All Forum Posts by: Andrew Shelton

Sorry, I didn't @ you guys haha. 

@Account Closed

@William Beck

Hi @Dan Portka, yes that is correct. Right now, we're looking for up to 5 units if you know anyone that might be interested!

Mike, they were already outfitted as STRs. We bought the properties, received the Airbnb pics from the previous owners and then the day of closing we had them listed on our Airbnb getting new bookings!

William, absolutely! We feel very blessed to have gotten in when we did. 

Investment Info:

Condo buy & hold investment in Gatlinburg.

My wife and I bought our first investment property in Gatlinburg, TN in March 2020. This year in January, we purchased our second - which happened to be directly next door to our initial investment. We have been netting an average of $2500/ month from each unit on Airbnb/ VRBO

What made you interested in investing in this type of deal?

After hearing several podcasts related to short term rentals, we investigated the best areas in the country to purchase them and landed on a few with Gatlinburg being the one that suited our price range.

How did you find this deal and how did you negotiate it?

I found both of these deals on Trulia and put in backup offers (very competitive market) with the sellers personally. In each case, the financing fell through for the initial buyer and we were chosen to pick up the deal.

How did you finance this deal?

Traditional financing using 10 and 25% down respectively.

How did you add value to the deal?

I included an escalation clause in our first deal and wound up having to pay an extra $15K out of pocket. In doing so, we satisfied the seller's ideal sale price.

What was the outcome?

Both properties have appreciated dramatically and our cash flow from the first deal alone has nearly paid off our original down payment. When we decided to do a Cashout Refi, we'll be able to pull out all of our initial investments and a little more to roll over into more deals.

Lessons learned? Challenges?

In both scenarios we had to really work hard to save additional money to make the deals work. The first was very scary having to come out of pocket an extra $15K, but it worked out really well in the end. For the second deal, we had to come up with an additional $7K for reserves in a month, which meant I was working at my hospital 6-7 days a week 12 hour shifts so we could satisfy the requirements of the bank.

My wife and I are looking to pick up properties in the Los Angeles area to add to our short term rental portfolio. We will sign year or longer leases and renew yearly as long as the property is profitable.

Pros:

1) Maintain perfect occupancy - we will sign up to 3 year leases and renew so you will never have to worry about expensive turnovers.

2) Your home will be kept in perfect, move-in ready condition at all times, so if you ever decide to sell there will be no need for additional cleaning or repairs.

3) No worries over small maintenance issues - we will take care of all small maintenance issues such as general plumbing problems, lighting, etc., so we will be the easiest tenants you have

4) We monitor our properties using Ring Doorbell and Minut noise monitoring software to make sure your property is safe and secure.

Cons:

1) You may get too comfortable receiving monthly rent checks without any hassle and catch a sunburn while you're sipping your Daiquiri on a tropical beach somewhere.

If interested in partnership, send me a PM!

Andrew

@Jackson Andrews

I live in California currently and my wife and I talk about leaving regularly. I work in the medical field and I’ve spoken with several members of the medical community who are considering leaving for various reasons. What I anticipate happening, especially after the eviction moratorium is lifted, is that our homeless population will further increase, and as our laws become more and more lax, the homeless population will overrun more and more suburbs making it less desirable to live in any part of LA. The tent cities are already completely out of control in the central part of LA and they grow wider every day. Couple that with the fact that wildfires and earthquakes are becoming more frequent and the fact that the cost of housing has not responded at all to all of those issues and you can see why so many are eager to leave. It will be a very interesting year next year. I’m not buying anything in CA for the short term.

@Eric James you’re right about that. I’ve tried to keep things as modest as possible - haven’t bought any new cars or kept credit card debt, etc. The struggle you mentioned is what I go back and forth between constantly. To steal a quote from “The Richest Man in Babylon” - “You do eat the children of your savings. Then how do you expect them to work for you?”

What would you do in my situation?

Thank you all for your feedback. I just submitted my loan app so we'll see what happens from here!

 @Mark H. Porter I do need to create firm numbers for how I want to achieve financial independence. That is something I'll prioritize over the next couple of days for sure.

@George Pauley You and I have very similar mindsets. Our STR is going to average us about $1200/month net based on current projections (praying that Corona doesn't halt progress) so we have technically already covered the additional expense, but I included that in our monthly savings calculation already. I was hoping to be able to utilize a HELOC in a few years to pick up another property or perhaps start BRRRRing. What are your thoughts on that strategy?

@Jamie O'Brien I love that area - that's home! I'll always consider investing there, especially the Birmingham area. I will say I have a little more interest in Huntsville at this point, but I am open to any good opportunities! Let me know if you'd ever like to team up!

Hello BP community! I need some advice on how to move forward with my wife and I's real estate goal which is to attain financial independence and be able to travel the world at our leisure and also be able to go visit my family in Alabama as often as we would like. I am currently working full time as a RN in Los Angeles and I pick up at least two extra shifts/ month. We currently live in an apartment that costs us $1775/ month, but it's getting a little cramped for us as space is running out. All of our current monthly expenses and budgeted expenses cost us somewhere in the neighborhood of $3500/ month. We purchased our first property this year that we are using as a STR out of state. With my work and our rental income we are able to comfortably put away about $5K/month. We have about $50K in the bank. We took a look at a 2B/2BA condo yesterday that is going for $365K in LA but we are considering living in it. This would greatly improve our space issue and allow us to more comfortably have guests, such as out of state relatives (I grew up in Alabama and miss my family often) come visit. BUT, it would cost about $24K with a FHA to get in the door and make some minor repairs AND it would increase our monthly debt burden by approximately $700 / month. So, my question is, knowing my goal of being financially independent and understanding the situation what would you suggest I do? Should we buy the property to improve our living situation and start to build equity? Or hold off for a little while and continue to focus on adding to our portfolio? Thanks in advance!