#AskTheDanielMtz Show Episode 5: Costs, Costs, and Lunch?
It’s a rainy Monday here in Houston but I’m still here with another Q&A session! I get asked a lot about investment properties and costs associated with selling. I even get asked where the good spots for lunch are. No worries, those answers are down below. Have questions? Don’t hesitate to ask them! All audio content can be found on Anchor as well as on Snapchat channel @TheDanielMtz @txc_Daniel
Q. What formula do you use in order to understand the investment ROI?
A. The factors that determine an ROI are: sale price of the property (SP), rehab costs associated with fixing the property once it’s purchased (RC), the flip fee which is the commission paid to the seller and buyer’s agent, typically 6% (FF), closing costs (CC), and the retail price (RP). This formula can be applied:
ROI= RP — (SP+RC+FF+(2CC))
This formula can come in handy when deciding to pull the trigger on an investment property. If the rehab costs start to climb, the sales price is too high (therefore affecting commissions paid out), or the area’s market movement is slow, the ROI can start shrinking, potentially causing more headaches and stress than profit. Do your research, planning and accounting, and you’ll be off to a better start.
Q. What is associated with seller’s closing costs?
A. Seller’s closing costs can vary depending on the location of the property (city, state, etc.), but the type of costs are pretty much the same. Those costs are typically associated with titles, policies, tax work, certifications, deeds, surveys, and commissions. These expenses can definitely start to add up but are the standard when it comes to selling a home.
Q. Where are the best lunch specials inside the Energy Corridor?
A. My favorite spots for lunch with the best specials are:
- Chinese- Bamboo Garden
- Thai- Thai House
- Mediterranean- Hungry’s
- Mexican- Sylvia’s Kitchen
- Japanese- Aka
Try any of these for some great lunchtime cuisine.
That’s it for Monday’s Q&A. I’d love to answer any questions you may have. Don’t forget to reach out to me on any of my social platforms. Until next Monday!