The next two shows are probably the most concise, most complete breakdown of the numbers involved in income-producing properties you will EVER hear for free. You are going to want to listen to this multiple times and take good notes. I’m not kidding. As we break this down today and next time you are going to hear about the impact of the purchase price and the initial rent-ready repairs. You’re going to learn about
- Interest Rates
- Loan Constant
- Expense ratio (or just a total of realistic expenses)
- You will learn the TIMMR acronym: Taxes Insurance Maintenance Management Repairs
- Cash on Cash Return (no leverage - just used to compare one property with another, but doesn’t tell the whole picture)
- Return on Cash (leverage)
- Return on Equity (tells me when I need to re-fi)
- Capitalization rate. Measure of your net income relative to the price of the asset.
For the first time ever on this show we are going to tell you how to look at risk.
- Debt Service Coverage Ratio
- Break Even Ratio
How to contact us
www.RogerBlankenship.com. Leave a voicemail right from the home page!
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Sponsors
American IRA: www.americanIRA.com
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Announcements:
- The Flipping America REIA meets every Wednesday from noon to 2 and Thursday from 7-9. You can join the REIA and learn real estate investing from the comfort of your own home, or get together with a few friends and form a chapter in your area. Learn more at flippingamericareia.com.
- Flipping America App is in the app store. You can listen to the show, read the show notes, and the entire catalog of shows is now available to you. It’s a free download and there are no upsells or in-app purchases. Free to download, free to listen. Go ahead and give it a try and drop me a line and let me know what you think.
- FlipCalcs allows you to enter one data set about a property and consider up to six deal possibilities .
- “Real Estate Investing Quick Start” Fifteen lessons to start your real estate investing career. Study from the comfort of your own home. I give you 8 action assignments in lesson 1 and show you how to complete them while holding your feet to the fire over the next 15 lessons. bit.ly/requickstart.
Topic: Rental Investing by the Numbers with Paul Rossano
Questions:
- Austin, Pittsburgh, PA “If my payment, including taxes and insurance is $1000 and my rental income is $1200, why am I not seeing income? In fact I think this is costing me money. The house is worth $140,000. I owe about $90,000 on it. The neighborhood is ok, I’ve had it for 3 years and no one stays more than a year. They move on to something better I guess.
- Quandre, Long Beach, CA “I’m not finding any income properties around here that fit the numbers you talk about. Is there such a thing as a “West Coast Exception?”
- Alonzo, San Antonio, TX “Why do you charge a fee to join the Buyers Club? I can’t really afford that.”
Motivational Thoughts for the day
“If life were predictable it would cease to be life, and be without flavor." - Eleanor Roosevelt
