All Forum Posts by: Brian Wilson

John,

Sorry if my wording was unclear I'm not trying to qualify for property C with projected income from property C, instead properties A & B. Let's say I already have 2 STR's. How long before I'm able to qualify a 2nd home loan utilizing rental income from properties A & B. I know with LTR's it's 2 years and can be discounted at 75%. I'm just having a hard time finding any info on the STR rental income being counted toward reducing DTI. Probably should have worded that differently in the OP.

Thanks for the feedback!

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Lakewood, Colorado

My understanding is that when purchasing a STR property using a 10% second home loan, you can't use potential STR revenue to qualify for the loan.

If this understanding is true, does your revenue count towards reducing DTI when you are pursuing additional 10% second home loans in different markets?

Second question, what qualifies as a different market? Is it a certain mileage separation (over 50 miles)? Or state based.

Thanks everyone!

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Lakewood, Colorado

@Alex Turner I apologize if I was unclear, you mentioned wanting to invest in RE. So I was curious if you had a specific approach in mind SFH, Small Multi, STR. Being a MLO you've interacted with a variety of investors so you likely have some idea of what makes sense to you or doesn't. If not no worries!

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Denver, Colorado

Hi Alex, welcome to BP!

I'm relocating to Brighton, CO this year (fiancé lives there) and will be shifting markets and starting to buy in Thornton and Westminster. Do you have an investing strategy in mind already?

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Denver, Colorado

Quote from @Tom Wagner:

When you RBTR you are implicitly taking a more hands-on approach in order to juice cash flow and generate a larger return, so if the 4.5% cap rate you mention is the RBTR cap rate then the "true" cap rate is likely closer to 4%. As conventional interest rates push past 4% (or even 4.5% if you're planning to do a 3.5% FHA loan + 1% MIP), it will become clear when you run the numbers in detail that this strategy is risky.

However, I still think it is worth pursuing overall. I would just encourage you to aim a bit higher with your entry cap, perhaps 4.75%+ longterm and 5.25%+ when RBTR.

Good luck!

Tom,

The 4.5% Cap is just what I've gleamed from an investor/agent in the area and was seeking additional opinions/insights. Ideally I want a higher return (6-8 cap). Coming from the Midwest. However, a stronger market like CO is worth a lower return (5-6 cap) in my opinion.

Thank you for some metrics to target.

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Quote from @Erik Checkur:

Quote from @Brian Wilson:

I've narrowed down my locations to the Thornton & Westminster area of Colorado for rent by the room (RBTR) SFH's. Does anyone here actively invest in these types of properties with the RBTR strategy in Colorado or my selected markets?

I'm wondering what a reasonable Net CoC is. I've heard cap rates of 4.5%, which gives me something to work with. Anyone willing to share what they have found within the last year to be attainable, that would be fantastic. Or any insights/thoughts on this strategy in CO or the markets in question. Trying to develop my excel sheets for deal analysis as I make my market shifts (coming from the Midwest where 1% still works).

Thanks Everyone!

So what we’ve seen out here with how quickly the market is appreciating, sometimes the rental market can’t keep up. The average last year for house hacking was about $700 or so per bedroom. You could probably push $800 depending on your area. So it’s possible but people are finding it hard to actually make a profit, lately it’s been a lot of people breaking even or living very cheap (considering the area I’m assuming you plan on occupying a room so you can owner occupy the home). I do have a buddy who has done very well with the house hacking in the Lakewood area. But if you need anything else or have any other specific questions, I’ll send you a personal message with some details.

Erik,

I'm currently looking at both options. I have a place in Brighton that I can stay at. I'm evaluating the market as it currently sits. I would like to buy and either rent by the room to provide affordable housing if this is profitable or rent the property outright. My understanding is that in the CO market, RBTR is going to yield a higher revenue (more hands on/more risk) than a traditional SFR would. Unless you're saying the rental market is just unable to keep up at all?

I'm not opposed to low CF deals as I'm also looking at STR for more short term CF solutions, but I would just slow down my CO accumulation schedule.

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Thanks Everyone!

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I second @Jay Hinrichs . The Midwest will always be a shopping market for East and West coast money that wants better short term cashflow out of their LTR's in the residential side.

Could legislation come down the pipeline that makes OOS investors have a harder time? Sure, but it would likely impact all investors.

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Indianapolis, Indiana

Hey everyone just wanted to give an update. I am not insane. My girlfriend that’s lived in rural areas all her life flew out from Colorado this week.

