems fairly simple enough. At the last minute the seller had his realtor tell us he didnt want to sell any longer. I had the feeling like there was more to the sell than money so I called the realtor and asked permission to contact him personally so he and I can discuss what is goals and wants are. So I have a meeting in a few hours to discuss how we can negotiate the terms so they are mutually beneficial for all parties involved, which includes two long term tenants who are paying below market rent values. I can pay him asking price but I would need to raise the rent 38% which will force the current tenants to move out. I feel like they can handle 15% rent increase and would be willing to stay and be able to afford that. Realistically rent should be raised a solid 23% to be current in my specific market/area.
Any suggestions, tips, or ideas is greatly appreciated. I know the seller doesnt need the money and is also concerned for his long term tenants well being. As I am interested in keeping long term established good paying tenants even if I leave a little meat on the bone...
Post: Raising Rents on a new purchase

- Port Richey, FL
- Posts 129
- Votes 48
Thank You, my thoughts as well. Through the process, I have already addressed the low monthly rents, to get a feel for the tenants interest in staying, hence the 100 dollar increase. So I am hoping its a smooth transition.
Post: Raising Rents on a new purchase

- Port Richey, FL
- Posts 129
- Votes 48
Hello I am buying a duplex that has below market rents. They are currently paying $650 each side. Both tenants have been in the duplex for multiple years and would like to stay. The tenants are on month to month verbal leases. I would want to keep the tenants as they are good paying tenants. I want to raise the rents $100 each side because I don't think they'll move for an extra $100.
My question is in the state of Florida do I have to give a rent increase warning/notice for a period of time prior to raising the rents? I am assuming that they are on month to month I can just write a formal letter that maybe gives 60 days notice to the rent increase?
Thanks
Post: owner financing on a duplex

- Port Richey, FL
- Posts 129
- Votes 48
Great advice! The seller and sellers agent are both uncanny. So I did exactly what you suggested to get the ball rolling. I offered 20% down with 3% interest on a 30 year term without a prepayment penalty. He has come back with 5.5% on a 10 year term... I think I will counter offer 3.5% on a 30 year term with a balloon of 5.5% after year 10. That should keep the monthly mortgage down...
Post: owner financing on a duplex

- Port Richey, FL
- Posts 129
- Votes 48
yes 20%
Post: owner financing on a duplex

- Port Richey, FL
- Posts 129
- Votes 48
So I have an offer in on a duplex. Owner is asking 175k I offered 150K. I require financing, which I am already pre-approved. Bank financing is 30% down and roughly around 4.5-5% on a 30 yr note. The duplex is rented, under market value at $650/month. I would raise rents $100 ea side in hopes that I would not lose the tenants as they are long term tenants. If I would lose the tenants then rents are more likely to be 850-900/month.
The sellers agent said the owner would take my 150k offer if he finances the property. I asked what his terms would be and it does not sound as if the sellers realtor or the owner have ever done an owner financing sale as of yet. My realtor told me to just come up with the terms that I liked and we'll submit the offer this way. We did already tell them that we wanted similar terms as we are getting from the bank. The only exception is we are only putting down 20% with owner financing.
Any suggestions/tips/advice will be helpful. I have never done an owner financing before either. It doesn't seem like its too complicated. Since the seller is asking me for the terms I feel like that puts the ball in my court. Thanks!
Post: Help with a short sale purchase for primary residence

- Port Richey, FL
- Posts 129
- Votes 48
@Andrew Webber I like that and your attitude. I also believe anything is possible.... thanks for the suggestion!!
Post: Help with a short sale purchase for primary residence

- Port Richey, FL
- Posts 129
- Votes 48
@Andrew Webber thanks for your insight. Great point regarding deals falling through and wasting time/money. That doesn’t make sense. Only reason I was thinking to do that is because it’s too much “cash” for me to come up with on my own. I can do down payment, remodel, etc... but not pay for the house at the same time. I’m just wondering “how” I can skin this cat.