Rick Blaine
Footballguy
Thanks for the feedback! I was looking for both rentals and flips, any potential revenue stream. $750 is probably pushing the envelop for a 2/1 stand alone, but it could be done in G'boro.
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- Thread starter jeff_eaglz
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stevegamer
Footballguy
Quick question on Quicken (Quickbooks?) Property Management:
I have a freind who is interested in starting up working for himself, and also becoming a LL - probably OO. His prospects self-employed are very good, based on his field and the demand in it. Does it have the ability to handle self-employment AND property, or not?
I have a freind who is interested in starting up working for himself, and also becoming a LL - probably OO. His prospects self-employed are very good, based on his field and the demand in it. Does it have the ability to handle self-employment AND property, or not?
Jeff Pasquino
Footballguy
Cap rates are more of a question for me, actually, but I'm sure Mike knows.Cap rate is short for "Recapitalization rate" - so you can see why they just say "cap" rate.The simplest definition is "how fast you get your money back on an investment". Recapitalization is how fast you are recapitalized - your capital being your
So a cap rate of 10% means you get 10% of your money back on an investment in a year's time (all caps are given assuming an annual return).The real estate method of applying a cap rate is this - if I buy Property A, how fast will I get that money back IF I BUY IT FOR ALL CASH!!!!So it gives you a return on your capital, or cash, much like a CD or savings bond would.We can do some more math and teach you about the subject (or you can just take my course, lol), but for a basis of comparison of one property to another you use the cap rate. Cap rates don't incorporate a mortgage (remember, ALL CASH) which is fair - you and I would borrow at different rates, but now we have some independent measure of each property we'd consider for an investment.If you need more help, PM me.
Jeff Pasquino
Footballguy
hmmm, what? Commercial? I'm listening.Where? Maine?I know a good investor in Maine - seriously.
Mike Anderson
Footballguy
Here is an example:Portland 20 Unit Building
Goto Loopnet.com and enter in Portland Maine. Some very interesting possibilities.
Here might be my Favorite:
Portland Brick 8 Unit
Brick 8 Unit with an assumable 4% mortgage??!?!?!? Obviously we need more details, but Portland Maine seems ripe.
Mike Anderson
Footballguy
End of the day, as Mr. Mackay would say "10 Cap rate is good, MmmKay". Basically, if you had all the money in the world, and bought a 10 Cap property, you would make back every penny you used in 10 years. Spend a Million, make $100K a year.As Jeff said, this assumes you buy in cash. It makes an even playing field. Obviously, if that Million costs you $110K a year, the 10 cap is worthless to you.10 is seen as a "Holy Grail" of sorts. Many investors chase the number 10 as a Cap. You will find 5-7 Cap rates all day long out there. A 5 Cap rate takes 20 years vs a 10 at a decade.Cap rates are more of a question for me, actually, but I'm sure Mike knows.Cap rate is short for "Recapitalization rate" - so you can see why they just say "cap" rate.The simplest definition is "how fast you get your money back on an investment". Recapitalization is how fast you are recapitalized - your capital being yourSo a cap rate of 10% means you get 10% of your money back on an investment in a year's time (all caps are given assuming an annual return).The real estate method of applying a cap rate is this - if I buy Property A, how fast will I get that money back IF I BUY IT FOR ALL CASH!!!!So it gives you a return on your capital, or cash, much like a CD or savings bond would.We can do some more math and teach you about the subject (or you can just take my course, lol), but for a basis of comparison of one property to another you use the cap rate. Cap rates don't incorporate a mortgage (remember, ALL CASH) which is fair - you and I would borrow at different rates, but now we have some independent measure of each property we'd consider for an investment.If you need more help, PM me.
Mike Anderson
Footballguy
Steve,Quicken Property Management ONLY does Property Management. It does not have functions for anything other than Property Management.
FOR THE PRICE, I think it is the absolute bee's Knees for Property Management as I posted above.
I don't have it open right now for examples, but it runs every report I need (I do wish it would run a report that said how much I spent at say Menard's, or any individual vendor, however I have been promised by the author that it will be added to the next upgrade).
Every tax/Accountant report I could ever need can be run. Every property is tracked, every expense, everything.
It is in every way what I need to run properties. That is how it is set up. It doesn't recognize across the board spending like Advertising or Printer Paper, so we had to set up a "Property" called Office/Company. It absolutely doesn't have all the bells and whistles, but it has everything I need to effectively manage some 80 units. I am personally very happy with it after doing research for about a year on what software to buy.
