Beginner Rental Arbitrage

[Jon Dugal]

First time post! I've been listening to bigger pockets since January of this year and after exploring all the different avenues to get started I have decided to test the waters with rental arbitrage. My reasoning is because I simply do not qualify for a loan for any properties out here and units that are being sold off in smaller multi-family properties have ridiculous HOA rules that make it quite difficult to cash flow or just pencil out in general. I really wanted to house hack but finding a good deal that allows subletting is pretty much non-existent although I continue to keep my eye out.

I have befriended a real estate agent (who has become a true friend) and her son (who has aspirations to get started in real estate as well) and he has a house that will be vacant and is looking to rent it out. Now I have a few thousand dollars saved up with no debt and access to about 5K in borrowing power. He will be a first-time landlord and I asked him if he would allow me to help him through the process of putting a tenant in place and managing it just to learn the proper flow of how it's done and to get a strong handle on the systems that will allow us to do it. I plan on utilizing RentRedi for that so if anyone has experience using that and can share their story that would be great. 

Now, starting with strategy, long term would be a great fit but I really REALLY want to explore the mid-term rental space and the short-term possibilities. The problem with short term is that through my research I literally found no AirBNB listings in his neighborhood, which happens to be a nice quiet neighborhood. My first question is, is that a bad thing? Or does no competition mean that the chances are greater of some bookings. It's not particular close to anything spectacular but it's not way out in the country either. On the mid-term side I think it has really great potential. I've started cold calling local hospitals and larger businesses trying to see if I can secure a contract to provide them with a place to house their traveling professionals so more to come on that. 

When I looked on furnished finder there were two properties not far from his house and but not much else closer. Now I think that might be a good thing? I think with my financial situation this could be a good entry point into learning how to become a landlord. I would invest into the furnishings and spending time marketing to try and get quality tenants in place.

Let me know what you think of this strategy, anything and everything is welcome for advice or stories of your experiences in this arena. 

- JD