All Forum Posts by: Caroline C.

I would be very concerned that they didn't really have the cash up front to handle the move, given that that I believe the laws in NJ are more tenant friendly if they continue to be a problem and an eviction is warranted eventually.  

Really, a surprise $750 bill makes or breaks if they can pay rent on time?  Why are they paying rent at their old place for July?  

This may very well be the first story of many of why they can't pay their rent on time - bank issue, health issue, pet issue, etc, etc, etc.  I would stand firm and charge the late fee - then they will be sure your rent is what gets paid before their other bills.

You are running a business...

There are a bunch of ways to achieve financial independence over the long term via real estate. You should definitely weigh vacation rental vs other methods. 

We recently added 3 AirBNB vacation rentals in Costa Rica to our investment portfolio, and my advice is to consider:

1 - all potential expenses (it is higher than you might think for AirBNB, depending on location, upscale or not, outside management, etc), especially start-up furnishing expenses

2 - high and low seasons because occupancy may not be consistent throughout the year.  For example, high season is Costa Rica is great, but there are definitely a few slow months during the course of the year with less occupancy. 

3 - competition can be fierce as some markets are saturated with rentals, and reviews are important to getting bookings and it takes time to build reviews

You are definitely in the right place for learning more - good luck!

I think it is important to see the markets you are interested in firsthand, and see the neighborhoods where the deals are, and meet realtors or wholesalers or REIA groups in the markets.

Columbus and Indianapolis aren't too far from each other, so you can easily see both in a 2-day trip.  In fact, when we visit Indy to see my investments, we often drive from New York and spend the night in Columbus. Since you are already familiar with Chattanooga, it is less important to visit there.

Then based on how you feel about seeing the markets, and the contacts you've connected with, make your market decision.  I'm sure you can find good deals in any of those markets, and also make bad purchasing decisions.  More important than which market, is finding a partner you can trust.

@Matthew Dreiling Buying TK is a shortcut, and I think best for people with zero knowledge, or for experienced investors looking to quickly expand their portfolio, but given that you have a degree in Real Estate, I would think you can do better on your own.  Vetting the TK partner is a job in itself, and it will surprise you how much it can tend to not be hands off.  

It's not necessarily a bad idea to go out of state on your first investment, especially given the number of markets within easy access of Atl. It would be a different story if you lived in California or New York, given the real estate prices nearby to those metros, but in the southeast you have many more options. I say look at some nearby markets in SC or AL, join up with some REIA's, find a realtor you can trust, and let that person help you go from there.

We use Remotelock as well - as previously mentioned they charge $.99 per lock per month but to pay annually it is $10.68.  Not sure how much you are paying each month for your locks, but I see it is as a small price to pay to use their online portal to be able to remotely set/remove codes.

Pick a market first so you can focus all your efforts.  Give it some time and them move to another market if the first one doesn't prove promising, rather than focus on several at once.

I've managed to network via friends, friends of friends, or work acquaintances into a trusted realtor in my chosen market who could jump start things. But that aside, I agree with the previous suggestion that joining a local REIA is the way to go - take a trip there around a REIA meeting - it's the best way to meet people and get introductions. You'll meet people here on BP, but you have to filter out those that are just trying to sell / market themselves.

For us, the key to purchasing out of market for rehab and rent was to find a good local realtor in the market.

That person would show us properties or listings, facilitate the purchase process, coordinate quotes for repairs, and recommend property management.  Then over time we would expand the local team on our own once getting things off the ground.  It has worked well for us as we have purchased 9 properties in 3 markets over the last 12 years this way.  It does require some patience.

Important to note that we've only bought properties that needed light rehabs, so if you are looking for equity by doing big rehabs, maybe realtor as center won't work as well. In that case, I'd recommend picking a market or 2 (tops), then sign up with their REIA's, and schedule a visit to the market around REIA meetings to make connections. You'll find people willing to help you this way if you ask for it.

I still think realtor is key if you are out of market.  If location isn't a big deal to you, I would tell everyone you know (friends, family, coworkers) that you are thinking about buying real estate and you are looking for a market and a realtor in that market, and perhaps you'll be surprised and get a good lead.  We've gotten 3 realtor leads this way, and sometimes from unexpected places.

You are right to be concerned and approach cautiously.  Your research should include visiting markets and visiting with providers to see firsthand the quality of their work and the types of streets where their investments are located.  Then it becomes more clear which providers you can trust over others.

Exit strategy will depend on the type of house you invest in.  If lower price/rent point, then your exit will likely need to be to another investor, which could be a challenge in a downturn.  If you hold for long term it is less of a concern of course.  You can also buy at a higher price point but at a lower monthly cash flow to widen your pool of buyers if you need to sell.

The TK provider doesn't hold the properties themselves because really they are operating as a flipper - they make money on every transaction by marking up the purchase cost and the renovation, and they also borrow the money for the holding costs while they are renovating.  They probably hold some back for themselves but don't have the money to hold all of them and don't want to tie up all their capital or have so many long term loans.

Assuming A & B are both in NYC I'd think it is more valuable to get B up to 2-family so you can get income from A & B.  Then once you can get the equity out of B, look to make more investments.  That also gives you the time to learn more about the Jacksonville and Orlando markets (if needed) for when you are ready to buy.

How much to fix B and how much does B get today in rent and how much more will you be able to get for it when fixed?  I think it is better to have 3 cash-flowing properties and then use the cash flow on those properties to make repairs, but of course it depends on many variables we don't have information on.