100% Investment Property Financing

[clifp]

Hey clifp - I am fishing in Minnesota - not New Mexico

A couple clarifications - typical buyer side commission here is 2.7% and then I split it with my broker so probably about a 2% break but then I pay taxes on it.

My primary maintenance costs are actually appliances and HVAC repairs so I'm not sure your costs are that different. All of my units are townhouses (& 2 condo's) which I specifically bought to avoid any outside maintenance issues.

Also, the 50% rule already assumes that you are paying for property management. That said, I'm sure I do much better than farming it out since I am much more on top of things. Biggest difference (besides not paying 8-10%) is vacancy. I've probably had a grand total of 2 months vacancy total across 10 units in the past 4 years. I don't typically raise rents on current tenants and I have very little turnover that way which avoids vacancy and the costs of refreshing unit.

Sorry about that I knew it was Minnesota, is there enough water for fish to live in New Mexico j/k.

What you don't have the tenants, that stop paying rent then trying to sublease the place for cash after the eviction notice? After being evicted they sneak back (using the garage door opener) to steal the washer and dryer and the hot water heater, but don't bother to turn off the water and hence flood the garage. After repairs, eviction proceedings, and vacancy I got one months rent from that house last and was in pretty nice condition (2006) when I bought it and beautiful when I rented it out. I have had my share of appliance and HVAC problems but plenty of other things also.

I notice a lot of folks don't raise rents ever or seldom on existing tenant. When I was constructing spreadsheets of course I factored in a 3 to 4% annual rent increase. But when comes time to renew the lease, if you have a good tenant, you always hesitate cause a 2 month vacancy and clean up cost are typically two to four years worth of rent increases.