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Updated over 1 year ago, 08/16/2023
Ask Me Anything Mid-Term edition.
This forum has done so much for me and I felt a bit guilty this afternoon for not giving back.
Scaled to 48 Mid-Term Rentals in 2 years OH, hired a property manager and maintenance person. Quitting my job next week and moving to North Carolina to grow a portfolio there.
So Ask me anything, Mid-Term Rentals edition.
Quote from @Matthew Masoud:
This forum has done so much for me and I felt a bit guilty this afternoon for not giving back.
Scaled to 48 Mid-Term Rentals in 2 years OH, hired a property manager and maintenance person. Quitting my job next week and moving to North Carolina to grow a portfolio there.
So Ask me anything, Mid-Term Rentals edition.
If you was to do it again, what are the 3 steps that you would take now to get you to where you are now?
2nd how do you find clients?
3rd what steps were you taking screening tenants to prevent getting burned by a mon paying tenant?
Thank you Matthew.
Eliu
Matt, congrats! Eliu's questions are great, yout answers would be so helpful!
I would love to know your best tips for advertising. Best sites to use etc.
I’m also an agent in coastal Nc. Happy to talk!
Quote from @Eliu Rosario:
Quote from @Matthew Masoud:
This forum has done so much for me and I felt a bit guilty this afternoon for not giving back.
Scaled to 48 Mid-Term Rentals in 2 years OH, hired a property manager and maintenance person. Quitting my job next week and moving to North Carolina to grow a portfolio there.
So Ask me anything, Mid-Term Rentals edition.
If you was to do it again, what are the 3 steps that you would take now to get you to where you are now?
2nd how do you find clients?
3rd what steps were you taking screening tenants to prevent getting burned by a mon paying tenant?
Thank you Matthew.
Eliu
Thanks my man. The biggest one would have been to go bigger faster. I spent a lot of time on the duplexes, triplex, quads. Not because I didn't have the funds to scale but because I was scared of getting into the "commercial" side of multifamily.
I find clients on Airbnb, Furnish Finder, and just now start contacting directly with insurance companies to house their clients in the case of a fire/flood/etc.
Thankfully evicting in the state of OH is fairly easy but we also take preventive steps to protect ourselves. Traveling professionals have to show documentation that they work for the company they claim and are on a traveling assignment. We also collect a security deposit.
Quote from @Mark Townsend:
I would love to know your best tips for advertising. Best sites to use etc.
I’m also an agent in coastal Nc. Happy to talk!
Furnish Finder, Airbnb, and VRBO are great for under 10 units but eventually, you'll want to start building a relationship directly with insurance companies, hospitals, construction companies, etc to get direct bookings and keep your occupancy up.
#2 Medium-Term Rentals Contributor
- Real Estate Consultant
- Reston, VA
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#2 Medium-Term Rentals Contributor
- Real Estate Consultant
- Reston, VA
@Matthew Masoud Great tips! I agree on building relationships directly with companies instead of relying solely on OTAs. What is the average BR/BA count of your units? When I've reached out to insurance companies and I got the feedback that they prefer larger sized units (3+ bedrooms) to relocate larger family units, has this been your experience as well?
Quote from @Jamie Banks:
@Matthew Masoud Great tips! I agree on building relationships directly with companies instead of relying solely on OTAs. What is the average BR/BA count of your units? When I've reached out to insurance companies and I got the feedback that they prefer larger sized units (3+ bedrooms) to relocate larger family units, has this been your experience as well?
Most of our unts are 1bed/1bath because we are so close to the hospitals we been focusing more on nurses than insurance companies.
Yes insurance companies typically prefer larger units but they still use our 2 bedrooms if they cant find a larger solution for the family. (beats getting two or three hotel rooms),
How long did it took you to get to where you are at and how did you find the money to buy all your properties?
How did you scale to 48 properties so quickly? Please describe your process. Much appreciated!
Congratulations, Matthew! We are just getting started here in the San Antonio area. We have done some small-scale stuff in the past, but I truly hope we can be half as successful as you have been.
Quote from @Chue Xiong:
How long did it took you to get to where you are at and how did you find the money to buy all your properties?
