All Forum Posts by: Brad Gibson

Quote from @Anthony Cortello:

Quote from @Brad Gibson:

I just converted a 2/1.5 townhome that has been a LTR for the last five years or so in my portfolio.

Renovated the place including kitchen, bathrooms, flooring, paint, & fixtures, cabinets, countertops, etc.  Re-did the unit with an eye toward traveling medical professionals. Upscale furnishings, great beds, high speed internet, flat screen TVs, etc. 

Great neighborhood. B+ to A. Super quiet. Very safe. Next to one medical facility and within 10 minute drive to two additional medical facilities. Unemployment rate in the market is less than 2.8% and falling. 

Before the conversion, I could get , $1,600-$1,700 for the place unfurnished and with no utilities paid by landlord. 

Placed the unit in service a couple of weeks ago. Furnished finder. Zillow, Trulia, Hotpads. Had it placed on the MLS as well.

It is competitively priced $2475. That’s $25 less than other units of comparable size and makeup. Same neighborhood. My unit is objectively higher quality in furnishings, style, & finishes. I figured we would start lower and build a quality rep & a book of former customers for repeat business. 

No bites in two consecutive weeks. No inquiries. No showings. No matches in furnished finder. 

Reduced the listing price to $2,350 today.  We will see what happens over the next couple of weeks. 

This is in no way close to the double or triple revenue above the rate for this unit as an LTR that has been cited as pretty standard return on forums and podcasts about MTR’s. 

Any lower and I’d run the risk of being upside down when someone runs the HVAC at 50 degrees during the Texas summer versus what I’d make off of an LTR. 

Need some advice or suggestions. Either this MTR thing is horse **** or I must be doing something wrong. 

 Great question, I'm having the same challenges. 

I may be proven wrong and everything just picks up, but I get the sense that the MTR strategy had a season and it is past or at the very least it is waning. 

It's either that or the strategy just isn't a winner in a broad sense across many American markets. Buy & hold rentals works across the nation. Better in some areas than others, but it works. BRRR was a very broad winning strategy. Again, better in some than others, but still a winner. Fix & flip is a broad winner across just about every single market. Margins are better in some than others.

It just seems this may not be a broad winner and was overhyped among the various real estate investing communities. 

Quote from @Scott Mac:

Maybe the movers from your hospital are not making much or have other reasons for wanting cheaper digs.

Do you have a mini-bar in there.. a lot of the doc's I've known like to enjoy a cocktail or two.

Maybe there are not many customers for you offering at your hospital--have you checked that?

And you win the Texas Title of the Day Award...(Just hold onto that Hogleg--we don't need no shoot-en' round here)... https://www.youtube.com/watch?v=NkFmlUcpfnM

There has been a trend for medical professionals to start bringing trailers or fifth wheels with them to save on lodging, but not all. 

Of the professional staff at the hospital, about 1/3 are travelers, so the numbers should be there. 

We’ve got some complimentary wines from the Llano Estecado wineries. Do you think I should stock with hard liquor?  Maybe some 4 Roses or Tito’s?

Quote from @Bonnie Low:

Quote from @Brad Gibson:

Quote from @Bonnie Low:

Sorry to hear this unit is working out for you. I don't personally see hosts making 2-3x if your guest avatar is traveling medical professionals. Mine rents for 1.5-1.75x max the LTR rate. There was a time during COVID when the demand for travel nurses was so high they were getting exorbitant per diem rates and hosts were jacking up their rents accordingly but those days are long gone. In fact, they tend to be on the lower end of the spectrum. Your higher end returns are in the insurance placement or corporate rentals. Where did you do your research before making this decision? Maybe look into the insurance placement option for your property, though from what I know the sweet spot for insurance placements is 3 bed 2 bath single family homes and above.

30 Day Stay was our guide to get started along with a few Bigger Pocket podcasts that espoused the virtues of MTR’s. 

The prevailing sentiment is the returns were on 1/1 and 2/1’s. Close to medical centers. Well appointed. Black out curtains. Safe for single females. Etc. 

West Texas is an oilfield town. Lots of itinerant workers in that industry. But roughnecks tend to be VERY hard on furnishings and housing units. Think college frat boys with lots of money and heavy equipment. 

 That is quite a different niche, indeed. But there's still demand for it! Sounds like you're maybe your property and the prevailing tenant type are just not compatible. Is there anything you can do to make your property appeal to those roughnecks and oil field workers? 

Sure. We would go with the same type of setup as our college town housing in Lubbock. Hard surfaces everywhere. Heavy duty stuff that is inexpensive & basically just hose the place down in between tenants. 

Just more money to convert style. Wanted to try everything we could before abandoning. 

Quote from @Bonnie Low:

Sorry to hear this unit is working out for you. I don't personally see hosts making 2-3x if your guest avatar is traveling medical professionals. Mine rents for 1.5-1.75x max the LTR rate. There was a time during COVID when the demand for travel nurses was so high they were getting exorbitant per diem rates and hosts were jacking up their rents accordingly but those days are long gone. In fact, they tend to be on the lower end of the spectrum. Your higher end returns are in the insurance placement or corporate rentals. Where did you do your research before making this decision? Maybe look into the insurance placement option for your property, though from what I know the sweet spot for insurance placements is 3 bed 2 bath single family homes and above.

30 Day Stay was our guide to get started along with a few Bigger Pocket podcasts that espoused the virtues of MTR’s. 

The prevailing sentiment is the returns were on 1/1 and 2/1’s. Close to medical centers. Well appointed. Black out curtains. Safe for single females. Etc. 

West Texas is an oilfield town. Lots of itinerant workers in that industry. But roughnecks tend to be VERY hard on furnishings and housing units. Think college frat boys with lots of money and heavy equipment. 

