All Forum Posts by: Cody Thayer

Jay is right on. You might have some chance at the semester changeover in January if thats on schedule, at the very least getting someone shorter term in there to get on the academic cycle. Visiting faculty, grad students, semester exchange...work the college market in a big way.

Ok, so now I would definitely suck it up and do what you need to do to get on that Aug/Sept cycle. Certainly selling now selling from the position of biggest weakness. If you don't rent january try updating where it’s easy eat the vacancies and rent in prime time. If your PM didn't know why then they don't know the college market and you should get one who does.

I agree. I’m going to buck up and put some *** into this. I’m not afraid of putting in the hard work where someone else won’t. I’m going to try this route and see what happens. I can afford another month or 2 at the least if it helps me in the long run! Thank you, I got this!

0 Votes

Memphis, Tennessee

Quote from @Dan Garrigus:

Hi @Cody Thayer I can definitely understand why you are thinking the way you are but you definitely DID NOT mess up. If you can still financially afford the monthly payment this is should not be the time to decide whether or not to 1031 this property.

The question should be, How is this property being marketed? What can be done to the property to create a desire to be rented? How can I add value to the next tenant? Etc. The problem seems to be a marketing issue behalf of the Property Management Companies that you have used, granted this time of the year can be more difficult find a tenant with all the holidays.

If the situation is more financially dire, I would consider refinancing. Yes, you will end up with a higher interest rate but you will also have an additional 17+ years to pay off the principal. When rates come back down and they will come back down you can always refinance it again to increase your cash flow. If you were to sell and 1031 you will most likely incur a higher rate than you currently have so selling to 1031 doesnt help the situation.

If I were you, I would refinance it to a 30 year and find ways to add value to the property to draw tenant interest your way. Never discount your monthly rate either, give a first month at a heavy discount or maybe even free to help your situation.

Hope this helps!

I love these ideas! I love the first month free/discounted. Going to send this to my PM now. Because a) if it rented for full asking last year, then it should rent for full asking this year. And b) if I can afford the mortgage the last 3 months, then I can afford it one more month to get a tenant in!

I will be looking into this, thank you!!

2 Votes

Memphis, Tennessee

Quote from @Jay Hinrichs:

Quote from @Cody Thayer:

Quote from @Joseph Beilke:

@Cody Thayer

What class of neighborhood is the property in?

What is condition of property and Beds and Baths?

Do you allow large dogs or cats?

How much is the PM Charging you to place a tenant and what is the monthly after that?

Why did the tenant paying $1350 leave?

Have you thought about section 8 or getting it listed with Military Base housing office if you are near base or fort?

Answering this question might help us help you better. Also tell anything about the property that might help form a better picture of what you're working with.

Middle class neighborhood. 1/2 mile from the University of Memphis campus. 2 beds, full baths (very odd I know). 1100 sq ft. I haven’t really thought about section 8 due to the neighborhood being more college students. However, the military housing might work!! I’ll look into this. Is there a site, similar to the Traveling Nurse programs that are out there?

there ya have it.. if this property has historically gone to collage students they dont move but one time a year and thats July August. you miss that window and your going to have a hard time with tenants.. and sounds like collage students were paying a premium.. I had the same thing happen to me in Charleston SC.. we missed the collage start date and the property sat vacant for 6 months till we could get new kids in there then it sold right away.

Ok good to know!! It’s been frustrating because if my property management company could have said this 3 months ago then I wouldn’t feel so trapped and worried. Their only solution is to keep dropping the price, and that doesn’t seem right. That makes sense, reading your response. Thank you!!

0 Votes

Memphis, Tennessee

Quote from @Eliott Elias:

How does rent drop that much? Sell it owner finance, 10% down 10% interest.

I have actually been listening to “No Money Down” podcast lately, and am interested in this. I’ve thought about using it to get my next property just to try it out. But I haven’t thought about doing it myself! Guaranteed return basically. Very interesting perspective, I just texted my agent about this option!

0 Votes

Memphis, Tennessee

Quote from @Patricia Drew:

Whether you take a HELOC or not, you should always have an emergency fund in the bank equal to 6 to 12 months of your salary.

I've seen things go south quickly when people get laid off or get sick, a tenant causes thousands in damages or you have unforeseen capital expenses.

You are absolutely correct, and I need to bite the bullet and put together a plan for this. I do have a fairly decent paying W2 job, but I’m slowly realizing that I don’t want to rely on that forever. And that if things do go fast, I don’t want to dip into MY hard earned W2 money to fix it. You are 100% right- I just need to face this demon and get this taken care of so I can be prepared and it not drain my bank account if something happens. Thank you Patricia!

1 Vote

Nashville, Tennessee

Quote from @John Morgan:

Quote from @Cody Thayer:

Quote from @John Morgan:

@Cody Thayer

Yes, definitely tap into that equity! That’s how I got 12 or 13 of my rentals. I used equity just sitting there not doing anything for me to scale up including using if for rehabs. It feels like buying houses for free. I also did three 401k loans to use to buy houses that generate great cash flow. It’s all about your return on your equity. Crunch the numbers. If you can make a buck off that equity, then put it to use. Good luck.

