All Forum Posts by: Adrian Stamer

Richmond is a great place to find actual cash flowing properties.  That's where I buy my rentals.  I'd recommend driving down there a few times and familiarize yourself with the area.  Richmond has a diverse market and you'll want to decide which areas you're willing to purchase in.  Good job saving up that money.  $40k will get you at least 1 cash flowing property.  Save up the proceeds from the cash flow and buy one again when you have enough for another down payment.  I have a great property manager down there that can help you if you need it!

Here is the link to the listing, let me know what you think: https://www.realtor.com/realestateandhomes-detail/1801-4th-Ave_Richmond_VA_23222_M58993-12368?view=qv

Hi, I am buying a house in Richmond Virginia that I plan on using as a second home/seasonal home. I will stay there about a week or two a year and list it for short term rental the rest of the year. I am trying to get homeowners insurance on the house, but many companies will not provide policies for a property for short term rentals. I know that sites like AirBnb and VRBO offer insurance that protects the host from incidents that happen during a rental, so is it necessary to get my own insurance to cover these rentals? Or could I get a policy that covers me potentially has the primary resident, assuming the rentals are covered by the renting company? This is my first RE investment so any advice is appreciated! Also could use recommendations for homeowners insurance companies that will cover short term rentals if that's the right move.

In the Museum District of Richmond Va I've found a multifamily (4 units) property on a good size lot for that area that has a back ally access with a good size back yard and no garage like most of the neighbors have.

Please some one well versed in Commercial properties and multifamily tell me if I'm on the right track with this line of thinking..

My approach is to buy the property using A conventional residential financing and build a garage with an upstairs apartment, making the grand total number of units on the property a fabulous Five.. which is infinitely more in the eyes of Lenders because a 5 unit property is considered a Commercial Space. Thus the income of the property determines the value. Here's what I think I can do

Purchase Price - $675,000

Cost to build 5th unit $70,000

projected:

average income of each unit - $1,100

gross monthly income - $5,500

annual gross income - $66,000

NOI (assuming 50% Rule) - $33,000

At a 4.0% Cap I can presumably refinance out all of the "Original Money"and into a Commercial Loan... Right?

What am I missing on this analysis? Is Multifamily really that simple and awesome? That I can control the value of the asset solely based on the income it provides and the Cap Rate? But that leads to some questions on Cap Rate..

Who "sets" the cap rate for an area?? What Cap rates are expected in that area? I know the formula for a Cap rate and I understand how they are used to value and compare multifamily assets but how can I expect a Cap rate to change over time? It must be specific to markets but how does it change with economic climate?

@John Pierce #2 completely kills @Ryan Wydler's model, and the model @Stephen Glover mentioned. That's exactly the AirBnb killing piece of legislation I was referencing.

Legalized in some capacity, perhaps - but killing any full-time business opportunity for entrepreneurs.

It was a stupid comment, Andrew. Hope the weekend treats you well.

Does anyone know of a bank in Virginia (Richmond area) that won’t look at tax returns ?

Just listened to the Pat Hiban on the BP podcast and heard that there are lenders who won’t look at tax returns or one’s that will do more than 10 loans. So if you know any such lender that will be helpful especially since I haven’t had a W-9 job for more than a month.

Thank you for your time.

Welcome to the game! We've got a great monthly event for multifamily and commercial investors going. There are a lot of great real estate networking opportunities in Richmond!