All Forum Posts by: Chris Rich

@Trevor McCormick I have a lot of properties in that area. If you want some revenue numbers for similar properties to the ones you're looking at or anything to use in underwriting feel free to reach out. Just make sure you're actually putting pen to paper and doing your due diligence on underwriting. It's a competitive market and most of the people that get in trouble here are ones that buy blindly without actually figuring out the numbers, etc.

You'd be surprised the number of times I get asked after month one if their electric bill of $xxx or whatever is normal, and the thought running through my head is "how did you not check things like that before you committed half a million dollars to something?"

Seriously! I get blown away how many times this happens, especially with STRs in that area. So many people bought with minimal or inaccurate information. And not knowing their numbers also makes it next to impossible to know if you have a bad PM that's eating into your cash flow as well (Like Vacasa charging $800-1000 a month for elecrtic on a 4/3, 2000sqft house with a pool).

@Trevor McCormick to piggyback off what others have said, determine if you are trying to maximize it as an investment or utilize it as a vacation home you will STR to help cover expenses, as this could dictate which type of property you are looking for. The good news about the saturation is a lot of investors bought in the height of covid, with abnormally high performance numbers. Many of them are now trying to sell, so there are deals to be had.

0 Votes

Orlando, Florida

Quote from @Fajer Na:

Quote from @Chris Rich:

Quote from @Shane Regnier:

Hello everyone, we know this post is a few months old now, however we are interested in the Ocala, FL market as well, primarily looking at LTR SFHs in the Silver Spring Shores, Heath Brook, or Marion Oaks neighborhoods. We live in San Diego so would be long-distance, TBD if we self-manage or enlist a PM. A couple questions:

1) Has anyone worked with local lenders like a local bank or credit union? We are out of state but would be open to working with someone local if they can offer favorable terms.

2) Any local realtors you have worked with and been happy with?

3) Any experience in those particular neighborhoods?

Thanks everyone for your input!

- Shane & Jen Regnier

Hey @Shane Regnier like Giuseppe said, it's become a little saturated in some areas of Ocala compared to 3-6 years ago. I did a quick search and there are 187 total rental listings in Marion Oaks in the last 90 days. 90 are vacant listings, 18 canceled, 70 that have leased, and 4 pending. Silver Springs has 89 active listings, 27 canceled, 4 expired, and 56 that have rented. Heathbrook has 61 active, 13 pending, 21 canceled/ expired, and 46 that have leased, so not as bad as the other two. And talking with my leasing team, the properties that are moving quicker are on the lower end of the rental range $1450-1600. I know DR Horton and Lennar are still building a lot, but they seem to be building smaller communities. I would be cautious buying in the saturated areas because there are so many similarly sized properties that price is becoming increasingly the deciding factor.

Hello Chirs,
These numbers are great! Thank you for sharing.can I know from where you got them?

I pulled them from the MLS for Single Family Houses in the last 90 days.

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Quote from @Shane Regnier:

1) Has anyone worked with local lenders like a local bank or credit union? We are out of state but would be open to working with someone local if they can offer favorable terms.

2) Any local realtors you have worked with and been happy with?

3) Any experience in those particular neighborhoods?

Thanks everyone for your input!

- Shane & Jen Regnier

0 Votes

Quote from @Patrick Roane:

Quote from @Chris Rich:

Depends on your approach - cash flow or appreciation. It's definitely nice to have a paid off rental. Or your can buy multiple properties with small mortgages. Two houses appreciating long term is likely a better ROI than the cash flow from the one property would be. But you are also doubling the number of tenants, chance of expenses, etc.

I agreed. Give the cost of money these days is around 7%, it would definitely be nice to have a paid off rental.

Like Tim said, the 7% is largely irrelevant because your tenants are paying it with the exception of vacancy periods.

But it's all about the numbers. What are you going to do with the cash flow and is the ROI going to be better than the appreciation on a 2nd house as opposed to just 1? It's hard to say for sure without knowing your market numbers, but I would bet you if you looked at a 10 year projection, you will probably have a better ROI with the equity in 2 houses as opposed to the equity and cash flow with one.

3 Votes

Dayton, Ohio

2 Votes

Dayton, Ohio

Quote from @Gabi NA:

Hi, I am a 20 year old college student looking to buy properties with the goal of either turning them into Airbnb short-term rentals or long-term rental properties. I'm pretty new to the game and would love to get some advice from more experienced investors here!

A few things I'm trying to figure out:

First-Year Living Requirement: I've heard some places require you to live in the property for the first year before renting it out. Is this something I need to worry about? I'm not sure if this is a local thing or if it's common in all markets. How do I know if this applies to the areas I'm looking at?
Airbnb vs. Long-Term Rentals: What do you think is a better strategy for someone just starting out—focusing on Airbnb (short-term rentals) or traditional long-term rentals?
Rental Arbitrage: Is rental arbitrage still a viable strategy in today's market, or has it become oversaturated? I’ve heard mixed things about it, and I’m wondering if it’s worth considering as a young investor without a lot of capital to start with. Has anyone had success with rental arbitrage recently?

I’m open to any advice, personal experiences, or recommendations for someone at the beginning of their real estate journey! Thanks so much in advance!

Hi, I am currently living in south Florida and was wondering what are some good areas to look for condos or townhomes to rent or do Airbnb.

