Posted by Bryan on February 23, 2001 at 22:43:59:
Thank you. I just need to re-caculate that to Los Angeles rents, usually homes starting at 175,000, i was horrible at math and still am, THANKS AGAIN
Once Bought, & Fixed-What about Loan payments - Posted by Bryan
Posted by Bryan on February 23, 2001 at 22:07:19:
Once Bought, & Fixed-What about Loan payments till Rented or Sold
Meaning, I’m very new to all of this. I get a property, fix-up now ready to sell or rent, Please explain how profit goes in pocket if not rented right away or sold.YES I’M NEW TO THIS. Please xplain profit once finally rented/sold and from where
Re: Once Bought, & Fixed - Posted by Mike-BC
Posted by Mike-BC on February 23, 2001 at 22:34:12:
When you set about to purchase a property and fix it up, you start your plan by looking at the end result. Suppose your plan is to rent it out. Then you would make sure you knew what sort of rent the property could command in the local market place, let’s say $600 per month. Working backwards, factoring in operating expenses of insurance, taxes, utitilies, vacancies, etc… you determine these to total $200 per month. That leaves $400 per month to service debt, meaning that it could make payments on approximately $50,000 mortgage. So you need to buy and fix up the property for less than $50,000 to make a profit. When you arrange financing, you could build in a cushion to permit you to make monthly payments while you wait to get it rented.
Likewise if you were going to sell it. While doing the due diligence of analysing the cash flow, you would build in a cushion of up to 6 months of payments while the house was being sold.