Podcast #8 – Three Ways To Calculate Cap – Expenditures… So You Don’t Get Screwed A Year Into The Future

Are you aware of Cap-Ex or Capital Expenses the big unknown in your deal analysis spreadsheet. Learn 3 ways to calculate Cap-Ex... So You Don't Get Screwed a Year Into…

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The (RV Ratio) Rent-to-Value Ratio: 1st Step in Deal Analysis

https://www.youtube.com/watch?v=FdbYAtp3eSQhttps://www.youtube.com/watch?v=Dz_LXNZLoRIWhen you're considering buying a real estate property or looking into the real estate market, either you'll live in it (primary residence) or make it a rental property (investment property),…

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My Rental #4: Birmingham

I promised real life properties and updates and here is the first one. For obvious reasons, the address will not be released for the tenant’s privacy but I am renaming the properties with the city name (Birmingham, Alabama) and the corresponding number that it was acquired.

04AL

This property was put into service in September of 2014 and was the successful beta test to prove the concept of remote out-of-state investing. I acquired the property from a marketer that makes connections with the rehabbers in certain markets and finds buyers such as myself who are typically located in low price to value ratio locations (this does not necessarily mean high-priced locations) such as California, New York, Hawaii, Seattle, Portland, and basically the coastal areas that all the cool kids what to actually live. Marketers have their place if the buyer is totally clueless but once you purchase a few of these properties the marketer really does not offer much value. The only thing I see that they would offer would be someone to be the bad guy role in a negotiation but many of the marketers are buddy-buddy with the rehabber because of their business relationship and won’t stick their neck out for you. As the buyer, you need to take ownership of the due-diligence process and negotiations because that marketer is not a licenced agent and does not have a fiducial responsibility to you.

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Don’t Forget! Capital Expenses “Cap-Ex”

Podcast Version

Capital Expenses (Cap-Ex) are the large items on your expense list that are not repairs or maintenance. I repeat, this is in addition (account another 10-20%) to your normal repairs/maintenance for minor components.  Cap-Ex is for example roof, water heater, HVAC, flooring, paint, cabinets, landscaping, windows, etc.

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