All Forum Posts by: Chad McMahan

Hi. I just went through fixing up my rental that had about 10K damage from previous renters ( in a B neighborhood) in Houston. This is my only property and it is the house I raised my kids in in a nice family neighborhood. After this experience I decided to hire a certified property manager to screen tenants and handle things going forward. I interviewed and selected a property management company (did not go for just cheapest option) and they rented the place out but wouldn't give me any detail on the new renters until today when they picked up the keys for a one year lease. All they would tell me was that they met the 3x salary requirements. I raised a concern that a couple without kids was renting such a huge house (4 bedroom plus study and game room) and asked if they thought that was a red flag and the property management company said no. Once I received the lease today, I did a quick google search on the names and found out within 30 seconds that the 25 yr old one has 20 open warrants for things like possession with intent to sell, burglary, drunk driving and so on over a 5 year period. A few of them were disposed and the others are still in process. The other tenant is a 22 yr old. With no actual convictions yet is there anything I can do? My best friend lives across the street with her kids and I'm terrified now that I have brought danger onto their street. I'm also concerned that they will start dealing drugs out of my house. We are using the standard suggested har lease.

Holy moly. Sorry about this, that's scary.

Great question for an attorney in your state. I'd call a good one today.

1 Vote

Houston, Texas

Quote from @Katie Miller:

Hello! Looking for advice from other out of state investors who self-manage their properties that are part of an HOA.

I'm new to whole process of investing with a property inside an HOA out of state and looking for insight as to how you send a proxy voter (the proxy is required in-person to vote) for HOA meetings. Do you a send a proxy every time? Do you hire someone random? Do you send your cleaner and pay them separately? If so, how do you compensate them? Do you ignore these votes?

Our HOA is becoming more and more investor UNFRIENDLY and I feel it's important to have a voice at this vote in particular. Even though there isn't anything jarring to my business on the docket per say, I want to show the HOA I'm making an effort to partake as a sign of good faith. An olive branch even.

Unless you think HOA's don't give a crap either way and my participation isn't a sign of good faith.
Curious what your take is or experience is with HOA proxy votes! Thanks!

That's got to be frustrating, owning in a state where those changes after your purchase negatively impact you. I'm happy to say that in Arizona (according to an AZ Superior Court ruling last year), if CC&R's change after you purchase, that negatively impact your reason for purchasing (Such as operating a STR), your rights are grandfathered in.
Granted, this doesn't help you in CO.

1 Vote

Quote from @Jeremy Shaffer:

Currently looking at buying a duplex in the Fort Worth area. I have 1 rental property at the moment. I am wondering if I should do a DSCR for the new property, that will cash flow vs a conventional. Is DSCR simply worth it for the convenience and the fact that I will likely refinance in 5 + years when the 5 year pre-pay penalties are gone and rates are hopefully lower.

If you can get better terms with DSCR, then go with it. Usually DSCR terms are worse, and most people choose DSCR because they have DTI and/or credit issues. Sometimes, I also finance DSCR if a property won't qualify with traditional financing.

Sometimes I also go with worse terms via DSCR, if it means a much faster close of escrow, so my offer feels stronger to the seller. I do this especially in a hotter sellers' market.

1 Vote

Fort Worth, Texas

Quote from @Keena Santos:

Quote from @Chad McMahan:

Quote from @Heather Lambert:

What are some strategies to make rentals cash flow with current rates?

Hi Heather.
I'm finding that it's still easy enough for me to put together highly profitable/cash flow STR purchases for my clients. The bigger challenge is SFH long term rental positive cash flow.

Which STR markets in AZ is still profitable with todays interest rates?

Hi Keena.
I don't know about other areas, but I have my areas (Sedona and Cottonwood, Arizona) dialed in, and I know what's needed, here, to yield strong returns.

0 Votes

Houston, Texas

Quote from @Bruce Woodruff:

You keep mentioning AirDNA like it's 100% factual or something. Bear in mind that it's just a computer algorithm. If I were you I would be looking directly at the competition on VRBO and Airbnb sites. You need the real numbers on this not an algorithmic guess....

