Ask David ForumCategory: Questionsgreat-book-id-like-to-exchange-some-information-with-you
Bill Stoneback asked 1 month ago

Hey David, Finished your book. Great stuff! I’m located in the Milwaukee market (suburbs). I’ve been investing for a little over a year. If you’re interested in this market I’d be happy to supply you with some good contacts of mine. I found a great realtor/mentor and things have gone well since then. After reading your book, I did not find much detail on how you calculate your net cash flow. For example, you mention having reserves for CapEx. Would you be willing to provide a breakdown? I tend to get stuck on CapEx and it seems there are two approaches. 1. Set aside $150-$200/m. After doing a 30 year breakdown of all the major items this is the cost per month. That is if the house is in good shape too. 2. Reserves + Scale. Set aside roughly $10k per house for emergency repairs and since you used the brrrr strategy you have a lot scale (let’s say 20 rentals), meaning a lot of income per month. If a house needs the roof replaced, you have 19 houses generating income to pay for it. Plus long term / if you bought right you also have access to equity if needed. It seems to me option 1 if you have 5 homes or less and option 2 if you have scale. Is this correct? Thanks for putting the book together. It’ll help a lot of people improve their lives. Bill Stoneback