All Forum Posts by: Bob Wilson

Currently, my company has 46 homes in Chicagoland, all furnished. We rent them to companies, and they stay occupied. Monthly revenues are $220-250k, Profits are healthy (Site: www.leaseFHS.com).

I'd like to build 3 homes in TN, or SC (haven't finalized yet) same concept. Only difference, building versus buying (personal preference, long story). 

The project will be 3-4 mil. 

I can navigate the waters when discussing personal home loans, but when venturing into a commercial loan to develop/build homes, definitely not my space. 

What should we be thinking about, and where do we start?

Of course, we will be speaking to experts after we file our taxes in March, but I wanted to start with BP, so I can start mentally preparing.  

Thanks for reading, and super thanks for responding!

Sure 

Message me 

Generally speaking, I agree with @Luke Carl & @John Underwood. STR's (assuming AIRBNB style), is much more work and headache. But curious, why are you even considering a move?

I'm assuming something isn't working.

Is it you need better returns, or what exactly is motivating you to consider a switch after acquiring 60 units, and 60+ in age?

What’s that? 

@Jonathan Turner

Referring to both Jonathan. 

I personally like purchasing, for obvious reasons, however, it's also the main reason we've grown slow over 5 years. Takes about 100k (55-65k DP + 35k furniture/labor) investment to get one unit up, when purchasing. 

I'm new to arbitrage, but have 4 units like this now, as of 3 months ago. Colleague of mine who owns a rental company, has about 2,000 rental properties in Chgo, and earlier this year, he explained to me how he got SCREWED with the moratorium, and wanted to now diversify with our company. 20% rentals to us (over time), because we have more stable and consistent income (not to mention skin in the game), vs getting screwed by his tenants. He's watched us for 5-6 years though, so he has an inside view to the "system" we have in place.

So we tested the "arbitrage" concept, grabbed a couple of his units, put up the same 35k we were doing anyway, and went to work! My partner was all about it, he told me we should never buy again, lol. Owners take care of the major repairs, we get 3 year leases (stability), and still get $6,500-$7,500/monthly. Expenses are about $2,600-3,200 monthly, so we walk away with $3k-3,500 profits, per unit. 

A couple investors approached us, and asked if they could put up the 35k (furniture/labor) for monthly returns, so we structured a deal where we split the profits. They furnish it, we run it, and we split profits. $1,500-$1,900 to each side.

Why would we do that (earn way more when we invest by ourselves)? 

Simply because we grow our brand/market share twice as fast, that's it. Our goal now is to go national in 2023, so expanding the brand and dominance locally is step 1 to that path. Partnering with investors not only helps grow now, but establishes the trust and relationship over next 18 months, which is important because these same investors are who we are partnering with when we go national, they get first dibs on expanding to other states under their leadership/vision. 

So its a long term play for us.

View the video on my homepage first, which will save both of us much time in the back and forth, then respond with specific questions. 

I’ll answer them. 
www.leaseFHS.com

If you are challenging for the sake of “challenging”, save my time. I’m busy enough. 

If you are challenging because you want to join the party, then yes, I have no problem sharing the numbers, we can jump on a zoom call to talk business. 

In short, yes, it’s safer then AIRBNB, and the numbers are what I posted. 

@Ryan Genson welcome! I’m néw as well, well wishes! 

My opinion, don’t go Airbnb, corporate housing is way more secure and less problems with municipalities and neighbors.

35k investment generates $1,500-$1900 cash flow.

So with $100k, you can easily hit your $4500 mark. Message me for context and details. 

To start... of course! They are the leader nationally, only makes sense :)

But that's 1 of 10, and that industry is only 1 of 4 we target.

Our strategy keeps us 100% occupied, literally, across 17 units. We have folks lined up waiting on these units. Our last 5 properties, we didn't even have pictures, before we had a contract between $6,500-$7,500/monthly.

Folks look at the website, trust the brand, and reserve - period.

Don't get me wrong, it's WORK to advertise/market, chase contracts, and maintain these relationships, but the profits are ridiculous. We diversify though, can't have all your eggs in one basket, so even if 1 golden goose goes under, we wouldn't skip a beat.

When we come to Oregon or East coast, we have to do business my friend!

@Jay Hinrichs

It's amazing isn't it Jay!! When I tell folks this, they never believe it. Some are so short sighted on "traditional" real estate, they can't think for a moment about other opportunities.

I haven't found anything close with these type of 50-60% type returns.

And yes, the renter quality is soooo much better, it's a no brainer to us. Built a business off of it.

@Naomi Moore

5 years ago, not sure what I would have said.

Now, I live in a world where we invest 35k per home (furnishings) and generate $1,500-$1,900 monthly returns.

So to keep it simple, I would grab 100 homes for 3.5 mil, which would bring me 150k-190k/ monthly Net.

My world is corporate housing, which is rare.