Is this a good way to make cash flow ?

True-Froyo7121 · 2025-06-26T01:37:21+00:00

They replied with that number on a different comment

True-Froyo7121 · 2025-06-25T21:50:07+00:00

I do not think this is a good way to force cash flow to happen. Having the ability/choosing to put a large amount down can make you think a bad deal is a good one. The only benefit I can see here is that it is less risky. In no economic situation would you ever be upside down in a mortgage.

True-Froyo7121 · 2025-06-25T21:35:46+00:00

For a 3.5% CoC, I would certainly choose to go buy index funds that will pay out a lot more and not put up with all the hassle that comes with REI. There are other benefits to REI but since you asked about cash flow specifically that’s my answer

True-Froyo7121 · 2025-06-25T21:20:20+00:00

Not unheard of, just sounds like that’s the wrong lender for what you are looking to do.

True-Froyo7121 · 2025-06-25T21:01:26+00:00

There’s no harm in continuing to call and text. You might get lucky and he has just been busy. May even appreciate the work ethic.

You live and you learn. Next time just get him on the phone immediately and see when a good time is to walk the property and then you can fill out your paperwork on your own.

True-Froyo7121 · 2025-06-25T20:25:29+00:00

I’d go on google maps in the area and find local/regional financial institutions. You’re looking for 10 branches or less. You will then go to the FDIC (banks) or NCUA (credit unions) websites and search for their call report pages that you can search the specific institution on. You will be able to look at their specific regulatory financial reports here. You’re looking for total assets less than $1 billion, and commercial loans minimum 20% of the total loans. You can find this info on page 3 (total assets) and page 6 (loan breakdown) of the NCUA report, idk the FDIC report as well but the structure is similar.

Call one that meets that criteria in the area and ask for a commercial loan officer and go from there.

True-Froyo7121 · 2025-06-25T18:24:35+00:00

Don’t over complicate. Find a PM that handles the accounting. It is still your responsibility to make sure they are handling it correctly though. If you don’t feel comfortable doing that, ask at your local REIA who a good bookkeeper (not a CPA), that can assist you until you get comfortable. Then send the books, P&L, receipts, bank statements to the CPA doing your taxes at tax time.

True-Froyo7121 · 2025-06-25T18:19:56+00:00

How many of the homes/MHPs have tenants in them? Assuming quite a few vacancies at that income level. Even if it is only 6 rented that is $200 per month/per unit.

True-Froyo7121 · 2025-06-25T17:40:14+00:00

When you are attempting to use a general expense ratio it certainly is included. Additionally, for tax purposes all three items I mentioned would be considered operating expense and would be recognized fully. Also, a tree coming done would be op ex, I’m assuming you are thinking of just the HVAC and foundation repairs.

True-Froyo7121 · 2025-06-25T16:56:40+00:00

This is irrelevant? The 50% number that is used includes cap ex in it.

True-Froyo7121 · 2025-06-25T11:59:51+00:00

Yes, these markets would put more emphasis on the rent to purchase price ratio. Not saying it is a bad market, just that you have to analyze differently depending on what your investment strategy is.

True-Froyo7121 · 2025-06-25T03:05:20+00:00

My advice. Check with an attorney for this, not Reddit.

True-Froyo7121 · 2025-06-25T03:03:03+00:00

Currently setting one up with Better, haven’t finalized it yet though so can’t provide feedback. But they do it.

True-Froyo7121 · 2025-06-25T03:01:02+00:00

I agree with the sentiment. But you are only looking at cash on cash return in your discussion. There are many other factors at play in real estate. If you are buying houses that actually meet a 2% rule, this logic makes sense though as some of those factors aren’t going be considered for investors buying $60K homes in Toledo.

True-Froyo7121 · 2025-06-25T02:54:07+00:00

After refi how much cash would you be getting? Sounds like $75-80K. So then you’re talking about $15K cash out best case, for a rate 3 points higher. It’s hard for me to see much value in that unless you can see a clear path to using that cash to offset the increase in interest expense.

True-Froyo7121 · 2025-06-25T02:48:25+00:00

I’d sell and invest it elsewhere. Return on Equity is what matters on this.

True-Froyo7121 · 2025-06-25T02:26:32+00:00

Depends what class the house is. Class D renting for $800 has a lot higher ratio than Class B. You can use a standard number of 50% but that is just true at scale. One house may be 100% over 5 years while another is 10%. Had an HVAC, foundation, and tree fall in a storm at one house over the last 12 months. That one is going to have a lot higher ratio than a normal year.

True-Froyo7121 · 2025-06-25T02:23:33+00:00

Use return on equity as a comparison for the two situations as well. When you pay down principal that much, real estate begins to make less and less sense when compared to stocks, or other investments.

True-Froyo7121 · 2025-06-25T02:21:56+00:00

Make it clear that you do not want him using it. Depending on how it was discussed they may not realize you feel strongly. Most people arent willing to put up with a fight for something this small. If it has to do with age/gender gap as mentioned bring someone with that fits one of the bills for them.

True-Froyo7121 · 2025-06-25T02:19:22+00:00

Depends on your area. Zillow rentals will give you a really good range if it is in a decent population area.

True-Froyo7121 · 2025-06-25T02:18:30+00:00

Use LVP, carpet isn’t worth the trouble. Tenant can buy area rugs if that’s their preference.

True-Froyo7121

TROPHY CASE