My first investment property... :O)

[HoldAndBuy]

I thought the school of thought here was the opposite ("nobody will manage it better than you can yourself")

2 - I am going to manage the property myself - so instead of paying the $80 or $100 to the management company I will pay myself. I know that this is frowned upon, but I thought it was a good idea.

[propertymanager]

I agree with Dave T.  This is not a good rental.  Here is how I see the numbers:

Gross rents:  $1,000
Operating Expenses:  $500
NOI:  $500

Mortgage ($75K, 30 yr, 7%): $499

Cash flow:  $1  (not good), and this doesn't include the costs associated with doing 2 loans (private money first, then a refi.

I would look carefully at flipping it.

Mike

[j1dias]

I thought the school of thought here was the opposite ("nobody will manage it better than you can yourself")

2 - I am going to manage the property myself - so instead of paying the $80 or $100 to the management company I will pay myself. I know that this is frowned upon, but I thought it was a good idea.

I meant no one considers the $80 or $100 that you would pay to a property management company as part of the cash flow. This is what I thought was frowned upon...

My thinking - the 50% "rule of thumb" includes property management fees. If I manage it myself, I will pay myself that money... In my area PM charges between $80 and $100 per SFR. I figured that money in my cash flow - as if I was being paid to manage the property myself... I hope this makes sense.

In addition, I am planning to do the maintenance work myself - considering how close the property is to my work I believe I will be able to handle most of the maintenance myself. This should account for an additional cash flow. I will pay myself to be the handyman...

I know what you are thinking - I am taking three jobs - landlord, property manager, and handyman, and probably will end up being paid for only two of them (property manager, and handyman). But I figured that as long as I am not losing money month after month, I will be fine. And if it doesn't work out, I will move into it or flip.

Thank you for the advice...

I agree with Dave T.  This is not a good rental.  Here is how I see the numbers:

Gross rents:  $1,000
Operating Expenses:  $500
NOI:  $500

Mortgage ($75K, 30 yr, 7%): $499

Cash flow:  $1  (not good), and this doesn't include the costs associated with doing 2 loans (private money first, then a refi.

I would look carefully at flipping it.

Mike

[JOHNNY Q]

fix and fip, What about seasoning issue for your state? Do you have enough reserve to hold? And if you did hold it, what is the point where all the money go back into the property? Hoiling too long may eat up the profits.  Just a thought.

[propertymanager]

If I manage it myself, I will pay myself that money... In my area PM charges between $80 and $100 per SFR. I figured that money in my cash flow - as if I was being paid to manage the property myself... I hope this makes sense.

In addition, I am planning to do the maintenance work myself - considering how close the property is to my work I believe I will be able to handle most of the maintenance myself. This should account for an additional cash flow. I will pay myself to be the handyman...

You're confusing two things here:  cash flow and job income.  Without ever going through the hassle of owning rentals and dealing with all the headaches, you could go get a job as a property manager and maintenance man and make as much as you will with your rental.  So, why buy the rental to start with?  If you're going to own the rental, your BUSINESS should be making money - that's the cash flow and it should be independent of the actual labor you're doing. 

Good Luck,

Mike

[HoldAndBuy]

(ignore my post, I misunderstood what PropManager was saying--I don't know how to delete a post on this board)

If I manage it myself, I will pay myself that money... In my area PM charges between $80 and $100 per SFR. I figured that money in my cash flow - as if I was being paid to manage the property myself... I hope this makes sense.

In addition, I am planning to do the maintenance work myself - considering how close the property is to my work I believe I will be able to handle most of the maintenance myself. This should account for an additional cash flow. I will pay myself to be the handyman...

You're confusing two things here:  cash flow and job income.  Without ever going through the hassle of owning rentals and dealing with all the headaches, you could go get a job as a property manager and maintenance man and make as much as you will with your rental.  So, why buy the rental to start with?  If you're going to own the rental, your BUSINESS should be making money - that's the cash flow and it should be independent of the actual labor you're doing. 

Good Luck,

Mike