All Forum Posts by: Charles Kennedy

Woah, woah, woah, I don't know how @Ahmad Eltawely said it's 56k, it's 77k!

And honestly, you are short on funding if your estimation is correct. You've been qualified for a 77k loan, and are putting 21k of your own money down, correct? If the lender believes your ARV, they are giving you only 50% LTV. Also if your estimations are correct of repairs of 50k, then you need a total of 108k. With your 21k equity and 77k loan, you are only at 98k!!! Do you have another 10k to come up with?

You will owe them 77k and will have to pay interest on that.

I think people's comments are very spot on about the tax benefits, but what I think others are wrong about is the aspect of leverage.

They seem to be thinking you are earning more by using leverage, which in a way you are, but @Jeffrey Rust 's 13% is his return on cash. When you invest in RE you are getting an X% return on your CASH/EQUITY not the entire amount!! So yes, it is nice to be able to use leverage in the fact that if you only have $25k or so you can invest in RE (by getting a loan for $75k and purchasing a $100k property), while you probably can't make HMLs with $25k, but it's not like leverage is dramatically increasing your returns.

I work in CRE and look at a lot of deals around the Southeast. Two deals I'm working on now are in Greensboro, NC and Ft. Lauderdale, FL. Millage rates there are 1.363% and 2.067%, respectively. Again, these are commercial properties (one retail, one office) so that likely makes things differ, but looks like they're not too far off Texas.

@Ashish Acharya Are these things "itemized deductions?" or not? Essetnially, can I deduct these things like mortgage interest, expenses, all the other things you listed and also take that single deduction, or do I choose the one that adds up to more?

@Laura Posluszny hmm If you're still paying $279/month, that likely doesn't factor in maintenance, capex, and potential for vacancy. How much could you fetch in rent when you move out? I'd be curious if it's enough to cover those things that will eventually happen and still turn you a profit.

BP Community!

On Airbnb's website they saw that in Atlanta you need a hotel license and business license to operate an Airbnb. That seems a bit ridiculous and I find it hard to believe that this is actually the case. I was wondering if anyone operating Airbnb's in Atlanta could comment on if this is actually necessary? I plan to purchase a duplex and Airbnb out the other side.

Thanks in advance!

@Michael Greenberg @Karen Chenaille thanks for the responses, I really love the NEST idea. My parents have one at their place, but I didn't think about the ease of changing utilities from your phone to cut down on expenses. Thanks for the info on pricing too! Very helpful.

You can definitely do a GP/LP and LLCs as well, I see this all the time in CRE. An investor will be the GP and raise money through various LPs. The GP puts up a small amount of money, but in the controlling (and obviously "general") partner. The GP/LP entity then purchases properties through an LLC. However, you will need to be getting commercial mortgages for these and it seems like you're not in that situation. The umbrella insurance policies may be the best way to go, but as the others have said, probably best to talk with a few lawyers.

I'm curious about re-renting, does your lease not specifically say you cannot re-lease/sub-lease? Or are you just taking the risk?  

@Michael Greenberg I've heard people recommend smart or electronic locks. Do you ever have an issue where the tenant has problems connecting or getting in with these? I'm somewhat inclined just to get a regular old lock box and put the key in there, but also like the idea of an electronic lock. What has your experience been with it?

Also can you all speak to how you should be adjusting pricing? What about for big events? For example, I live in Atlanta - If I begin AirBnBing, I'm worried I may not adjust my pricing correctly for some big event far in the future I'm not aware of. How do you all make sure your pricing is maximizing value? @Luke Carl @Paul Sandhu @Karen Chenaille

@Ross Kerne if you listen to @Brandon Turner all time the time you'd know he hates questions that ask "is this a good deal"... he states he doesn't know everyones market and what the rents/returns/etc. are in someone elses market. Only his own.