FOR THE MONEY, I do not think it can be beat. FOR THE MONEY.
It is absolutely still a Software being built and perfected. I bought it on version 1.0, and it was as basic as basic could be. They have since added a Rent Center, tenant tracking and other functions. They will continue to add for awhile. (I don't actually use the Rent Center, as I still use my old Excel Spread sheet for that, but what they have is Good, I just haven't spent the time to convert over)
My $100.00 early on has allowed me to upgrade for free to every new version.
As I said before, if you look at Property Management software, most of them cost hundreds UPON hundreds, if not thousands, and most require that you buy a new "key" every year.
Just looking at Property Management software, alone, and nothing else, I personally couldn't be happier with my $100.00 investment in Quicken's version.
It does NOTHING but Property Management, and honestly still has a way to go to be what the big boys (Read $1,000.00 cost) have to offer.
Davej626
5.56 solves all
Thanks Jeff and Mike. I can see how that would make everything even. A follow up question. Do you add in RE taxes into that? Different location would have different rates which would effect the math, but they all have taxes. I think I just answered my own question. Thanks again.Cap rates are more of a question for me, actually, but I'm sure Mike knows.Cap rate is short for "Recapitalization rate" - so you can see why they just say "cap" rate.The simplest definition is "how fast you get your money back on an investment". Recapitalization is how fast you are recapitalized - your capital being yourSo a cap rate of 10% means you get 10% of your money back on an investment in a year's time (all caps are given assuming an annual return).The real estate method of applying a cap rate is this - if I buy Property A, how fast will I get that money back IF I BUY IT FOR ALL CASH!!!!So it gives you a return on your capital, or cash, much like a CD or savings bond would.We can do some more math and teach you about the subject (or you can just take my course, lol), but for a basis of comparison of one property to another you use the cap rate. Cap rates don't incorporate a mortgage (remember, ALL CASH) which is fair - you and I would borrow at different rates, but now we have some independent measure of each property we'd consider for an investment.If you need more help, PM me.
Ten Yard Fight
Footballguy
I don't have a lot of time, but I want to describe a potential deal to you. 2 BR, 2.5 Bath 1190 sqft Condo in a trendy section of downtown Indianapolis. The cost is $245,000. It is leased to pharmaceutical giant Eli Lilly for 3 years @1900 monthly. Assuming the condo is worth $245K, what kind of premium is reasonable to pay for having such a great tenant in place. Also, the seller (a friend) claims that downtown Indianapolis condos have risen 10% annually over 3 years. Thoughts?
BassNBrew
Footballguy
Ten Yard Fight
Footballguy
After chatting with Jeff and a few other people, I'm going to let this deal go. There wasn't any monthly profit to be had, only the possible appreciation.
BassNBrew
Footballguy
Would be a solid deal in my market
elcohiba
We're for puppies
I got 2 buyers at same price ($365,000) We started at 385,000 and dropped to 378,000. 40 yr old bilevel needing kitchen update and having gone beat up and made nice again after 3 kids. On market 2 months...lots of traffic (say 60 looksees) I think we're priced right as reflected in steady visits. Realtor is bringing her client for a second visit tomorrow (I'm sure she'd like the bigger commish...not sure if a game is afoot).
One of the 365's has not budged from original offer. The other has come up from 357K.
Think we'll drop to $373K and say we're walking at that point and wait for spring time. Not a rush other than to get out of Jersey (NW--1/2 Hr to NYC). Maybe they're waiting for our "we're walking" offer.
Thats it I'm done. Thanks for your time. Will keep you posted.
One of the 365's has not budged from original offer. The other has come up from 357K.
Think we'll drop to $373K and say we're walking at that point and wait for spring time. Not a rush other than to get out of Jersey (NW--1/2 Hr to NYC). Maybe they're waiting for our "we're walking" offer.
Thats it I'm done. Thanks for your time. Will keep you posted.
Well OK. Took 2 months.
Davej626
5.56 solves all
Yea, I would be shocked as well. An inspection is a deal breaker with me. If I can't kick the tires, then no way would I be putting all that cash down, ya know? But good for you. Was it the buyer that was moving his price up, or the one that was staying at his first bid?Sold...Tie Breaker ....As Is / No home Inspection.Well OK. Took 2 months.
