All Forum Posts by: Cole Schlack

Real estate professionals are, in many ways, acting as financial professionals.  Not unlike a financial advisor.  Of course, a real estate agent's job is to sell.  An agent is compensated at closing.  By their nature, sales people are inclined to point out the good and minimize the bad.  Nothing wrong with that.  

I wouldn't go so far as to say that a real estate professional has a fiduciary obligation to a buyer.  On the other hand, words and phrases such as "guaranteed", "no risk", "no brainer", "can't lose", and "you can do it from your iphone" could be quite problematic.  

We have a client that, in September 2021, purchased a cabin in the Smokies and called and asked us to manage it for them.  Of course we were honored, but when we went to the cabin to inspect it, we found that it was going to need about $75,000 of work just to be safe for guests.  And the maximum we projected it would rent for was about $35,000 per year.  The location is awful and it doesn't have any sort of redeeming qualities, other than just being a decent house in the woods, almost an hour away from attractions, and on a road that you need a 4WD to traverse.

The homeowner became angry with us and said "well the realtor said he thought it would do $75K a year easily."  Hmm.  That's a problem.

Fast forward today:  They've spent almost $100,000 on the property and it's still got bad water.  It took them 13 months to get it ready to rent.  We finally started renting it in October.  As expected, it did around $3000 in October and around $2000 in November.  I was surprised it did that well. 

Meanwhile, they have about $420,000 tied up in a property that is probably worth less than $200,000, fair market value.  Do they have a cause of action against the realtor?  I have no idea - I am not a lawyer - but I wouldn't want to be sitting in his shoes right now.  

I’m going to be selling my condo sometime around next June (23) and was looking for advice on both what renovations to make and what order to make them. It’s small (799 sq ft) 2 bed 1 bath. I will be living in it up until the sale. There is some damage to the kitchen  cabinets so I would like to redo them, as well as out vinyl wood floors throughout the house, new appliances, give all the walls a fresh coat of paint, as well as redo the shower and vanity. Any advice would be appreciated.

Hi everyone! 

I'm looking to invest in an STR in Florida. I have 10% down payment set aside. Most of the loans I've looked at require 20-30% down for STRs. Does anyone know if there are lenders out there willing to handle LTV 90% on an STR? Thank you!

Hi all,

First post, but have lurked for years. Amazing community.

I am selling a vacant parcel of land that will yield roughly $1M in proceeds. I am planning to do a 1031 to avoid capital gains.

I have developed several parcels and sold them, rookie land developer, but I know how that all works. I have never had a rental property.

My gut is to find another vacant parcel to improve, but I have coworkers and BP saying that multifamily is bread and butter, and I feel like $1M down could get a quality unit in a good area that would be a good long term play. I’m in San Diego and would be looking locally.

I’m not worried about short term cash flow as luckily I have a stable W-2 job. But this also means I have limited time to deal with tenant problems etc. (I would definitely hire a property manager regardless).

My options:

1. Get another piece of vacant land

2. Get a single large multifamily unit

3. Get multiple smaller units (1031 timelines add complexity)

4. Cash out and do a QOZ for the gains and take my time to find a property

Open to any thoughts. I can make spreadsheets work for any of them, but my question is more about the qualitative aspects, given that I have a day job. Thank you!

I vote stay with Vacant! Ive seen a few nice deals in SD or come check out Hawaii Farm land.  Property tax on a $1m farm parcel is $100 per year and you can lease it out for a little cash flow. 

I would avoid Hawaii if you're starting out. @Cole Schlack - By "small window", you are trying to time the purchase, which is not the best strategy when it comes to building long term wealth. I would rather advise OP to run numbers and see if the deal makes sense using conservative estimates. Kissimmee and Davenport STR zones have regulations at state and county level that are here to stay. Hawaii is a different ball-game. In Hawaii, if your local government or HOA change the rules surrounding STR (which has happened to a few I know, and they were led to the purchase by experts in Hawaii Real estate with knowledge of STRs), you are stuck with a liability which you might have to sell at a loss because it can't be used as a STR anymore.

I have researched these properties bought by international buyers and run by PMs who do not do a good job. Don't get me wrong, I have seen some PMs who are highly rated and are doing excellent, but they are few. Eventually, people (specially families) will want to spend more on a highly rated rental than a mediocre rental with low prices. No everyone reserves the lowest priced property in STR booking websites!

Looking for advice. If low end rental projections (from area property Managment companies) don't cash flow, or are neutral, but AirDNA comps and market data analysis on ADR and occupancy show potential 25% cash on cash return, would you do the deal?!? Asking for a first time STR friend…😉

BTW - this friend is under contract and the increased insurance premiums are effecting the original projections…