All Forum Posts by: Casey Caton

@Payson Scott

You’re on the right track by asking these questions and thinking through the possible outcomes. I went through 8 years of school to find out that real estate was my passion and way forward. There could be a way to get a degree and invest in real estate. I went to college due to scholarships. Is there a way for you to apply for more scholarships and more grants so that you can save your college fund money? Is there a cheaper school nearby you could attend?

Can you start a house hack ASAP and rent out rooms to your friends? I think you can get a degree and do real estate at the same time, but I would only pursue the degree if it aligns with your passion or if you think it will be a useful tool in achieving your dreams. My degrees have been helpful but I believe I would have figured it out either way.

@Dmitriy Fomichenko I learned the importance of being able to pivot in the world of real estate - something out of our control happened. The company that was going to operate the home could not get insurance for the business because the insurance companies have gone crazy with COVID and have increased premiums by more than 3X here in New Mexico. One of their properties went from 7K to around 21K a year. That means no profits and not worth the hassle. My wife and I got the rooms ready for AirBnB and now have bookings all the way through December. Where there's a will there's a way!

Investment Info:

Single-family residence buy & hold investment in Rio Rancho.

Purchase price: $450,000
Cash invested: $30,000

I was searching for a house hack with many beds and baths, and I found this property at 3300 sqft, 7 beds, 5 baths, and the key was it had been converted into assisted living. Long story short, the previous owners were licensed to operate assisted living facilities, and we entered into a business and lease agreement for them to lease out the remaining six bedrooms and operate the assisted living facility. Their company pays us 3K rent per month and we share the profits from the business 50-50.

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

Cash Flow and providing an awesome place for older folks to live.

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

MLS, and we negotiated down from 475 to 450 because it had been on the market a few weeks, and it was a unique property.

How did you finance this deal?

Agency loan with 5% down (primary residence).

How did you add value to the deal?

Creating a business partnership to operate it as an assisted living facility.

What was the outcome?

Great cashflow of 1800 per month and meeting a great family who we will hopefully work on more deals with.

Lessons learned? Challenges?

Don't give up looking through the MLS - there are diamonds in the rough.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Yes - we had a local agent who knew the area well.

Investment Info:

Single-family residence buy & hold investment in Rio Rancho.

Purchase price: $450,000
Cash invested: $30,000

This was awesome. I was searching for a house hack with large number of rooms and bathrooms, and I found this property at 3300 sqft, 7 beds, 5 baths, and the key was it had been converted into assisted living. Long story short, the previous owners were licensed to operate assisted living facilities, and we entered into a business and lease agreement for them to lease out the remaining six bedrooms and operate the assisted living facility. Their company pays us 3K rent per month and we share the profits from the business 50-50. We are extremely thankful that we met the previous owners who are an awesome couple who truly care about the residents.

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

Cash Flow

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

MLS, and we negotiated down from 475 to 450 because it had been on the market a few weeks, and it was a unique property.

How did you finance this deal?

Agency loan with 5% down (primary residence).

How did you add value to the deal?

Creating a business partnership to operate it as an assisted living facility.

What was the outcome?

Great cashflow of 1800 per month and meeting a great family who we will hopefully work on more deals with.

Lessons learned? Challenges?

Don't give up looking through the MLS - there are diamonds in the rough.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Yes - we had a local agent who knew the area well.

Has anyone house hacked a small residential assisted living facility? 

Seems like it could have potential, but the biggest risk would be getting a loan. In a hypothetical where the house is empty, but completely up to code and ready for residents, I think it may work - especially if you are able to find a great manager/operator to run it for you. It would likely depend on state regulations that may dictate whether an owner/operator could live under the same roof as residents ( a casita or guest house may solve that issue). This way may let the owner get a residential loan on the property as their primary residence. Anyone have thoughts on this option?

Maybe someone needs to hear this today - keep on going! Some days can be pretty rough in the world of real estate - insert toilet related issue here - but one thing is for certain:  we live in a place and time with amazing opportunities. Enjoy the journey and take it one day at a time. Don't let the tough days keep you down. Learn the lessons, keep them with you, and use them on the way to becoming the best version of yourself. There are time when the offer just doesn't get accepted or that appraisal comes in a bit low, but keep up the good fight - don't let it stop you. Let these brief failures motivate you to do more and more until you make it happen. Learn and grow. With the knowledge and community of BiggerPockets, we really don't have too many excuses anymore. This community has put me on the path to financial freedom, and I am extremely thankful for the blessing of having this real estate family. Keep up the good work!

@David M Trapani I am more than happy to serve because you and all our citizens are worth it. Thank you so much for taking the time to share your story and advice.  It is obvious that you have wisdom and knowledge from your years of experience and training.  I am strongly leaning toward finding a real estate related legal position back in Texas, grow some roots, learn the local market, make local connections, build relationships, and then investing.  You mentioned that the legal profession keeps you sharp, and I find that to be true in my current field as well. Constantly reading, studying, writing, researching, and litigating keeps us sharp, and I think getting to focus on real estate litigation or transactions could only benefit investing. Thank you again for your insight.

@Brian Boyd My only concern would be losing the ease of getting financing through that W-2 jobs and missing out on some possible connections, knowledge, and experience.  I do think I am much more passionate and driven when I am working on a real estate project rather than some type of legal review or briefing.  I do think I will stick will legal practice through the form of legal aid and legal assistance once my real estate passive income can support it.

@Ronald Rohde that would be great! I’ll send you a message to connect. Thanks for taking the time to reach out.

@Chris K.

Thanks for all of that information. It is extremely helpful!