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[ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] Re: Dingbat Retirement Plan Posted by Gary - CA on November 06, 2001 at 1:54 PM In Reply to: Dingbat Retirement Plan posted by Jeeti Puri on November 05, 2001 at 4:41 PM : Prof. Ward : : Thx much for your wisdom, time, patience and education. It is appreciated. You are clearly a very learned person in this speciality. : I am based in West Palm Beach, FL.. 'Was thinking of buying 2 bedroom fixer-upper condos, attached homes, or SFRs for renting out after fixing. Unfortunately the economics looks like this : : Purchase Price = $ 60,000 : Fix-Up Cost = $ 20,000 : Cost of financing $ 80,000 @ 7.5 % = $ 500 / Month : Property Tax @ 2.xx % = $ 135 / Month : Insurance including Hurricanes = $ 50 / Month : Repairs - approximated = $ 50 / Month : TOTAL Monthly Cost = $ 735 / Month : Rent assuming 15 days Vacancy / Yr = $ 735 / Month : Without even considering all the many risks associated with renting, ownership, etc. inherent in this business, the investment will yield ZERO return. Future rent increase expectations are minimal - maybe 0-2 % / year at best, given the demand and supply of such condos / SFRs expected in the future. : Therefore the only reason to invest will be to gamble on future price increases. Such condos/homes have essentially gone nowhere in price in the past 20 years. Matter-of-fact many have gone down in price, despite the past 2 years where there was some upward momentum in prices !! : ONE bedroom fixer-upper condos can be gotten for $ 20-40,000 in cheaper less-desirable neighborhoods. But their economics works out the same as above - lesser cost and lesser rents, with ZERO return. : Please could you kindly advise if this business plan can somehow be worked out to yield meaningfully positive returns comparable to the underlying risks in this business. : Thanks much for your advice and time. It is sincerely appreciated. : Jeeti, I like your strategy of purchasing rentals in Florida. Florida is a state that has experienced near double-digit growth in several areas last year (like Tampa Bay and Jacksonville). However, $20k to acquire a rental is too much. Purchasing VA repos in Florida requires only $1k down (yes, even for investors). I have participated in this for years with total cash out less than $12k including fix-up costs. These properties even gave me positive cash flow after taxes. Gary Follow Ups: Post a Followup: Name : E-Mail : Subject : Comments: : : Prof. Ward : : : Thx much for your wisdom, time, patience and education. It is appreciated. You are clearly a very learned person in this speciality. : : I am based in West Palm Beach, FL.. 'Was thinking of buying 2 bedroom fixer-upper condos, attached homes, or SFRs for renting out after fixing. Unfortunately the economics looks like this : : : Purchase Price = $ 60,000 : : Fix-Up Cost = $ 20,000 : : Cost of financing $ 80,000 @ 7.5 % = $ 500 / Month : : Property Tax @ 2.xx % = $ 135 / Month : : Insurance including Hurricanes = $ 50 / Month : : Repairs - approximated = $ 50 / Month : : TOTAL Monthly Cost = $ 735 / Month : : Rent assuming 15 days Vacancy / Yr = $ 735 / Month : : Without even considering all the many risks associated with renting, ownership, etc. inherent in this business, the investment will yield ZERO return. Future rent increase expectations are minimal - maybe 0-2 % / year at best, given the demand and supply of such condos / SFRs expected in the future. : : Therefore the only reason to invest will be to gamble on future price increases. Such condos/homes have essentially gone nowhere in price in the past 20 years. Matter-of-fact many have gone down in price, despite the past 2 years where there was some upward momentum in prices !! : : ONE bedroom fixer-upper condos can be gotten for $ 20-40,000 in cheaper less-desirable neighborhoods. But their economics works out the same as above - lesser cost and lesser rents, with ZERO return. : : Please could you kindly advise if this business plan can somehow be worked out to yield meaningfully positive returns comparable to the underlying risks in this business. : : Thanks much for your advice and time. It is sincerely appreciated. : : : Jeeti, : I like your strategy of purchasing rentals in Florida. Florida : is a state that has experienced near double-digit growth in several : areas last year (like Tampa Bay and Jacksonville). However, $20k : to acquire a rental is too much. Purchasing VA repos in Florida : requires only $1k down (yes, even for investors). I have participated : in this for years with total cash out less than $12k including : fix-up costs. These properties even gave me positive cash flow : after taxes. : Gary Optional Link URL: Link Title: Optional Image URL: [ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] WWWAdmin 2.0a © 1997 Matt Wright and DBasics Software Company, All Rights Reserved

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