I Flunked Math, But…PLEASE BROTHER PLEASE

Today I feel really bad.  I have been engaged by a consumer and what someone else sold them is, at best, a big loss.  They were SOLD and didn't remember Mrs. Jones' simple math rules.

Gross Collections - (P + I + T + I + Other) x 12 - Vacancy % = ROI

This is oversimplified, but can put a pucker on ya if you are not careful.

In a nutshell, if you can't make $100 / month per single family home then it is not worth the investment.  This is a minimum and most people expect more.  This might be different in other areas, but for the most part this is reasonable in Columbus.

Mr. & Mrs. Texas investor (who have not ever seen their investment) just sent me the following email about my assessment of their portential sale prices:

Rich, Something just isn't making sense here.  These properties were appraised by an independent appraiser (not a bank appraiser for mortgages) and we have 20% equity in each property.  your figures are several thousand dollars less then even our payoffs.  We cannot take that kind of loss.

We are speechless.

Some buyers agent, and I know who she is, sold these folks a bill of goods.

Tomorrow I will try to figure out a way to help them, but I can't change math.

I am rambling.  Bye.