John, it’s good to hear from someone who has done this same thing and experienced it with success. This makes it very real to me, and makes me think that it obviously can be done if other people are doing the same thing!! Thank you John for the confidence here and reassurance!

No problem. PM me if you have any questions. I learned by trial n error when I started investing 7 years ago and didn’t know anyone doing this. But using equity to scale up to buy houses with no out of pocket money was easy to do! But I kept reinvesting my cash flow into fixing the properties up or for my next 20% down payment on the next one. It really starts to snowball after a few years. Good luck.

Yes good call and that bring me up a good point- now that I have 1 year + under my belt, I need to shift my focus to using the cash flow SOLEY for real estate purposes. I’ll have to make an excel document here to keep up with this.

1 Vote

Nashville, Tennessee

Quote from @Luka Milicevic:

@Cody Thayer

Get a first position heloc on the property where you have the equity. Use that to buy more properties.

Renovate the home you're living in right now slowly. One room at a time.

I love this Luka! I hope to get numbers back from my MLO soon on what my interest rates would be and what my ROI/ROE would need to be to make it make sense.

follow up question should I be using a local bank to get a better deal, or my mortgage loan officer?

1 Vote

Nashville, Tennessee

Quote from @Nicholas L.:

@Cody Thayer

1. are you really cash flowing $800 a month after all expenses? post them here if you want =)

2. don't buy something just to buy something.

Absolutely, I might be missing some hidden/opportunity costs here, But here is the general income/expense run down on my Nashville place.

total mortgage- $2,249
no utilities
pest control - $30/month
security - $46/month
total - $2,325

4 bedroom (all rented out separately):
- master bedroom - $1,200
- upstairs large bedroom - $975
- upstairs small 1 - $725
- upstairs small 2 - $750 (just became vacant last week)

- total rent up until this past week - $3,650
- total rent w/ 4th bedroom vacancy - $2,900

- so until I get the 4th bedroom rented, my cash flow will be about $550. But it seems to have been about $1,325 up until this last week. Let me know your thoughts on this!

1 Vote

Nashville, Tennessee

Quote from @Luka Milicevic:

There's nothing wrong with the advice your lender gave you. I would have given you the exact same advice.

70% of my properties are on 15 year notes. I get them as close to zero cash flow as I can because like your lender said....I don't need the cash flow.

Selling is short term thinking...every deal you do is going to go through different patches. Good times and bad times. If you sold every property anytime you came into a road block you would be selling constantly.

Time of year is bad to rent properties, but the fact that you can't get it rented for 3 months now seems excessive. Perhaps it's in really bad shape? I don't know what the story is here but rent should not have dropped that much.

I would not sell or refinance this property if it was mine. I would just look into possibly making some improvements and changing prop managers.

I think what I’m going to do is give it til Christmas. I will be in that area for Christmas, and will schedule to make some updates to this property based off my agent’s thoughts. I’d love to keep renting this property, it’s just that $1,350 on top of some other expenses is starting to eat at me after 3 months. I’m also going to call some other PMs again and see if I can get them to answer! Thank you Luka for the perspective, as if I don’t have to sell then I don’t want to!

1 Vote

Memphis, Tennessee

Quote from @Jon A.:

@Cody Thayer Two easy solutions to your problem. 1) Refi into a 30 yr mortgage to lower your monthly overhead. 2) Self manage. I'm shocked by the number of posts here about people losing money and searching for solutions while paying a third party between 5% and 10% of gross rent. According to Google, you're 3 and some hours from your property. Self management seems doable. Get a realtor to find you a tenant and a handyman to act as a super.... Also, how in the world did rent decrease by some 30%? Rent stagnates but generally doesn't go down.

I like your idea of self management. I do have a 9-5 job, but in the grand scheme- maintenance/handy man is probably 99% of the reason anyone needs to visit the property. So that does seem doable. I have a couple people from here running some evaluations on rent and if it’s where my PM is saying that it is.

I need to talk with my MLO on the Refi, but I hadn’t considered until reading through these posts. Only because my interest rate is 2.99 I thought it’d wash out. But that’s what I get for assuming. I’ll be connecting with my MLO to see what he thinks my new payment would be! Thank you Jon!!

0 Votes

Memphis, Tennessee

All Forum Posts by: Cody Thayer

Cody Thayer has started 2 posts and replied 39 times.

Post: Failing property on 15-year mortgage

Post: Failing property on 15-year mortgage

Post: Failing property on 15-year mortgage

Post: Failing property on 15-year mortgage

Post: Should I use my equity and heloc?

Post: Should I use my equity and heloc?

Post: Should I use my equity and heloc?

Post: Should I use my equity and heloc?

Post: Failing property on 15-year mortgage

Post: Failing property on 15-year mortgage