All Forum Posts by: Brad Sicoli

I love section 8 for many reasons but I view it a bit differently. For me it is simply a lead generator and I’m open minded to renting a vacancy to a cash renter, s8, or other housing assistance non-profit. Also, any unit can be s8 whether it’s in a bad area or not. I think generally s8 is in bad areas because cash renters are less interested in those areas generally. When I have vacancy issues, I turn to s8. Who cares how the rent is paid as long as it’s paid and as long as the application is good. Credit score is the #1 factor and plenty of good clean tenants on s8 have good credit or no credit (which could be good or bad). I would not go in with a marketing strategy of section 8 tenants only. My tenants are about 80% cash, 10% s8, and 10% other housing assistance. 

Here’s what I got:

$50k in Roth contributions. $65k total in Roth. I’d like to buy a duplex for $100k. Unit 1 was recently leased for $500 per mo and I’m sure I can get at least $550. Unit 1 appears to be in good condition. Unit 2 needs conservatively $30k in improvements. Unit 2 is basically 2 empty but heated rooms. I would need to put in a bathroom, kitchen and walls for at least a bathroom. Not interested in doing it myself.

Could I use $20k from my Roth for the down payment and up to $30k of my Roth contributions for the improvements? I think this is a home run, what are y’alls thoughts.

It’s a C neighborhood and I own a 3plex nearby that rents for $815 per month for 2 bed 1 bath. Not super close to big employers but it’s by a major road and a half mile from a big high school. Blue color, stable area.

I just think it’s a good time to use my Roth to get out of stocks and into real estate. Low interest rates and an over heated stock market.

@Eric C. @Eric C. @Eric C. Wow, where do I begin? 1) we absolutely can compare Airbnb’s to hotels. If we are talking about what’s best for locals then hell yes strs are way Way better than hotels. There is a cheap motel a half mile away from me and the cops are always there. I am (and Airbnb/vrbo in general) is way better at limiting crime and benefiting the citizens of my city than hotels. 2) are my “assumptions” wrong. I have a vacation rental and you don’t. You are telling me that my experiences are assumptions? I brushed my teeth this morning, is that an assumption? Based on me cleaning my own property for the first 6 months, seeing what ppl leave and based on what guests tell me, yes I assume they spend money even more locally than if they stayed at a hotel. Don’t tell me my experiences are assumptions. I “assume” you are not an expert on this matter but you are still in favor of regulating me! 3) the question is not about legality, it’s about what’s the law should be. The law should be: what’s best for the people? I am illustrating that strs are good for all the parties involved including a third party that is often disregarded in these discussions: the cleaners and other professionals I employ. 4) again, you clearly do not own a str and yes, you made up that number. They #1 thing guests search by are by review and some guests can be very fickle. They’ve even gotten mad at me for problems they cause. There is an element of customer service that you need to be careful of. You may be able to get by renting a 4 star rating hotel, but with strs, customers don’t know what to expect so they are trusting reviews a lot more. 80%? Try 98%. 5) it seems that you are conceding my point but you are saying it still doesn’t matter because we need to regulate every industry. I pay my taxes (more reliably than my neighbors). Regulating me out of business will hurt the community. By the way: my roi, or success, or failure is none of your business if I’m not hurting anybody. I took a sober risk when investing and yes, part of that risk is gov regulation. That remains my #1 biggest risk but it is based on people fearing a new industry. That’s it: fear. People always fear new industries abd successful market dIsruptors and look to the gov to regulate their fears away. Strs are not destroying your community they are enriching it. Live and let live!

@Fatima Champagne Whether or not a unit is vacant is irrelevant. When you go under contract ask the seller if any of the tenants have been a problem. In my experIence they have offered honest feedback and they even offered to evict them for me before closIng. Also, “owner occupied” is a requirement for primary residence mortgage for 2-4 units. It is something you tell an underwriter. After the loan closes, you know, live where you want...

@Aditya Maini I think a mortgage bank would be your partner in the deal and underwrite it independently. They would also give you a lower interest rate than a personal loan

@Robert B. So if Airbnb’s increase rent prices, you are concluding that is a bad thing? Frankly I think that’s a good thing! It means more commerce is taking place in that community and people are making more and therefore can afford more rent. I don’t need an empirical study to figure that out.

@Mary Mitchell You gotta be kidding me! Here’s how str’s are GOOD for their neighbors and commuties: 1) as a str owner on both aIrbnb and vrbo I review my guests. Hotels can’t do that. If my guest has a bad reputation I can and have rejected them 2) when guests stay at my place they spend their money hyper locally, benefiting the businesses nearby. 3) I hire many professionals to maintain my property, most notably a cleaner i pay about $1000 per month and is a neighbor of mine. 4) my vacation rental will never be the eyesore on the block. As a thriving investment it is imperative that I maintain a professional clean appearance. Property values benefit from that. 5) and oh yeah, THE CONSUMER benefits. People want a different kind of vancation experience that isn’t the same old hotel. Despite all the taxes and regulations and hotel lobbyists the demand still exists.

@Curtis H. Rooms to go is a competitor of ours so I’d hate to recommend them but they might be perfect for your situation. We are not in Atlanta

@Curtis H. I would go to a large furniture store and tell them you want to buy a lot of floor models and have it delivered in 2 days. Ask for discounts. I manage a furniture store in Washington, every large furniture store has at least 2 or 3 rooms in each department that they need to liquidate. Obviously floor models are in stock. I would also try to stay away from particle board like ikea. You are out of state and furniture repair will cost you more in the long run. Pay a little extra for something decent, get a deal on it because it’s a floor model, and pay for the delivery and set up. Most stores can deliver in 2-3 days.

@Nancy Bachety, 

I do not show the address until after booking and you are right, the front of the house should have been removed from my listing.  i'll never know if that would have made a difference.  

@Lee Bell, I appreciate your metaphor.  the prop manager "lives" in the garage if you want to call it that.  I can say he doesn't pay me rent and it's not being resided in by anybody.  Hopefully if I play nice they wont make me demolish the kitchen and bathroom in there.  

@Matt Shields, I know why they are targeting me, it's just not fair.  Life isn't fair and the day of reckoning has come.  indeed the converted garage was not considered during the appraisal when I bought the home last year.  I'm not worried about my insurance, especially if my pm is the only one there and i'll probably be selling soon.

regardless, I am beginning to realize that this cant go on forever.  Thank you all for your candid advice.  I think i'll try convince the authorities to let the people stay who have already made plans for the holidays, then sell it.  like you said nancy, at least I've had appreciation.

Thank you,

brad