Quote from @Jamie Banks:

I'm sorry that you've had some difficulties getting your unit rented. It seems like you're doing everything right but with MTRs sometimes listing on OTAs isn't enough unfortunately. Have you reached out to local colleges, hospitals, or corporations to let them know that you're a housing provider in the area? Also, networking with realtors is a great way to get leads. If you're still having trouble feel free to reach out to me. I am a MTR property manager and I offer guest placement services. 

 My wife is a nurse prac in the local ER, so she has contacts with the agencies placing professionals.  I’m not sure she is as aggressive in networking as I would be. Plus any leads gleaned there seem to want the “friends & family” discount. Basically, something for nothing.

I’m almost to the point of trolling local extended stay hotels for work trucks and calling their offices to let them know we could save them $$ on housing costs. 

I have a network of realtors that I work with in the fix & flip as well as BRRRR strategies. In my market, most of those guys aren't that interested in rental stuff. They consider it small potatoes compared to the "bigger prize" of listing and sales commissions.

Quote from @Colleen F.:

@Brad Gibson  Look for a travel nurse or health care worker facebook group named after your city or the nearest local city. The facebook groups are generally free to post.  You can post on the travel nurse housing/ FF one putting either pics or your listing. If you put a listing sometimes there is feedback from travelers. Some of them though want  something for nothing so take it from the source. 

Issues you could have are a high deposit or upfront cost or some don't want to do a background/ credit check if you require that. Some do waive the background. Some credit it against rent if they take the unit. I run the license on the state Database but right now I am renting a room and so the roommate will get them out if they are a problem. 

Furnished finder group https://www.facebook.com/group... and Nomadic nursing too. You aren't going to do as well with MTR as STR. You could do VRBO whose fees I don't think are as high as Airbnb but I haven't heard of health care workers looking there.

I would put a limiting thermostat on the AC too.

Thanks for the response & some great ideas. 

I find it odd that people wouldn’t want to do a credit and background check. It is a significant risk for a landlord above even a LTR considering the expense of quality furnishings and short nature of the stays. 

I will make the thermostat change. Great call. 

I guess I’ll start exploring Airbnb. 

Quote from @Colleen F.:

@Brad Gibson  did you post it on the travel healthcare facebook groups? Does it have laundry?   Did you look at unmatched leads in FF.  Some people have better luck using airbnb.  I have heard some areas travel contracts are falling off but I haven't heard anything about TX.

Thanks for the response. Yes, the townhome has an in-unit stackable washer/dryer. Less than a year old. 

I’ve reached out to every unmatched lead in FF. They were looking for 1 BR for less than $1200 per month according to their post. I still tried with very professional emails. No responses. 

I’m not familiar with the facebook groups. 

I haven’t done Airbnb yet. I’ve heard the fees are high. I’m willing to give it a shot. 

I just converted a 2/1.5 townhome that has been a LTR for the last five years or so in my portfolio.

Renovated the place including kitchen, bathrooms, flooring, paint, & fixtures, cabinets, countertops, etc.  Re-did the unit with an eye toward traveling medical professionals. Upscale furnishings, great beds, high speed internet, flat screen TVs, etc. 

Great neighborhood. B+ to A. Super quiet. Very safe. Next to one medical facility and within 10 minute drive to two additional medical facilities. Unemployment rate in the market is less than 2.8% and falling. 

Before the conversion, I could get , $1,600-$1,700 for the place unfurnished and with no utilities paid by landlord. 

Placed the unit in service a couple of weeks ago. Furnished finder. Zillow, Trulia, Hotpads. Had it placed on the MLS as well.

It is competitively priced $2475. That’s $25 less than other units of comparable size and makeup. Same neighborhood. My unit is objectively higher quality in furnishings, style, & finishes. I figured we would start lower and build a quality rep & a book of former customers for repeat business. 

No bites in two consecutive weeks. No inquiries. No showings. No matches in furnished finder. 

Reduced the listing price to $2,350 today.  We will see what happens over the next couple of weeks. 

This is in no way close to the double or triple revenue above the rate for this unit as an LTR that has been cited as pretty standard return on forums and podcasts about MTR’s. 

Any lower and I’d run the risk of being upside down when someone runs the HVAC at 50 degrees during the Texas summer versus what I’d make off of an LTR. 

Need some advice or suggestions. Either this MTR thing is horse **** or I must be doing something wrong. 

I'm looking for a refi of a loan that isn't ideal for a medium term rental property that I have under contract.  Here's the information:

Price of Unit: $120,000

Working with a lender who has given the following terms: 25% down; 9.99% interest rate; No PPP; 30 year amortization, but a balloon payment of entire balance due at 5 year mark.  Pretty steep origination fees.  We are supposed to close later this week, but I'm skeptical since they haven't sent anything to title or gotten the file started.

Contract says we need to close by 02.28.2023.  I don't want to blow the deal up.  It'll cash flow as a medium term rental that is furnished.

Any ideas on who I might reach out to in order to either refinance after we get this one closed, or this could turn into a save situation where we need someone to get us across the finish line.

Additional facts:

This will be our 24th or 25th property with a mortgage. Experienced operator of rentals, fix & flips, & construction of SFRs. 840 credit last I checked. We can do a DSCR or something different if it gets a better rate & terms.

Thanks for any ideas in advance.

Quote from @Jay Hurst:

Quote from @Brad Gibson:

Just got a DSCR rate quote of 8.875% today as well. I don't think there is a pre-payment penalty. 20% down on a SFR. Rate sucks. Origination fees of $4101.

The deal is still a winner from a cash flow and cash on cash return, but damn.  Expensive loan.

 @that IS a very expensive loan. 

 What terms are you seeing for a similar type deal?