All Forum Posts by: Aaron Hollingshead

Interesting timing on your post as today I got new cabinets and countertops installed in basically the exact layout you have.  It's hard to even believe that these are the same room (I promise they are).  Total cost for cabinets, granite and install was 3,000.  Include flooring and appliances and I'm looking at 5,000 dollars all in.  This is basically exactly what you have so I'd just leave the layout more or less as you have it. Keep it simple!  

@Nathan Gesner - you're right!  Honestly, your post is on point!  I'm an oversees investor and I basically live in my own head...My only  "partners" are the books I read and the podcasts I hear, so maybe I need to be more proactive about finding way ways to connect with REAL investors.  Thanks for the perspective.  Cheers!

@Johann Jells...wow!  I literally laughed out loud reading your comment.  As somebody who overdoes all of my properties (as an example, tomorrow I'm laying granite in a 750 a month rental) I looked at that kitchen and thought "looks alright as is".  I guess it's all market specific!  

I do agree with the wisdom of doing one to see what works and what doesn't.  I picked up two identical duplexes just like you a year back and rent was 380, 420, 420, 0 (vacant/trashed).  Fast forward a year and they are 500, 500, 600, 750.  The first two I did no improvements, I just simply said to the tenants - I'm going to honor your rent for 2 months then it's going up closer to market value (still not there).  The other two were full makeovers.  But for the one at 600 - I put in full new mini split system to the cost of 7000 dollars...it rented in an instant and I had dozens of calls...I got to thinking I had undrelisted it. So for the next renovation, I threw in window units instead (600 dollars) and posted rent at 750...I got maybe half the calls but...it rented out in a week!  It was a good reminder that what I want and need isn't necessarily what all renters want and need.  To that point, maybe you should move away from your inspirational photo, subway tile backsplash, etc unless your market really demands that and to just look at what the area comps demand.  Maybe they just need Ikea/Home Depot countertops, roll down laminate basics...who knows.  

Honestly, if that was me...I'd put a new coat of white paint on the cabinets, slap some Euro handles on and put the cheapest granite you could find down...you should be able to do that for 500 dollars and that's all you need! 

At any rate, yes, it's not the most aesthetically pleasing kitchen but it's also not half bad!  There are loads of people who would take that place AS IS (are you considering that?). Good luck! 

This is one of the toughest questions!  Let me share a couple of personal examples from my rentals...

#1 - In Portland, OR - Purchase 387,000 - Rent 1950...Last year I was -5,000 in rental returns (whomp whomp) - .5 % rule (is that a thing?)

#2/3 - Two dwellings in Roswell NM Purchase 45,000Rent 725/1200 respectively - this year's anticipated returns = 6000 (after renovations/upgrades - 1.5% rule)

#4/5/6/7 - Quad in Roswell Purchase price 65,000 - Rents 500, 500, 600, 750 respectively - This year's anticipated returns + 11,000 (2% rule baby!)

Even with all of that evidence, I still find myself gravitating towards the more sexy investments (aka, the ones that don't yield much money) and have to remind myself to focus on what brings in the bucks.  For me, the more units on one parcel, the better return.  But from what you've stated, it's hard to say if that is true necessarily for the multi you mentioned (is there shared utilities, other costs).  I'd say if you want to go towards multis, make sure that there is a good financial reason to do so - which the numbers you shared don't necessarily point towards.  Good luck! 

The key to me is that you said "until inspections are complete and contracts are signed".  Personally, I'd never get an inspection until the contract was signed.  At which point I'd never worry about somebody backing out (although it did happen once, lol) - normally at that point, it would only ever be the buyer who might back out DUE TO the inspection...so if I was you, I'd be a bit irritated by what you are hearing.  The only reason I might understand where there are coming from is if they have lost a buyer (or two or three) due to COVID...best of luck!

Can you?  Perhaps...Should you...I'm not sure.  I think that buying a rental would be unrealistic as you'd need to have 20% down to get an investment loan.  A live in flip?  Maybe...but only if you have the means to come up with another 10 or 20k in the next 6-12 months to fund it.  House hack?  ABSOLUTELY!  I think that in your situation, that might be the best way to go.  Get a place with several rooms you can rent out or a duplex/triplex where the numbers make sense and that might be the most prudent move for you now.  Otherwise, I'd maybe save another 10k at least if you were going to go into buying a rental and probably 20k for a flip.  Best of luck! 

Do you ever worry?  I'll be the first to admit that I tend to overthink things...I'm all in on real estate - in 5 years I've acquired 7 rentals and flipped 8 houses, but as I continue on the pathway, I find myself worrying more and more.  One day I think about building an empire, the next I think maybe I should pay off a couple of units and put things into auto pilot.  

For context, the first flip I did I was a young person with no kids...I had no idea what I was doing.  My even house got red-tagged because I was installing a roof without a permit (permit??  no idea!).  That didn't phase me one bit (and actually that was a killer flip coincidentally)! 

Fast forward 5 years and now I pull full reno permits, don't cut corners, understand more fully what I'm doing, etc.  I have refined criteria, I always put 20-25% down on rentals, I am pretty conservative by most accounts.  But I also have 2 kids now and significantly more net worth and I just find myself thinking about statements you hear from investors such as "it's only a matter of time before you get sued in this business".  

Does anybody else think about this sort of thing?  I legitimately try to do everything right - I treat renters with dignity and respect, over-remodel my units, I tend to be lenient most of the time but at the end of the day, maybe I'm just wondering at what point it's time to intentionally plateau instead of continuing this arch?  

Anybody else wrestle with this sort of question?  

Based on what you said, it probably wouldn't make much sense to invest in that property.  The whole benefit of multi-family is the economy of scale.  So if you're getting less per door, then you're missing out on the benefit of multi.  I have a quad with average rents of 575 per unit and I paid 65,000 for it.  After repairs and upgrades I'm all in for right at 100,000 and I cash flow more than 1,000 each month.  So to me the deal you're describing doesn't sound like it leaves much meat on the bone.  

@Gerald Pitts - this is a crummy situation, sorry you have to deal with this!  There is nothing more terrifying in my opinion than bed bugs!  I once went tracking for 30 days and managed not to get them until the last night...I was worried for weeks as they are notoriously difficult to get rid of.  I suppose if you have had 200+ people come through, then it's not outside the realm of possibility that somebody brought them along with.  I think some of the previous posters are absolutely right - you respond to their comment stating that while you didn't see evidence of any bedbugs, you still had an exterminator inspect the house and treat it for pests.  If you've got a bunch of positive reviews, I don't foresee this hurting you. 

Agree with @Daniel A. - you might not be required but I'd go ahead and do it.  Or better yet, can you just unplug them and take them out of the house?