All Forum Posts by: Adrian Rae

I'm in a similar boat as you @Timothy Garman - I own two properties with the same partner and wondering if we'll run into the same situation. @Greg Scott would owning the properties as joint tenants vs tenants in common have anything to do with "joint and severable liability which is why you see 100% of the liability?" 

His POV is that he’d rather have the cost of all the improvements built into the monthly mortgage payments than spend the time and credit card/debt to complete improvements on a fixer.

We focus on STRs but ensure the LTR rate out cover the mortgage (I double check expenses). So far we flipped a condo in Scottsdale and took out an interest free cc to pay for the contractor and furnishings. We still have the cc debt to finish paying off but the property has already appreciated 60K in 5 months. He’s not interested in long term appreciation, he wants cash flow so he can pay off the mortgage in 10 years or so. He’s rather not lose time and add debt making improvements on our own - he’s willing to pay for the work to be done, even if 10k’s of the purchase price and pure profit for the seller.

Is this a short sighted approach to developing a REI portfolio? Personally, I'm trying to make the case that the 30k we spend on our own flip can actually provide 2x as much value IF we were to sell it - but we aren't selling anytime soon so he doesn't see the value in that.

We're new, with only 2 STRs currently but looking to scale so we can quit our jobs and just focus on REI.

Can anyone else justify paying top dollar for turn key properties when just starting out as REIs? (we put 5 or 10% down)

Thank you!!

Hi there,

Sacramento STR folks - was obtaining a permit a smooth process for you? I emailed city planning and didn't get a very promising response as she referenced the housing shortage. I got the vibe they turn down a lot of permits from investors. My parents live in Sac and want a cash flowing + appreciating asset as they have just entered retirement. Any insight into the application process in Sacramento would be much appreciated!

Thanks!

Hi everyone,

We recently stumbled across someone who flips properties, wholesales, is RE agent, etc. he has offered to find us investment deals in Southern California off the MLS that he would purchase in cash and then contract over to us and proceed with a traditional mortgage company (apparently this is what he does for other investors) He said he would not charge us the 10k fee he normally would (maybe bc we have a mutual acquaintance??) but he would require an exclusivity agreement. So we wouldn't be able to work with our agent (he works off the mls) anywhere in so cal or find our own deals.

Is an exclusivity agreement normal for a wholesaler? What if he doesn’t find anything for months and we’ve lost a lot of time just sitting around waiting for him??

Also - he does own a construction company so he would “run the numbers” and incorporate any work that needs to be done, ideally by his own company…

Thoughts on this? Seems too good to be true - what’s in it for him?!

Thanks fine BP folks!

Split the difference. Start with on room dedicated to STRs and find a long term tenant or two who are also OK with one room being dedicated to STR. See how you like while still getting the guaranteed monthly income from the long term tenants.

@Matt Ruttenberg OfferUp!! It’s an app. I use it for side tables, bed frames, mirrros, small tables…basically any piece of furniture. Once I feel like I’ve exhausted my options there, then I’ll take to ikea or amazon. I hate buying ikea furniture new so if I find something I like at ikea, I’ll search around until I can find it used. This does not apply to mattresses or linens - those are always new. When I’m searching on Amazon (curtain rods, curtains, small kitchen appliances, etc), there’s often a used product available to buy - these are usually just open boxes, and if purchased through the Amazon Warehouse, fully refundable up to 30 days (sometimes a part may be missing but worth the savings if you’re really crunching pennies and don’t have a tight deadline).

Also, honey is a internet browser extension you can add on. On most online retailers, honey will pop up and run through whatever coupons it can find across the internet. I was buying a new fan on 1-800-lighting for my STR in Scottsdale last night and the honey extension saved me $92. The code was mobile20 if anyone is in the market for a fan, lighting, etc. 20% off. I never woulda known if it wasn't for the honey app!

Hope that helps!

@Brett Tvenge Thanks so much for your input. That's a valid question you ask....the gaps in timing may not be worth it.

Appreciate the insight!

We'll be closing on a condo in Scottsdale soon and have been exploring the cost for a rehab. This condo is approx 1000 sq ft, 3 bed 2 bath, and we plan to keep as a short term vacation rental. It needs a lot of work, except for 1 shower, basically everything needs to be replaced. Attached is an estimate from a local general contractor and I'm just curious how this sizes up compared to other estimates you've all seen - and if we'd be better off managing the project on our own and sub contracting specific parts out. Would love to hear your thoughts. Thank you so much.

First time home buyer about to close on a property in San Diego that has a unit in the back ideal for AirBnb. This potential income is a huge factor in our calculations for this property. The garage was converted by a licensed contractor, but if building permits were not pulled, will this impact my ability to have it be a legit AirBnb property in San Diego? Any STR owners out there who have experienced airbnb-ing in San Diego area?? Thank you!

Looking to buy multifamily properties in Fort Wayne, Indiana. Id like to start building out my team. Id love to hear any recommendations for real estate agents familiar with multifamily investment properties.

Much appreciated, thanks!