All Forum Posts by: Scott E.

Shoot me a message. Happy to help.

Since my projects typically run a year (or more) I'm looking at the total interest paid.

If 1 guy is charging 12% with no points, but the other group is charging 10% with 2 points, I'm going to pay roughly the same amount of interest in the end. In this case my preference is to go with the 12% lender who charges no points. Even better if they offer an interest reserve.

Neither should be stressful in my opinion. If your work is bringing you an immense amount of stress then you're in the wrong line of work.

I have done both and I'd much rather be a house flipper than a wholesaler. The responsibilities are vastly different. And yes there is more risk flipping houses. But I personally just don't have the skillsets or patience required to be a wholesaler full time.

As others have said, take the total cost of the project and run the numbers at about 80% LTC.

How this will work out in real life is the lender funds 60% of the purchase and 100% of the construction.

Happy to help any way I can... you can post questions here or send me a private message if you prefer.

I manage 4 STR's right now for owners out here. All single family homes, scattered around Tempe and Scottsdale.

3 of the 4 are performing decent but mediocre this season compared to last. The only property that is bringing in exceptional returns is the one where the owner went "over the top" with the interior design. Finishes are A+, the furnishings are A+. No Ikea, Walmart, or Home Depot junk in the house. It feels like you are walking into a model home, and the guests can tell the difference. Also helps that the location is about as good as you can get.

The STR market has become more competitive. There are a lot of really well done properties that have dominated the rankings on airbnb. Plus developers have brought literally thousands of new, quality hotel rooms to the market over the last couple of years. Scottsdale even has a Caesars now.

All that being said it's still possible to do well as a STR investors but you need to be willing to spend more on the right location, the right design, and the right furniture. And of course you need to be a great host :)

It all just depends on your location and your price point. I have put pools into every flip or new build I have done over the last 5 years (if there was not one there already). A pool in my market, particularly in the $750k+ price point, is an absolute must. Doesn't matter if your buyer is a first time home buyer, a family, a second home buyer, or a landlord buyer. You need a pool if you're going to be competitive with other homes in the market and if you're looking for top dollar.

So all that being said, I'd fix that pool up prior to putting the house on the market! But before you do, check with realtors selling homes in the area and get their feedback.

The other posters have given good feedback on how to determine value but I'll add my 2 cents...

Oddly enough, in situations like this where "the owner is willing to sell it very cheap" it's possible that the numbers won't pencil out even if they give you the property for free.

If it costs you $300,000 to develop the lot but it's only worth $275,000 in the end, it's not a deal.

You need to talk to some builders who have experience doing exactly what you plan to do here.

Interesting. What I think has made it really worthwhile for me is I am extremely particular about what properties I take on. I would never refer to my homes as "doors". I'm not targeting "doors". I'm targeting highly desirable properties, in A+ locations, with high cash flow potential, owned by real humans who are interested in getting a return better than they'd see if they were to go the long term rental route.

If you hand pick the right properties, in the right locations, that are finished and furnished the right way, you can bring in $100k per year as a boutique property manager with only 5 clients.

I'm not interested in rental arbitrage myself, but happy to hear you are having success with it.

If the camper is already on the property and already approved to be run as a STR, then it makes sense to keep running it as a STR through the "good" season to offset your expenses. People love those little vintage campers. I have some questions, shot you a private message.