Took me about 3 years. I was refinancing and flipping deals. For example I bough a 3-unit for $100k in 2020, fix it up, got market rents and sold it for 9 months later for $190k, took that and snowballed. This is just one example but I did this 3 or 4 times and kept rolling the money forward into better properties
Evenutally I had to partner with my brother -in-law to take down the 10-20 unit deals since the downpayments were large ($500k+) and I needed help qualifying for the debt
Quote from @Chaelynne Hernandez:
How did you scale to 48 properties so quickly? Please describe your process. Much appreciated!
Buying multifamily property. Adding value through repairs and rent increases. Then either refiancing or selling the property, then rolling that money into the next deal.
After a certain point I did start partnering to take it to the next level.
Quote from @Janette Tarbell:
Congratulations, Matthew! We are just getting started here in the San Antonio area. We have done some small-scale stuff in the past, but I truly hope we can be half as successful as you have been.
You're actually in a great market for this business model, best of luck.
@Matthew Masoud what is your process for furnishing the properties? Where do you get your furniture? Any must have features or amenities in your properties? How did you scale your management- are you managing yourself or outsourcing? How are you finding your deals? What metrics do you use to find your target market? (For example you mentioned you are expanding into NC) thanks in advance. Congratulations on working so hard to get where you are!
Quote from @Jake Hedrick:
@Matthew Masoud what is your process for furnishing the properties? Where do you get your furniture? Any must have features or amenities in your properties? How did you scale your management- are you managing yourself or outsourcing? How are you finding your deals? What metrics do you use to find your target market? (For example you mentioned you are expanding into NC) thanks in advance. Congratulations on working so hard to get where you are!
A lot of very good questions Jack.
My VA orders all the furniture and my contractor sends me one of his employees for furnishing. I can furnish a 2 bedroom for $3.5k (including labor) and a 1 bedroom for $2.5k including labor.
Some units have more amenities than others depending on the building but we offer soap, conditioner, razors, ect. We are going for a hotel-level experience in an apartment.
I scaled my management with systems and a VA that can handle a decent chunk of the management but many things still require my attention. I'm in the process of hiring someone on the ground that can work with the VA and do it all.
I'm looking for markets with over run hotels and large business growth brining in Mid-Term labor.
What sort of market research did you do prior to investing in OH specifically when trying to capture the insurance market? I'm located in Atlanta and I'm curious to know what things I should be considering when purchasing.
To be honest I stumbled upon the insurance clients by luck. What I realized is that these clients are everywhere.
Higher density of homes (especially single family) higher insurance housing claims you're more likely to deal with.
I also like to look at hotel occupancy in the area. I don't have specific stats but I'll call the closest 2-3 hotels and ask about availability. Pretty informal.
Quote from @Josie Kelley:
What sort of market research did you do prior to investing in OH specifically when trying to capture the insurance market? I'm located in Atlanta and I'm curious to know what things I should be considering when purchasing.
To be honest I stumbled upon the insurance clients by luck. What I realized is that these clients are everywhere.
Higher density of homes (especially single family) higher insurance housing claims you're more likely to deal with.
I also like to look at hotel occupancy in the area. I don't have specific stats but I'll call the closest 2-3 hotels and ask about availability. Pretty informal.
Nice! Do you think medium term rentals are the way to go? I suppose it depends on the city and neighborhood. I'm going to sell my SFH and move to an area with a lower cost of living and buy a quadplex (which I'll be able to afford, all cash and probably have a decent amount of money left over). I want to buy in a mid sized city, maybe with a college, and in an urban, downtown area if possible.
My thought was to house hack and live in one unit. Then, maybe rent out one of the others (or maybe all of them, eventually as tenants move out), convert them to medium term rentals. I have enough furniture to furnish one or two additional apartments, in addition to my own.
Or, for a newbie, would it be better to just focus on LTR? I like the idea of collecting more rent, but that means more turnover, but on the bright side, if I get a bad tenant, I know that in a few months they will be moving.