Franknbeans
Footballguy
tell me about the finance options. I am not in a position to do much with cash only.
Jeff Pasquino
Footballguy
huh?tipsy mcstagger said:
Mike Anderson
Footballguy
TYF,As you might remember, I lived just north of Greenwood, and worked in Indy. The short of my thoughts are that there is no Monthly Flow in that deal, and Indy appreciation isn't what it is in other markets. There are certainly Monthly flow deals to be had in Indy.
Mike Anderson
Footballguy
One of the reasons I win out on Bids is that I never ask for any inspections. But I am very comfortable walking through it and doing my own "inspection". I buy everything now days in "as is" condition.Yea, I would be shocked as well. An inspection is a deal breaker with me. If I can't kick the tires, then no way would I be putting all that cash down, ya know? But good for you. Was it the buyer that was moving his price up, or the one that was staying at his first bid?Sold...Tie Breaker ....As Is / No home Inspection.Well OK. Took 2 months.
Mike Anderson
Footballguy
Seriously not my Strong point. If I need say $500K I usually go see the couple of Lenders I use, lay everything on the table and ask how THEY are going to get it done.
If ProNinja is still around? Jeff or Bass would most likely be more helpful. Shoot Jeff a PM.
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Chadstroma
Footballguy
How have I not seen this thread before? I certainly will have to poke thru this.
Mike Anderson
Footballguy
Welcome Aboard. You might need a few days to get through this thing anymore.
Chadstroma
Footballguy
Yea---- gonna be a LONG time before I really can. Home access is non-existent right now and do not have the time at work. But one day.... oh yes, one day... I will!Welcome Aboard. You might need a few days to get through this thing anymore.
Mike Anderson
Footballguy
Dave, I can't remember how high you can go, but for reference:73 - 75 Highland St
What can you rent a 3 bedroom unit for there? $1,500 a month makes this worth looking at. I have ZERO idea of the rents in MA???? Could be sky high, could be low? Anyway, the Utilities are split.
I asking because I've found 1-bedroom units right there in Brockton in a similar building renting at $889 a month. I see another building with 1 bedrooms that looks to be in a lot worse condition renting at $775 a month.
I honestly don't see anything that I like that jumps out in Taunton. Nothing Cash Flows at all.
Multi-family Property
Seriously don't believe the hype of the Listing agent. However, there are six bedrooms here. One bedrooms seem to go in the $8-900 range. If you could get $1,500/$1,200/$800 here, it could be a go. Would depend on Utilities.
This is the cheapest thing I have found that is MAYBE appealing in your neck of the woods so far.
Multi-family Property
I'm only putting this here because of the picture. PERHAPS the blue building in the back is a Carriage house converted to a Unit, effectively making this two huge apartments and a "SFH"? Could pull the rents if that is the case. Need to research.
Actually, there are a TON of workable deals in Brockton under $300K. About every property I look at seems to be priced at about break even depending on how you get your money. I am conservative in getting mine. Most of these are deals if you use less traditional lending that might bite you in the ### down the road.
The real way I would work Brockton is print out every Multi Family listed under $300K. Drive around all of them and see what you like. Then start low-balling like crazy. You will get shot down a ton. Don't worry about it, there is a TON of inventory in Brockton, some of those people will drop their pants. It's the old College challenge of ask 100 gals a day every day to stay over for the night. You will never sleep alone. Sellers will crack in Brockton, there is just too much inventory.
BassNBrew
Footballguy
BassNBrew
Footballguy
knock knock
Mike Anderson
Footballguy
Ten Yard Fight
Footballguy
Thanks Mike. That's the conclusion I came to as well...partly from reading this thread and what you've been able to do in Fort Wayne.The thing that really made me think about it was the existence of a AAA tenant. I don't really know how to value that.
BassNBrew
Footballguy
Actually they are usually overvalued. You have no leverage and they are almost litigation proof regarding small amounts. If the look office closes shop who are you taking to court? On a scale of one to ten as a tenant, I'd put them at an 8.Thanks Mike. That's the conclusion I came to as well...partly from reading this thread and what you've been able to do in Fort Wayne.The thing that really made me think about it was the existence of a AAA tenant. I don't really know how to value that.
I no longer live in the area, but I'll be coming into a sizeable amount of spare $ in the next few months and am researching getting into re investing for the first time in charlotte. do you have any insight into the market there?
Also, is there anything to the .02 rule, where annual rents should equal 20% of the purchase price to assure monthly cash flow?