Well last night she was able to hear and feel it in the floor. Her initial thoughts was “this isn’t a mouse”, which are mine too. So we called her parents that are Ranchers and have been dealing with this for over 50 years. Their initial thoughts are “rats”. Rats are territorial and aggressive, while mice and rats don’t typically live in the same home it does happen. Their suggestion was to do 2 things. Fly bait and coke in each basement in a flat pan. The second was to get a 1/2 handheld exploratory scope camera. I can drill 1/2” holes in areas I’m hearing them on the side that still needs to be renovated and then poke the camera down in.

I’m not sure if their right or if this will solve the problem but we’re going to try!

At the very least we now know that I’m not insane and hallucinating so I guess that’s a positive?

Thank you all for your input and feedback so far. Will update as things progress.

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Originally posted by @Jim K.:

Originally posted by @Brian Wilson:

Originally posted by @Jim K.:

Originally posted by @Brian Wilson:

Originally posted by @Genny Li:

"The really weird thing is no matter what room I’m in they come and start scratching the floor any time I’m kneeling down or putting a lot of pressure in one spot."

That isn't happening. Either you're hearing floor squeak as scratching, or you're having hallucinations. I've been on home boards for 20 years now, and there have been 3 or 4 times that people have come in about scratching pest noises that follow them, and in every case, that person has been hallucinating, and in some cases, it's progressed to a clear psychotic break, going from "there are mice I can't get rid of" to "the government/my ex husband is sending in spy mice to get me."

If there aren't signs of a pest being there, bring in someone else. If they can't hear it when you do, the sound is not there. If the sound only happens when you're alone, it's not there. There are actually a lot of functional people who suffer from hallucinations. The key is knowing that they're hallucinations and getting treatment.

I appreciate where you are coming from. I’m pretty in touch with my mental health, these are not hallucinations. For the first time in a long time I caught a mouse this afternoon. So I thought “is this the last one?” Go and kneel in random places. Sure enough scratching/biting at where ever I’m putting the most pressure. Also these aren’t things I’m just hearing, you can feel it. The vibrations in the floors allow it to travel quite easily. I’m thinking (hoping) activity will pick up until I get them all now that all exclusion work has been completed.

This is exactly what someone who is imagining their presence would say. You don't feel rats or mice like that, underfoot in response to pressure. You hear them walking around in the dark, as you lay still. You hear them gnawing at things.

Incidentally, "The Rats in the Wall" by HP Lovecraft is an awesome short story.

I can see how you would receive my post this way. I can only hear them in the walls in 3 places. They have chewed one of my dressers up pretty good at the base in one spot. That’s how I realized they were getting in my bedroom. I haven’t heard them in the ceilings so I have no indications they are up there. But I pulled all the basement insulation on both sides and it was pretty bad. 4-6 spots that were obvious nests more sections filled with droppings.

As for the floor thing, that’s why it’s so weird and doesn’t make sense. As mice by nature are skiddish. I did catch a Vol on one of my traps they had wandered in. So there’s that possibility.

I have some family friends coming by to check on the scratching in the floor and confirm what I’m hearing. It’s possible I’m imagining it, just not likely.

Just to be clear, Brian, I have no clue if you have rodents in place, and clearly you have physical evidence that you do. I only commented on your method of detection.

I am completely unwilling to pretend I have any medical qualifications, and I'm sorry some people here think they do. I fix old houses, that's about it.

No Jim, you’re fine and honestly I’ve been racking my brain because I’m a logic driven person. I’m a construction manager by trade. While I don’t do residential builds I understand that industry standards exist. Like that there shouldn’t be a void large enough for some rodent to fit between the decking and the sub flooring/lvp. But the physical evidence is pointing to it.

Again, no harm no foul. I thought your post was insightful and genuine. My more pointed response was directed at the one response in particular that provided no real value add to the conversation.

I will update this thread as I find more mice. Only caught one yesterday. But they may be starting to become more active now that exclusion work has been completed and food sources dry up.

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All Forum Posts by: Brian Wilson

Brian Wilson has started 15 posts and replied 184 times.

Post: DTI - 10% Down Payment Strategy

Post: DTI - 10% Down Payment Strategy

Post: New Member Introduction

Post: New Member Introduction

Post: Colorado - Rent by the Room

Post: Colorado - Rent by the Room

Post: Colorado - Rent by the Room

Post: Indy officials taking notice of OOS investors

Post: Mice Under Flooring - Need input

Post: Mice Under Flooring - Need input