All Forum Posts by: Bonnie Low

As others have mentioned, your first step should be to remove the watermarks. They're extremely distracting and make it difficult to really view the photos. Your content also reads like an MLS listing. Typically, travelers don't expect a description of the square footage of each room. The text just isn't a good fit for travel platforms - it definitely lends itself towards the MLS. You can use Chat GPT to update your content by asking it to write a property description in the style of other Furnished Finder or Airbnb listings using the information from your current description. Tell it to make it more "traveler friendly" and sound less like a real estate listing. Play around with it until you get it right. Is it possible to get your prior tenant to leave you a review? That will also help. For your cover photo, remove the bullet points about 3/2 and front porch. They can see easily that it's a 3/2 and your front porch isn't a great selling feature compared to the spacious backyard with outdoor living space so I'd lean into these amenities. I'd also highlight the fenced yard which is big for travelers with a dog. Good luck!

I don't see what you're describing as a mistake or having jumped too soon. I'd look at it like you're house hacking in a notoriously expensive market and your monthly rent is essentially the $1000 -$1100/month that you're coming out of pocket. I'd venture a guess you'd paying far more to rent a room or a house in the same neighborhood so not only are you getting super cheap "rent", you also have roommates who are paying down a significant portion of your mortgage. That's a win-win. There's a lot of idealism out there still and I think it clouds the realities of what investors are dealing with today. Sometimes real estate gurus and podcast guests talk about how much they're cash flowing on properties they bought 5-10 years ago when everything about the market was dramatically different but because they don't necessarily disclose that, it leaves the impression that you should be getting the same kinds of deals and cash flow today and usually not possible. So don't beat yourself up. It was a smart move. At some point you can probably purchase your next primary residence and do it all over again by fully renting out the DC and Baltimore properties as well as house hacking the next one if that's right for you. You're doing great!

Hi, Angie - it's not uncommon to ask for an entire month's rent up front as the deposit but that's very steep for a 30-day only rental and if they were to book a 30-day stay through one of the online platforms, they wouldn't be asked to give a deposit at all. So keeping all of that in mind, I'd consider reducing the deposit to half of the monthly rent. The deposit really just serves to safeguard you against a) cancellation and b) damage. If you're using a platform like Furnished Finder, they have partnered with Waivo to handle damage coverage so you might consider waiving the deposit all together and instead, utilizing a Waivo policy which will be less expensive all around and likely provide more coverage. As for utilizing the deposit should the guest cancel part way through their lease, check your state rules to make sure this is allowed before doing so. 

Hi, Dylan. I can help you with this. I'm both an investor who has flipped many properties and used the BRRRR model as well as being a lender. Here's what a lot of investors do. Acquire a property like the one you're looking at using a "fix & flip" loan product. I have a few funders I work with who have 90-100% fix & flip loan options. The fix & flip loan is usually short term (12-18 months) and higher interest rate. Once you've completed the rehab, you finance into a long term loan like a 30yr fixed DSCR loan product with a much lower interest rate. You may even be able to do a cash-out refi with your DSCR loan if you've forced enough value. This can be a good way to get into a purchase when you don't have a lot of capital. In most cases, you need good credit even if it's only one of the factors the lender considers. At a minimum, it will help you get a better interest rate and more leverage. So keep working on building your credit and try to get it up to the 700's as soon as you can. Having a W2 helps, but isn't necessarily required. Lenders also like to see experience so if you partner with someone who can bring the experience piece to the table, you're going to get much more favorable terms. Again, it's not an absolute - it's just helpful. Keep hustling to bring up your cash reserves. You're typically always going to have to bring closing costs to the table and may need cash reserves in the bank. All of these things will help get you closer to your goal.

If you want to talk through a potential deal, please reach out. I'm happy to look at your deal and help you strategize how best to go about it.

