I have never been a person to hold more than 3 years on most properties. But here lately I have been looking at more cashflow instead of the buy lease option and rinse and repeat. I love this new math. After some study on expenses on my own stuff, I can really see that the 50% rule really works. Here is a property that I am making an offer which is a duplex on Thursday.
By the way its a short sale.
Listed 145K
GOI 15K per year
MTHLY 1250
Says expenses $3840 per year or $320.00 per month.
Each unit rents for $625 per month.
It needs about 5K total rehab.
Private Loan at 10% interest. to purchase. After rehab then refi to fixed loan.
So I took the $1250/.02 and came up with $62,500 as max offer on the NEW MATH. Take 5K out for repairs and that puts me down at $57,500.00.
I love this math…Did I say that. I am going after some trailers in the next county that are owned by the trailer owner. More than 70% of the people there have no mortgage on them and they will rent for 500-625 per month each.
Here is the funny thing. I have probably bought, built and sold well over a hundred properties. I had a lease option portifilio of close to 20 houses at one time. Trading dollars as I said it was. Buy sub2 then lease option out. Collect that back end and then pay off the credit card…lol.
Well I want to thank who ever came up with the NEW/OLD Math.
Regards,