All Forum Posts by: Christopher White

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Tampa.

Purchase price: $350,000
Cash invested: $70,000

Do you homework before you purchase.

What made you interested in investing in this type of deal?

The average price of acquisition in the area for the square footage was about $250,000 - $300,000 depending on condition. This property was already fully renovated nicer than what I would have done and was setup perfectly for room rental platform allowing me to cash flow from day 1.

How did you find this deal and how did you negotiate it?

FB Marketplace. This property was originally a duplex however setup as a single family. An out of town investor bought this as a fix n flip however during renovation realized he could not convert it back to a duplex because it had already been zoned as single family by the city so it wasn't an easy property to dispose off due to only being eligible for cash, no ratio DSCR, or Hard Money and the investor's hard money loan was coming due so I was able to get it for 10% less than asking.

How did you finance this deal?

No ratio DSCR Loan

How did you add value to the deal?

Put it on Padsplit platform

What was the outcome?

Cash flow 35% over long term tenants

Lessons learned? Challenges?

Not all DSCR loans are equal

I'm a Padsplit host in Tampa with 2 properties on the platform. Their 14.75% fee seems high however considering they fill the property for you, manage the members and collect payments it's justifiable and you still cash flow over traditional renting. If your property is up to par you won't really have many maintenance calls except minor stuff such as plumbing clogs which is more likely to happen and requests to turn the AC up or down which you can do on your phone but other than that pretty hands off.
Vacancy depends on location and your Padsplit property score the more comfortable you make your property (mini fridges, tv's, outdoor area) the lower your vacancy rate but you can expect about 10% vacancy factor in a Padsplit friendly area (centrally located, easy access to public transportation). All rooms get punchcode locks, no key locks anywhere on site so members don't have access to lose keys or prevent anyone access. 
I'm also a Padsplit financing vendor and I'm only mentioning this because this is what led me to being a host. I have refi'd some Padsplit hosts and I saw their platform was real and the expected cash flow. You should either buy with a DSCR up front if the property is eligible and self fund your rehab or hard money for acquisition, do most rehab to common areas with the exception of additional walls prior to refinancing into a long term DSCR loan. There is also a Florida property manager who will fund the reno for you if you buy using DSCR upfront with no additional property liens as long as he manages the property.