everytime i work up numbers

General Real Estate Investing
1

everytime i work up numbers on deals in my local area i am consistently running into a VERY SLIM to NONE scenario in terms of cash flow.

i have to tell you. this ain’t easy.

whether it’s Lease Optioning or whatever…it’s just not good here.

even if i do a lease option, which i was just considering as my first deal.

it was:

a two family with the rent costing me 2700

270 to be applied to price

could probably rent each for 1900 = 3800

it looks pretty good, only thing is

monthly taxes = 380
h/o insurance = 225

that’s over 600 right there, leaving me less than 500 to work with to figure vacancy expenses and other property management expenses, not to mention utilities. Even if my utilities were 0 (tenant paid), this deal would be RAZOR thin.

oh the price of the unit was 475,000

2 - 4 year lease option - i would sublet of course.

it’s a good situation because the seller has no current mortgage, it just doesn’t cash flow.

2

If the price is $475,000 and the total rental income is $3800 that’s almost never going to make the numbers work.

You should be shooting for properties that rent AT A MINIMUM of 1% of sales price (if there is substantial rehab, 1% of sales price + rehab).

There are some markets where rentals just don’t make sense and other markets where flipping doesn’t make sense.

3

right, that 1% rule is a good guide. I have that stickied right to my monitor :smiley:

i just can’t remember these little tid-bits BEFORE i spend the time to actually do the numbers >:( …the tid-bits would save me time.

thanks…
:slight_smile:

4

In any market there is always someone, relocating, divorcing, dieing. etc. who may bemotivated to sell below value…

If you find them… they will sell…

5

investing isn’t easy.

i couldn’t make the numbers work in my area so i looked outside the area.

i have several homes several hundred miles away and 2 homes 2,500 miles away!!!

don’t let distance discourage you.

the biggest obstacles you face are psychological!