All Forum Posts by: Account Closed

 Never mind, I got it. So what should I use for repairs? 

 What do you mean by canned percentage? 

 Not a year, lender said no specific time frame. But yes, I am going to occupy for a year. 

 Please look at post on top of yours. I listed the numbers and where they came from and also took a screenshot of the calculator. 

Let me know what you think. 

It’s going to be a buy and hold.

 Ok, I think the numbers are all getting jumbled up. Here is screenshot of the rental calculator that is on here (I forgot to add $116 per month for landlord insurance).

The vacancy rate, capex, repairs, and management rates are from the property management I will be using. 

Purchase price of home: $110k

Down payment: 0%

Inflated Renovation estimate: $70k 

Actual renovation estimate: $55-60k (estimate from GC. Not a bid proposal)

Interest: 5.2%

Estimated rent: $1750-$1850 (based on property management company)

The renovation will include new A/C, electrical rewiring, upgrade plumbing, flooring, replacing countertops, bathroom renovation, new garage door/opener, recessed lighting, paint, new appliances and a wall tear down to open up kitchen. The water heater is fairly new and roof had been repaired recently.

I had put an offer in today, but it still hasn't gotten accepted. Should I pull it? Please let me know if I am missing something else on the calculator.

 Take my advice with a grain of salt since I am new to Real Estate investing myself (some of my family and friends are investors though; owning roughly 10 properties each). 

In my market, its a huge deal on the location. I actually made my first offer today in the neighboring city due to the fact that there is a trend of wealthy people migrating towards the east which is increasing development and property value in that area. It's harder to find deals in those locations though and the ones that are good deals requires major renovation. 

@Reginald Lewis

I am still new to real estate and buying my first home, but my family and friends all have been in real estate investing. One of them owns 35 single family homes out right. 

I asked the same question a while back and they said "...when the market does after the lease is up". They said it is normally between 2-5% a year depending on the market, but they have a rule of thumb of not increasing it during the lease period and wait until about a month or 2 before the lease expire to give notice to the tenants. Also, majority of contracts are fixed rent unless you specifically stated in the contract that you can raise rent during the period, but that pretty much defeats the incentive for tenants to go on a year or two lease instead of a month to month lease. 

I am new to the real estate too and still learning all the terms and such (was a stock day/swing trader wanting a more passive income) so take my opinion with a grain of salt. I am lucky that I have a realtor that is a family friend and her parents own a contracting company so they are pretty well verse of the market in my area. 

I was in the same boat as you that it is hard finding properties when I run the number for buy and hold properties. Even with my market being a buyer's market, it is still hard and normally the good ones that the numbers make sense, has at least 4-5 offers in.

I currently am in that bid for a house that kinda makes sense (depends on who you talk to and how much cash flow is involve) and from what the seller's realtor said, I am the only one that offered the current asking price (was 160k, but now 110k. comps in the area are 190-200k, but this one needs a lot of work).  My realtor is the one that suggested it due to the multiple offers and since this is a short sale, it'll speed up the process since that is within the range the bank wants (from what the seller's agent had said).

From researching and running a lot of numbers and some members here showing me why my market may or may not be a good place to invest opened my eyes that it doesn't matter what you want or what the numbers say. The market is just going to do its thing and the realtor knows the market way more than you or I can from reading books. With that being said, a 10% off the asking price is not that bad, but I don't know your situation. It could be that he knows there are multiple offers on the table which is highly likely if it is a seller's market. 

Thanks for the input. I'm gonna have a talk with my realtor and contractor to see the numbers. I used the calculator on here and it showed $150 cash flow after repair expenses, vacancy, PITI, etc (got the vacancy and repair rates from property management) was taken into account. Which I don't think is all that bad for 0 down. As long as I don't go to a negative cash flow I am fine. I'll be using my military benefits to pay for these homes and I have bank lenders in my pocket that offers 0 down no pmi for military outside of VA loans.

Still kinda nervous since it’s gonna be my first time buying a house let a lone an investment property. Still trying to get all the terms and such down lol. 

 No I havent thought about it. I am still active duty so I move around a lot, so I was just going to buy a couple of houses every time I move.