Agreed. I actually created a podcast episode about how our clients (and my own properties) are getting 20%-60% more revenue than airdna projected, and states, even now.

It's financially very risky for investors to be depending on this data. Unfortunately, there is not a great website source, airdna or otherwise. I find that the only way to get more accurate data, is go directly to super savvy STR PM's and STR secialized agents.

Recently, I learned my new Sedona clients have been getting proformas from a lousy local PM that gets horrible revenue numbers on their rentals. Once I helped them understand that and connected them with a better PM and I started providing them with accurate data (from the STR PM, and from myself), it was a game changer for that client.

1 Vote

Nashville, Tennessee

Quote from @Ian Tyndall:

I have been trying out a shorter format for my listing descriptions. I haven't put them on the OTAs yet, just my direct booking sites. I would love to get y'alls feedback on the use of my emojis. Here is a sample:

🚀 to 🏞️ Rockbridge Baths! Our 🌳 peaceful hideaway offers 🛏️ 4 bedrooms, 🛁 3 baths, and plenty of space to relax.

Enjoy a 🍳 fully equipped kitchen, 2 living rooms, and a welcoming 🚪 front porch.

Chill on the 🏡 screened deck and feast your eyes on the views.

🥾 Explore Goshen Pass

🍷 taste wine at Jump Mountain Vineyard

🎣 fish on Lake Merriweather

📖 Book your tranquil escape today!

Ian, great question. I appreciate the feedback here. I have an appreciate/hate relationship with emojis. I hate them, but appreciate that many people out there find comfort with them. I generally use 0-a small number of them, unless I'm sending something privately to someone who uses a lot of emojis- then I go all out.

0 Votes

Quote from @Sam Hum:

I'm struggling with analysis paralysis and too much reading and peer advice.

I can't decide what I want to do but it definitely is RE.

I'm a first time home owner, been living in this first residence for 1 year now, have some small funds in stocks I want to pull out to begin RE ventures with.

STR/LTR/BRRR/Flips all sounds really appealing to me after alllll the researching and self-educating that I've done. I'm driven to commit all the way through ups and down.

I'm a tech w2 by day and want out completely.

Every agent i talk to tells me "go find something to buy, it is easy and with your credit and DTI and funds you will have no problem getting your first door - just be sure the numbers add up"

so wtf are these "numbers"? is there a list somewhere in a solid article I missed somewhere?

I have "numbers" like land cost, or purchase price, and rent rates from whichever area's craigslist I look into and also airdna.

what other numbers do I need to build a solid business case to find partners?

at the top of my list right now I find myself most interested in finding land for under $80k and dropping a prefab on there to start out a STR.

thanks for help.

Yep. Analysis paralysis also stems from reading and listening to bad (or even good but overly complicated) advice. I recommend you stop asking the masses, and start having 1 on 1 conversations with top seasoned investment specialized agents that service market areas you would be open to. Be transparent with them and make a short list of your next 3 steps. Choose a real estate agent to start with, then take those 3 steps. You'll own property before you know it.

2 Votes

Sacramento, California

Quote from @Steve Ehrman:

We have been looking at vacation property in the northern part of Michigan's lower peninsula. There are some beautiful lakes and woods near Hillman.

We are thinking about VRBO/Airbnb rentals. It is a 5 acre plot on a great swimming, boating, and fishing lake. It is a drive to get there - no interstates or highways close by.

Airbnb's in the area are renting right now, end of season, for $275 - $350 per night. What factors should I consider in putting together a plan to build from scratch? Thanks.

If you're leaning toward having something built, perhaps think about a nicer modular property. Construction is 1/3 the time, and some modular companies out there make amazing homes- very modern/industrial with lots of glass and metal and taller ceilings. "Good" unique markets very well, and this may be a good way to go.

