All Forum Posts by: Alacia Mahnken

Net profit of $2-5k mo? Maybe $2k, but $5k is a lofty goal for an average STR (depending on location of course). Make sure you're realisitic and looking at pure NET profit after all expenses, including taxes...

When I initially set these goals, I was still in the "bright-eyed, bushy tail" phase of envisioning my future REI portfolio. Yes, I had a goal with NET profit of $2K - $5K per month per STR.

I now realize that this is only attainable in highly desirable locations and with larger or more unique properties. And you have to put a fair amount (25%+) down, operate in the Top 10% of your market and truly have an outstanding property.

Influencers and social media gurus make it seem like this is much more achievable than it actually is.

So very true! If nothing else, you have learned a ton with this first deal and maybe also found that for you, house hacking on repeat is the better option for your path to financial freedom.

If I were you, I would hold the property...you have already put your money, blood, sweat and tears into it, now its time to let it work for you (with your PM). Plus, some of the cost that you mentioned are not specifically for the deal and shouldn't be factored into the calculations to determine if THIS deal was a good/bad one (i.e the mastermind course, setting up your LLC, etc). It may start to look a little nicer, if you take those out ;) I get that you are trying to be very honest with yourself and look at it from a gain/loss scenario.

You don't put more chips into a bad hand in Poker just because you have already put a lot of chips into the kitty. The more you add, the more you lose, and the fewer chips you have left to recover those lost chips. Eventually, you're out of the game, and blaming it on bad hands. You fold. This is no different.

I get that, but this wasn't exactly a "bad hand" and I am certainly not suggesting he put any more money into it. The numbers are skewed by added expenses that had nothing to do with the actual deal. He put a ton of money into cap expenditures on the front end. The way to recoup that is not to sell, but to hold and to continue to build equity while also working with his PM to increase his NOI.

You recover your costs (cash) with cash returns (cash flow). You can go broke if you wait for the equity, which can be lost just as easily as it is gained, to recover your cash costs. Equity is profit that is made at the backend. Cash flow is what recovers your costs because your cost (cash in) is immediate. You have to wait for your profit. While you're waiting for your profit, and losing cash (adding cost) from negative CF, you are also losing opportunity profits because you are spending more cash on an already owned property, when it could be better spent on the next property.

I agree that he should not hold if continued to get negative cash flow.

0 Votes

Quote from @Joe Villeneuve:

Quote from @Alacia Mahnken:

Quote from @Steven DeMarco:

Quote from @Bruce Woodruff:

Quote from @Steven DeMarco:

When I initially set these goals, I was still in the "bright-eyed, bushy tail" phase of envisioning my future REI portfolio. Yes, I had a goal with NET profit of $2K - $5K per month per STR.

Influencers and social media gurus make it seem like this is much more achievable than it actually is.

So very true! If nothing else, you have learned a ton with this first deal and maybe also found that for you, house hacking on repeat is the better option for your path to financial freedom.

2 Votes

Quote from @Steven DeMarco:

Quote from @Bruce Woodruff:

Quote from @Steven DeMarco:

When I initially set these goals, I was still in the "bright-eyed, bushy tail" phase of envisioning my future REI portfolio. Yes, I had a goal with NET profit of $2K - $5K per month per STR.

Influencers and social media gurus make it seem like this is much more achievable than it actually is.

So very true! If nothing else, you have learned a ton with this first deal and maybe also found that for you, house hacking on repeat is the better option for your path to financial freedom.

0 Votes

Hey @Jorge F Rodriguez! An early welcome to Tampa to you! It sounds like you will need to sell unless you can find a way to increase your net operating income. The first thing that comes to mind is to rent by room or padsplit. I know that area is big for professionals and professional students such as med students. I would not keep it if you can't find a way to get the cashflow out of the negative.

As Randall mentioned above, you want to avoid capital gains tax by holding it for 2 years.

Not sure what your family situation is like, but if you sell, you may want to consider a house hack here in Tampa to start your RE journey. Let me know if you need any help navigating the Tampa Market.

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Orlando, Florida

@Jim Moore what is the duration of your loan?

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San Antonio, Texas

@David Ramirez when is the next one?

1 Vote

Miami, Florida

Quote from @Doug Smith:

The development loans usually max out at $3M per unit and $20M Dougexposure including the horizontal. $5M is usually single-shot new construction. We don't see many of those.

@Doug Smith I may need to pick your brain in the not too distant future. My hubby and I are trying to create a plan (and save) for commercial new construction investment here in Tampa. We are still uncertain on which asset class to choose. He owns his own commercial GC company here in Tampa and I’m a realtor. Trying to put our heads together to figure out the best path forward. We certainly have time, because we are far from having the capital it takes for such a project.

1 Vote

Fort Lauderdale, Florida

I sent you a few properties that might work. I will keep them coming!

1 Vote

Tampa, Florida

Quote from @Lara Di Girolamo:

Hi there, I'm considering starting my fix and flip business with a first property in Tampa. How is the market currently? Is there anyone operating in the area who can tell me if it's a good time to buy? Thank you! :)

The hardest part about flipping in Tampa is the higher cost to enter the game here. Do you have your team in place? $ or lender, real estate agent, GC, etc?

0 Votes

Tampa, Florida

All Forum Posts by: Alacia Mahnken

Alacia Mahnken has started 1 posts and replied 33 times.

Post: Looking for a GC

Post: Almost 2 years in and haven't made any money (via cashflow)

Post: Almost 2 years in and haven't made any money (via cashflow)

Post: Almost 2 years in and haven't made any money (via cashflow)

Post: Renting vs Selling

Post: Brand New Construction 4plex w/ 5% interest rate

Post: Networking to finance single family rehabs in South Florida

Post: Best lender for building loan

Post: Looking for a flip Tampa Bay

Post: New at fix and flipping