Thanks,
Also, is there anything to the .02 rule, where annual rents should equal 20% of the purchase price to assure monthly cash flow?
Thanks,
Great, thanks for the link
BassNBrew
Footballguy
Based on what I'm seeing in the mls, it's going to be hard to find something that cashflows in that zip.
Wooderson
Fight The Power
Anybody have any idea of the housing market in Minneapolis right now?
There is a good chance I might be buying a house there this summer.
Also if the stock market continues to go down some is this good news to home buyers? For some reason I think it would be but I might have no idea what I'm talking about.
There is a good chance I might be buying a house there this summer.
Also if the stock market continues to go down some is this good news to home buyers? For some reason I think it would be but I might have no idea what I'm talking about.
Jeff has been kind enough to hand hold me on this situation and this post is just a (delayed) update.
I have a little over five acres of land in Columbia, MO, actually in the county about a half-mile outside of city limits. There is an adjoining 3+ acres site across the creek that runs along our South border that has been in a family for three generations. The matron of the family is a dominant personality but ok to deal with, a bit intimidating actually.
Her two sons have had issues which has led her to disallow them access of use of the land or a small house (under 800 sf) on the property.
We inquired as to first right of refusal or an option. After a nice and lengthy conversation, she indicated that she will note that we are to have first right of refusal but for the time being she is maintaining the property as a possible scale down residence. She currently lives in a 2000+ sf farmhouse across town.
I think this is pretty much where it settles for now. The only thing I would press for would be a copy of her statement that we get first right of refusal, but I think it is better to work on that slowly.
The nice thing about this area is that we would have just about 9 acres combined with a creek running through and there are 40+ acres that lie behind that area that are currently undeveloped and the people who bought the land for development are looking to get rid of it due to excess cost I think. They already put in a waste water treatment plant that is rated for 75 additional homes. Could probably buy several acres of it for about $2,500 an acre.
Thanks to Jeff and others for helping me direct my energies in getting this far. I will update as things progress.
I have a little over five acres of land in Columbia, MO, actually in the county about a half-mile outside of city limits. There is an adjoining 3+ acres site across the creek that runs along our South border that has been in a family for three generations. The matron of the family is a dominant personality but ok to deal with, a bit intimidating actually.
Her two sons have had issues which has led her to disallow them access of use of the land or a small house (under 800 sf) on the property.
We inquired as to first right of refusal or an option. After a nice and lengthy conversation, she indicated that she will note that we are to have first right of refusal but for the time being she is maintaining the property as a possible scale down residence. She currently lives in a 2000+ sf farmhouse across town.
I think this is pretty much where it settles for now. The only thing I would press for would be a copy of her statement that we get first right of refusal, but I think it is better to work on that slowly.
The nice thing about this area is that we would have just about 9 acres combined with a creek running through and there are 40+ acres that lie behind that area that are currently undeveloped and the people who bought the land for development are looking to get rid of it due to excess cost I think. They already put in a waste water treatment plant that is rated for 75 additional homes. Could probably buy several acres of it for about $2,500 an acre.
Thanks to Jeff and others for helping me direct my energies in getting this far. I will update as things progress.
Big Blue Wrecking Crew
downsized
Some zip codes to look at:
07701
07752
07716
07748
07760
07704
Currently in a townhome, but looking for 3-4 BR to give the kids some space.
It is a high-end area, but hoping there may be some areas where some deals could exist.
TIA
07701
07752
07716
07748
07760
07704
Currently in a townhome, but looking for 3-4 BR to give the kids some space.
It is a high-end area, but hoping there may be some areas where some deals could exist.
TIA
Davej626
5.56 solves all
BBWC, can you give a little more detail? Are you simple looking for a SFH, or something else? Are you looking to rent another floor like a multifamily of some sort? How much are you looking to spend? Handy with tools? Etc...TIA.
Jeff Pasquino
Footballguy
You may have to move further inland based on my (limited) knowledge of that part of NJ.
Big Blue Wrecking Crew
downsized
Simple SFH...not looking for a fixer upper, but would not necessarily need to be in move in condition either. Rumor has it that the market in these areas has dropped off after a steep climb over the last few years, so I was just checking in here to see if anyone had better knowledge of the market at the present time.