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 Hi, Allen - I'm glad you're getting good insights from the folks here. You have lots of seasoned investors at your fingertips just by being a member of BP. Yes, I am still a lender and would be happy to talk with you. Two things I want to caution you to look into when you do your due diligence in the Crestline/Lake Arrowhead areas. I don't know what the situation currently is with either of these topics, but they should definitely be on your radar:  1) insurance costs. Because of California's wildfires - and this is a wildfire prone area - speak to a couple of insurance agents before you buy to get accurate pricing built into your underwriting. This is absolutely critical. Ask if they're still insuring in these areas because lots of insurers are pulling out. And ask how much the YOY increases have been on average so you can build that into your pro forma. 2) look into the potable water supplies. What is the status of reservoirs in your area? Where is the drinking water coming from? Just a few years back there was a lot of concern in the Lake Arrowhead area around this issue, primarily because one of the world's largest bottled water brands has purchased the lion's share of water rights in this area. I don't know whether this has been resolved, but speak not only to the town council about this issue, but also check in with some local environmental organizations to better understand what the drinking water challenges may be before you buy. This is not meant to scare you - just to give you a better sense of what to include beyond the standard due diligence items. 

Use this link to set up a time to chat. I'm happy to support you and your family in this!

@Allen Ramirez you're asking great questions and you've gotten some spot-on advice from seasoned investors like @Dan H. who know your market very well. One particularly salient point he makes is "I want a market where my value add adds the most value." This is absolutely critical with a BRRRR and I say that from the perspective of a lender and an investor experienced with this model. It's true that it was MUCH easier to pull off the ultimate BRRRR strategy even 2-3 years ago. But between bloated asking prices, the increase of rehab costs and higher interest rates, it's much harder to do. That does not mean it's impossible, just harder. I've had to shift my thinking in 2 ways. 1) the "infinite return" whereby you get all your money back, plus cash flow, is less likely. But at the end of the day, I'm ok with that and here's why. I don't mind leaving 10-15% in a deal. I look at it like paying 10-15% down on an investment property and I can stomach that. 2) I have to force significant value into the property to ensure I get as much of my cash back as possible. It might seem this is easier to do in a cheap market, but as Dan points out, that's not always the case. You need to buy it right (almost never the listing price), you need to be confident in your rehab pricing and ARV, and you need to use the right financing tool that won't eat up your profits. These are the things that will safeguard your investment and allow your strategy to work for you.

Don't overlook the importance of having the right financing product to achieve your goals. When you build out your team, make sure you've got a lender on your roster. I say that both as a lender and an experienced investor. It's never too soon to create a relationship with a lender so that when the time comes to buy, you know you have a trusted partner in your lender. If you run across a lender who only wants to talk to you when you "have a deal", keep looking. A good lender is worth their weight in gold, just like a good Realtor and a good GC.

Best of luck to you and if I can help in any way, please reach out.

Dan, with your experience doing rehabs, I have a couple of loan options that would work in the above scenario if that's still a deal you or your son are looking at. Those numbers are really attractive, especially for San Diego!

Hi, Isaiah. I invest in Ohio, too. I have a couple of Realtors I can refer you to who I have personally worked with. I highly recommend @Tyler Everidge. I don't have any recommendations for an attorney, but I'm sure Tyler does. Also connect with @Patrick Drury who does a great job of working with investors. Both of these guys are my go-tos for all things Ohio. Also, I'm a lender working exclusively with investors. As an experienced investor myself I can help you with your analysis and underwriting. I'm happy to take a look at your projects any time. Just shoot me a message. Best of luck to you!

If you get a place in an area that allows 30+ day stays you may be able to appeal to the traveling medical professional (aka 'travel nurse') crowd when you're seeing guests. I say this because Florida has notoriously low travel nurse per diem rates so a lot of travelers won't take an assignment there because their rates are too low vs. most housing. That said, I see people all the time looking for less expensive options. So you could be on to something. Not everyone visiting the Orlando-Kissimmee area is going for Disney, though that is no doubt the main draw. You still have medical professionals, digital nomads, construction workers and other seasonal employees - all of whom could be looking for temporary furnished housing. If you're buying the property anyway for yourselves and aren't dependent on the revenue from guests, I'd go for it. I'd also list on the sites that cater more to this type of guest. Specifically, MiniStays and Furnished Finder. Good luck!