2 Votes

Quote from @Eric Wu:

Short version: I Airbnb my townhouse at LV to a family of 3 for 40 days and at this point they refuse to leave. Their last day was last week 9/19, they informed me they couldn't make payment to extend. I agreed to let them stay till tomorrow the 25th but now they informed me they are not leaving because they haven't find another living arrangement. I have contacted Airbnb to help resolve this issue.

I have done my research and noted that they may have establish tenancy rights in NV. I need advice and possibly an attorney referral to evict them.

Thx in advance.

I'd like to parrot Shawn's advice. Consider this an urgent situation that can get very bad, very fast. Do not seek further free advice. Call an attorney and get started, today.

0 Votes

Las Vegas, Nevada

Quote from @Connor Eigen:

Hi All,

Looking for feedback on our STR listing. All opinions and anything you think would help is greatly appreciated.

We are using pricelabs for dynamic pricing (still trying to find best settings) and we are also listed on VRBO.

https://airbnb.com/h/bearycozycabinbannerelk

Nice STR listing. Your place is the kind of spot I love to bring my family. Here is some constructive feedback:
Quality, playful photos- I like it. I'd re-photograph the scarecrow as it's blurry.
I'd redo the map with the nearby locations. Perhaps thinner connector lines with driving distances to those locations (The current image gives me the sense that those locations are far away). In my area, distance from trails is very important. If that's important, there, I'd recommend you also have a map showing distance from nearest trails, other attractions (distance to fishing, skiing, and others).

I'd also get twilight photos and aerial drone shots (if it's allowed there). Once it's cold enough, include some snow and snow activity photos.

One of the biggest challenges with STR's that are more remote, is occupancy rates- due to potential tenants being concerned about distance from groceries, restaurants, coffee, things to do. You did a great job mentioning some of these things, but it could be clearer about distance/time from these things.

Another way to solve occupancy challenges, which I strongly encourage, is adding a few more features so guests will feel less desire to leave and find comforts, such as a hot tub (with great photos, including lights on at twilight), well stock the home and make a big deal of this(especially coffee and the ease of making it), buy more indoor and also outdoor games, photograph them in use and describe them via verbiage in the listing. Also, is it easy check-in? If so, mention this.

You want remote-feeling properties to feel a bit like a 1-stop shop that they will want to hang out at the entire time.

1 Vote

All Forum Posts by: Chad McMahan

Chad McMahan has started 7 posts and replied 727 times.

Post: How to handle property manager leasing to person with warrants for drugs burglary etc

Post: Out of State STR Investing -- HOA Proxy?

Post: DSCR vs Conventional

Post: Cash Flowing Rentals- Is it possible in the Current Market?

Post: Airbnb arbitrage advice needed!

Post: How many emojis are too many emojis?

Post: Have $$ confused where to start

Post: Building a vacation STR from scratch

Post: Need legal advice - possibly having a squatter at my airbnb

Post: STR Listing Feedback

Chad McMahan has started 7 posts and replied 727 times.

Rounded Star Post: How to handle property manager leasing to person with warrants for drugs burglary etc

Rounded Star Post: Out of State STR Investing -- HOA Proxy?

Rounded Star Post: DSCR vs Conventional

Rounded Star Post: Cash Flowing Rentals- Is it possible in the Current Market?

Rounded Star Post: Airbnb arbitrage advice needed!

Rounded Star Post: How many emojis are too many emojis?

Rounded Star Post: Have $$ confused where to start

Rounded Star Post: Building a vacation STR from scratch

Rounded Star Post: Need legal advice - possibly having a squatter at my airbnb

Rounded Star Post: STR Listing Feedback

Post: How to handle property manager leasing to person with warrants for drugs burglary etc

Post: Out of State STR Investing -- HOA Proxy?

Post: DSCR vs Conventional

Post: Cash Flowing Rentals- Is it possible in the Current Market?

Post: Airbnb arbitrage advice needed!

Post: How many emojis are too many emojis?

Post: Have $$ confused where to start

Post: Building a vacation STR from scratch

Post: Need legal advice - possibly having a squatter at my airbnb

Post: STR Listing Feedback