Real Estate... is this a buy?

[zboy2854A]

Quote from bellman:

This is a fairly convoluted and ignorant post. We are all now dumber.

The only ignorance here is your own. Again, believe what you wish, it does not alter my reality or the facts of my experience.

And if you are dumber after reading a post that you disagree with from someone on the interweb, that sounds like a personal problem on your part. Good luck with that.

 

[scriabinop23]

Quote from zboy2854A:

OK, here you go.

Purchase price $150k. 20% down, $130k financed 30 years @ 5.5%.

Monthly expenses:

P&I: $740.00
Taxes: $600 (currently appealing )
Insurance: $400
Vacancy (10% of monthly rent): $300
Repairs/maintenance (1% of purchase price/12): $125

Total current monthly expenses: $2165/mo.

Current rent: $2700/mo (down from $2900 at time of purchase)

Positive cash flow: $535/mo.

OK Here you go for me:

Purchase price: $164k. 25% down. 6.62% interest.


Rent: 1625
--

P&I: 784.00
Taxes: 194.00
Insurance: 27.00 (dwelling policy)
---

Positive Cashflow: 620.

After Maint (100), Vacancy allowance (162) - under your assumptions: 358/mo.

Thats a 1% rent to purchase price model in socal buying a bank owned foreclosure.

God those taxes in Florida are rape. Why would anyone in their right mind spent $2700/mo on rent for a $150k property when they could rent a $600K property in San Diego for the same? (yeah that is mid-end here in SD, and I consider it absurd)

This is evidence your rent ratio needs to vary depending on insurance, taxes maint, and other costs.

ie Texas property is cheap, but the prop taxes are out of control. So you need a lot more rent. Florida is cheap but flood taxes are out of control.

 

[jd7419]

Quote from zboy2854A:

The only ignorance here is your own. Again, believe what you wish, it does not alter my reality or the facts of my experience.

And if you are dumber after reading a post that you disagree with from someone on the interweb, that sounds like a personal problem on your part. Good luck with that.

Who are you renting these unbelievable dumb deals to. 15 illegals or a bunch of guys running a meth lab. Barring the renter being involved in something highly illegal I don't see any reason for him not to buy his own place. On the flip side maybe there are some really dumb, lucky for you renters out there.

 

[zboy2854A]

Quote from scriabinop23:


God those taxes in Florida are rape. Why would anyone in their right mind spent $2700/mo on rent for a $150k property when they could rent a $600K property in San Diego for the same? (yeah that is mid-end here in SD, and I consider it absurd)

Part of it is location. This area is literally walking distance to the beach, so the rents are higher.

Also, remember that it's not really a $150k property under normal circumstances, I just got an insane deal.

And yes, the taxes are insane. Unfortunately, the appraiser's office down here doesn't count foreclosures as legitimate toward calculating assessed value (they use "reasonable market price under normal market conditions" ), so I'm getting raped. Right now they're assessing me on a value of $450k on the property. I'm hoping next year gets assessed at $300k if I'm lucky.

 

[bond tr4der]

Quote from jd7419:

Who are you renting these unbelievable dumb deals to. 15 illegals or a bunch of guys running a meth lab. Barring the renter being involved in something highly illegal I don't see any reason for him not to buy his own place. On the flip side maybe there are some really dumb, lucky for you renters out there.

There are people who are that dumb.

 

[zboy2854A]

Quote from jd7419:

Who are you renting these unbelievable dumb deals to. 15 illegals or a bunch of guys running a meth lab. Barring the renter being involved in something highly illegal I don't see any reason for him not to buy his own place. On the flip side maybe there are some really dumb, lucky for you renters out there.

Because some people like living in a really nice house where they can walk to the beach, and it's extremely difficult for a lot of folks to qualify for a mortgage these days, unless they've got a ton of cash for downpayment and flawless credit, and even then many people are getting turned down.

 

[scriabinop23]

Quote from zboy2854A:

Part of it is location. This area is literally walking distance to the beach, so the rents are higher.

Also, remember that it's not really a $150k property under normal circumstances, I just got an insane deal.

And yes, the taxes are insane. Unfortunately, the appraiser's office down here doesn't count foreclosures as legitimate toward calculating assessed value (they use "reasonable market price under normal market conditions" ), so I'm getting raped. Right now they're assessing me on a value of $450k on the property. I'm hoping next year gets assessed at $300k if I'm lucky.

oops. I also meant the insurance is rape...

 

[zboy2854A]

Quote from scriabinop23:

oops. I also meant the insurance is rape...

Yeah, unfortunately that's the price of having a property this close to the beach...

 

[bond tr4der]

Annual/Monthly Expenses

Property Taxes $2000 / 167
HOA $2040 / 170
Insurance $2100 / $175 (guesstimate)

Easily find a qualified professional at $850 a month / $10200 a year

10200-6140=4060 left for P&I, Maintenance, repairs and vacancy.

It does not leave much for a residual cash flow. Rents need to rise!

 

[zboy2854A]

Quote from bond tr4der:

Annual/Monthly Expenses

Property Taxes $2000 / 167
HOA $2040 / 170
Insurance $2100 / $175 (guesstimate)

Easily find a qualified professional at $850 a month / $10200 a year

10200-6140=4060 left for P&I, Maintenance, repairs and vacancy.

It does not leave much for a residual cash flow. Rents need to rise!

Or your purchase price needs to be lower.