If I was you I would house hack. Buy a 3/2 (if possible), live in the master, rent out the other 2 rooms to friends. Renting an individual room is all but guaranteed to be cheaper than them renting a 1/1 apartment alone. This will lower your monthly living expenses while your tenants help pay down the mortgage and the house appreciates. Then in a few years you can find a 3rd tenant for the master, pull out equity, buy a new house, rinse and repeat. A friend from college did that starting in 2008. With a little help from the market and appreciation, his portfolio got up to 12 SFRs. Last year he sold most of the SFRs and bought a multi-family. He's retired at 35 and all he does his run his units.

3 Votes

Fort Lauderdale, Florida

Quote from @Nathan Gesner:

https://www.zillow.com/research/october-2024-rent-report-345...

It's normal for the market to slow down in winter, especially right around Thanksgiving and Christmas. This year feels different, and I'm hearing many landlords complain they can't find renters. My market is humming right along, except for the higher-priced single-family homes.

The linked article provides some good information.

What are you seeing? Has it slowed? Reversed? Stayed the same?

Yes, it was a slower summer than normal. Rental inventory is up and rates declined in a lot of areas of Orlando / Central Florida. With that said, the properties that were prepped and in good condition still rented quickly and on the higher end of the market range. Conversely, those who just wanted to relist without any repairs, or continued to try to increase rent despite the market shift are struggling to find tenants. With that said, we have seen an uptick this month of applications and our DOM has fallen 8 days in November.

1 Vote

Casper, Wyoming

If it's just the one property I think the answer is lower than it would be if it was a largely portfolio. Generally speaking, I usually recommend at least 3 months of mortgages with at least $3-5,000. That amount should cover most unit turns. But if you have larger expenses coming, it's a good idea to save more to lessen the burden of those high ticket repairs.

0 Votes

Oakland, California

Quote from @Michelle Glover:

Hello everyone!

We’re currently flipping a home in Maple Heights, OH, where most homes are 3-bedroom, 1-bathroom layouts with unfinished basements. To maximize the living space, we worked closely with the city to create egress window codes, allowing us to add an additional bedroom, a beautifully finished bathroom, and a family room in the basement. Our remodeled home has received multiple offers at or near the asking price.

Unfortunately, we've hit an issue with the appraisal. Despite the Ohio Building Code recognizing the basement bedroom as a legitimate bedroom, the appraiser did not include the basement in the general living area (GLA) and didn’t assign much value, if any, to the additional finished space.

Has anyone dealt with this challenge before? Any advice on how to address this appraisal issue would be greatly appreciated!

Thanks!

Michelle

When I bought my first primary we ran into something similar. The house was a 3/2, 1650 sqft, with 2 car garage. The seller converted one of the garages into a bonus room and it added 300sqft under AC. The appraiser listed it as a 1650sqft, 1 car garage... completely omitting that converted garage space. We had to pay for a 3rd party to review the appraisal and either agree or disagree that it was done correctly. They agreed it was wrong and a new appraisal was ordered and done correctly. I was not in the industry at the time, so I am not exactly sure who that 3rd party was, but I would say there is recourse if the appraisal is fundamentally flawed.

1 Vote

Cleveland, Ohio

Quote from @Thomas A. Rufo:

Hello Everyone,

This is my first post on the forum. My wife and I currently own two identical condos (3 bedroom/2 bath) in the same community. We were married over a year ago and I moved into her condo and we put the other condo up as a short term rental. It has been doing well renting consistently. We want to travel and invest and are considering converting this short term rental to a long term rental to avoid sales tax, paying utilities and general management of the property. We are considering renting both condos long term and hiring a rental management company to collect rent and manage. We feel this will give us more freedom and consistency financially. We want to travel via RV and potentially house hack in multi-family to have a home to return too as well as potentially take advantage of 5% Fannie Mae loan for purchase of multi-family using least amount of our own money. Does this strategy sound good? Any opinions on short term vs long term rentals? Does plan to house hack on Multi-family make sense? I appreciate the forum's experience and input. We are newbies to the multi-family investing. Thank you!

I am in the long-term property management space, so I may be a little biased, but everyone saying "STR is more profitable" should really be saying "CAN be" more profitable.

Really depends on what you are looking for, your market, and how passive do you want to be. STR is more like hospitality and yes, it can be more profitable. It could also require more time and effort, have more operating costs, and not be worth it.

I had a client last year who was self-managing her LTR but wanted to take her RV and travel. After discussing her goals, she ended up hiring us for the management. Within a few months she was thrilled because hiring a PM freed up her time and allowed her to focus on the traveling, and not managing the property.

Ultimately, I would look at the LTR rental numbers and see if it meets what you need. But keep in mind, even LTRs have expenses. But according to Zillow, tenants stay on average 3-5 years in a rental. In my experience, if you take care of the tenant you will likely see that average to be true.

0 Votes

All Forum Posts by: Chris Rich

Chris Rich has started 0 posts and replied 102 times.

Post: Advise on Purchasing my first STR in Kissimmee Florida

Post: Does anyone invest in Ocala Florida

Post: Does anyone invest in Ocala Florida

Post: Getting ready to purchase an SFR rental

Post: Getting ready to purchase an SFR rental

Post: Young college student looking to buy their first property for Airbnb or Rental

Post: Are rents dropping in your market? You are not alone.

Post: Reserve Fund Contributions

Post: Lots of offers but appraised low

Post: Short Term vs Long Term