Can you walk we through how your figuring that? This is exactly what I'm trying to learn.Thanks,
BassNBrew
Footballguy
I'm a property manger in this market and know what things rent for. I didn't see much under $200K in the mls system in the area you mentioned the zip (send me a pm with your e-mail addy and the zip and I'll e-mail you the mls sheets). High end properties aren't cash flowing in this area. Personally I think area 1 and 2 are the next to pop and the university area should be a desired location. If your looking at the south side or the lake area, invesitgate the fringes of the hot markets for value.
Mike Anderson
Footballguy
After 45 pages, this is easily one of the most helpful statements in the entire thread!
Jeff Pasquino
Footballguy
45 pages. Amazing.After 45 pages, this is easily one of the most helpful statements in the entire thread!
stevegamer
Footballguy
Okay guys, here's my current situation.
Current home: Jointly owned with a relative - I am to inherited their portion of the property. It was a rental to former in-laws (I know it was bad, but it was the right life decision if bad $ decision), but I now occupy. No mortgage, comp houses on the street are now going for $100K, we paid $50K about 6 years ago. Rents are roughly $800-825, tenant pays all utilities (including water) except trash & sewer. Tax burden is roughly $2650/yr.
Zip is 19023, on the fringe of 19018. Creek behind property is not a flood risk, and cemeteries on other side of creek.
1st: Is this a average or better rental property? Rents have gone up mostly in line with tax increases - breakeven has been in the 4th month of occupancy the last 6 years. I don't know if that's good or bad. I'm living here, so you can assume home is in good condition.
2nd: Let's say I owned this outright, which I can do pretty much at will without a mortgage. Is this the kind of place you would sell, and roll the proceeds into a new home, or would you keep & rent.
Current home: Jointly owned with a relative - I am to inherited their portion of the property. It was a rental to former in-laws (I know it was bad, but it was the right life decision if bad $ decision), but I now occupy. No mortgage, comp houses on the street are now going for $100K, we paid $50K about 6 years ago. Rents are roughly $800-825, tenant pays all utilities (including water) except trash & sewer. Tax burden is roughly $2650/yr.
Zip is 19023, on the fringe of 19018. Creek behind property is not a flood risk, and cemeteries on other side of creek.
1st: Is this a average or better rental property? Rents have gone up mostly in line with tax increases - breakeven has been in the 4th month of occupancy the last 6 years. I don't know if that's good or bad. I'm living here, so you can assume home is in good condition.
2nd: Let's say I owned this outright, which I can do pretty much at will without a mortgage. Is this the kind of place you would sell, and roll the proceeds into a new home, or would you keep & rent.
Jeff Pasquino
Footballguy
What's the neighborhood like as far as homeowners vs. renters?The question is, if you sell, what would you do with the $ and where would you live?So you are putting out $200-225 a year in expenses and getting $800-825 a month in rent. That's $600 to pay your expenses, but you have no mortgage.So you can get $7200 a year.Owning a property that generates $7200 a year is a good thing, but if you can sell it for $100K and roll that $ into a 9-10% return (netting 90K at sale, 10% to sell it with a realtor and costs, worst case). 90K at 8% gives $7200.Do you want to be a landlord or do you want to find a way to have the money work for you, earning over 8%?The answer as to if this is a good rental - it depends. Good tenant, appreciating market, easy to manage, no maintance, sure. Otherwise, it could be a big pain.Consider selling it on a lease option, where they put $3-5K down on the house and pay $800-900 a month to live there while they gain credit towards buying it. That's like renting it but also selling it (at a future date).Lots of options. All depends on what you personally want to do.PM me for more specifics if you want.
Random
Footballguy
Question for the pros
Reguarding my "flip" thats not selling. Not even an offer. Lowered the price 5K and still nothing. Anyway..
My question is about doing a lease option. If the house is priced at 129,900 what kind of lease option $ should I ask for? Whats the best way to figure the rent? I have a rough idea based on what I have going out each month (my min, about $750) but think it should probably rent for 900-950?
Also is there a downside to the lease option?
One more thing, if I decide to do this, do I just put an ad in the paper? After that?
Reguarding my "flip" thats not selling. Not even an offer. Lowered the price 5K and still nothing. Anyway..
My question is about doing a lease option. If the house is priced at 129,900 what kind of lease option $ should I ask for? Whats the best way to figure the rent? I have a rough idea based on what I have going out each month (my min, about $750) but think it should probably rent for 900-950?
Also is there a downside to the lease option?
One more thing, if I decide to do this, do I just put an ad in the paper? After that?
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