Quote from @Charles Lambert:
Nice! Do you think medium term rentals are the way to go? I suppose it depends on the city and neighborhood. I'm going to sell my SFH and move to an area with a lower cost of living and buy a quadplex (which I'll be able to afford, all cash and probably have a decent amount of money left over). I want to buy in a mid sized city, maybe with a college, and in an urban, downtown area if possible.
My thought was to house hack and live in one unit. Then, maybe rent out one of the others (or maybe all of them, eventually as tenants move out), convert them to medium term rentals. I have enough furniture to furnish one or two additional apartments, in addition to my own.
Or, for a newbie, would it be better to just focus on LTR? I like the idea of collecting more rent, but that means more turnover, but on the bright side, if I get a bad tenant, I know that in a few months they will be moving.
on the other hand, long-term rentals typically require less work, but also have significantly less returns
you’ll also eventually run into the issue I did in which finding a property management company for These rentals is difficult. you may have to start off your own operations like I did.
it all depends on what kind of returns you are looking for how much time you’ll have available to give to your properties and your goals.
Quote from @Matthew Masoud:
Quote from @Charles Lambert:
Nice! Do you think medium term rentals are the way to go? I suppose it depends on the city and neighborhood. I'm going to sell my SFH and move to an area with a lower cost of living and buy a quadplex (which I'll be able to afford, all cash and probably have a decent amount of money left over). I want to buy in a mid sized city, maybe with a college, and in an urban, downtown area if possible.
My thought was to house hack and live in one unit. Then, maybe rent out one of the others (or maybe all of them, eventually as tenants move out), convert them to medium term rentals. I have enough furniture to furnish one or two additional apartments, in addition to my own.
Or, for a newbie, would it be better to just focus on LTR? I like the idea of collecting more rent, but that means more turnover, but on the bright side, if I get a bad tenant, I know that in a few months they will be moving.
on the other hand, long-term rentals typically require less work, but also have significantly less returns
you’ll also eventually run into the issue I did in which finding a property management company for These rentals is difficult. you may have to start off your own operations like I did.
it all depends on what kind of returns you are looking for how much time you’ll have available to give to your properties and your goals.
Thanks for the feedback! I like the idea of higher returns, which is fine, even though it requires more work. I'll figure out if the building I get will be appropriate for medium term rentals, and decide if I want to manage it, or if I can get a property manager to mange it, which would be good, since I'm hoping to a PM for long term rentals too.
I've liked the idea of medium term rentals for a long time, years ago on HGTV's Income Property I saw a few episodes where they either suggested or actually created a fully furnished suite to rent out to people in the area for a few months at a time (maybe a nurse, professor, student in the city for one or two semesters, temporary workers, etc). I recall hearing the amounts of monthly rent being significantly higher, which is very appealing, though the higher turnover and more maintenance are the downsides.
I forgot to ask... did you form an LLC or some sort of company right from the start? Or later? I'm wondering if I should incorporate, for protection, keep business separate from personal and it will look professional. Not knocking anyone who invests in their personal name, but my plan was to incorporate right from the start.
If so, do I incorporate first and put in offers in my company name? And how do I transfer the money to the seller? Transfer it to me first, from my personal name to my company name to pay the seller? Not sure if that would trigger any tax consequences. But, for my first deal, I can't think of another way. For subsequent deals, I would already be established.
There are a couple great podcast episodes on asset protection, the main show ep. 595, and BP Rookie ep. 105 & 106, that give a ton of great information on what LLC's can and can't do for you.
For me, I personally use an umbrella policy for my protection but did setup an LLC immediately more so for financing later on down the road. I believe you need to show consistent income for two years before you can get financing through the business. I am working towards investing full-time and leaving my W-2 behind. So, I wanted to start the 2yr clock as soon as possible. I also keep my personal funds and business funds completely seperate. The corporate veil of an LLC can get pierced very easily if funds aren't managed correctly. It may seem complicated but it really isn't if you create a business bank account and credit card. You always can add a cash infusion into your business and repay yourself of that loan. I've been told that when you start pulling out business income (money exceeding the "personal loan" you gave to your business) for personal use is when things get dicey.
I am by no means an expert, but more so relaying advice that I have recieved. Hope this helps @Charles Lambert
Cheers!