All Forum Posts by: Dave G.

@Chaits J. Wherever you look to invest, I would question if the market for STRs isn't already approaching saturation. I live in Clarkdale and just in tiny Upper Clarkdale we have 3 STRs that are competing for business that weren't there only a few years ago. And there are many in Cottonwood, Jerome, Sedona, and so on. Contrast this with LTRs where there is practically nothing available. My observations are anecdotal of course...

@Nicole Harrington

Find out what kind of plumbing you have and the condition. One of my properties is a 1915 bungalow, small like yours. I've done a lot of plumbing fixture repair/replacement in my time, but chose to pay a local plumber that has experience in these old homes as I wouldn't want to do more harm than good as a DIYer on this. So for me this was an additional expense over buying something newer I could work on myself. Also, if the property is in a historic district or register, that could significantly limit your options on (typically) exterior upgrade/design to things like the windows, trim replacement, paint color & scheme, etc. Something else we discovered during our purchase inspection was the property had an "abandoned" chimney that was once used in the kitchen (we think) for cooking. It was basically an open chute going all the way to the floor level and allowed rainwater to enter and cause mold. We had the mold cleaned up and the chimney capped. It still looks good from the street but is totally non-functional now.

@Cheza M. You adjust your rent based on whatever your market is doing. Inflation could be high and market rent flat if you have a lot of net outflow migration. It is a multi-variable equation. That being said, yes, inflation is a large factor in most markets these days.

My property managers do a market analysis on a frequent basis to know what to market an available property for or for lease renewals. And my PMs' compensation is aligned to how much rent they collect so they are motivated to seek market rent levels versus being lazy and undercharging to make their jobs easier. 

@Alicia Tingey Geddes

Recommend you read Emerging Real Estate Markets by Dave Lindahl. It is not a new book, but enough of the principles are timeless to make this a very valuable guide on where to deploy REI capital.

Unfortunately how much/how fast it should be raised and how much/fast it is being raised are not the same thing. The Fed should have been raising rates last year, they are already behind the curve. Nov 2021 we had a CPI of 6.8% and they didn't institute the first increase until last month. And the increase was a measly .25% to bring the fed funds rate to .5%. 

Good job bringing a fire extinguisher to a forest fire...

If you have that much smoke getting into your unit from theirs, you ought to look into why the two units (HVAC or ??) are not partitioned/isolated from each other better. You shouldn't be sharing the same air...

@Erik Fredriksen

I've used the HELOC on my personal residence multiple times to structure cash purchases. My credit union asked what the loan purpose was only when I applied for it (remodel of my house, which was true) but ultimately had no idea what I used the money for over the years. I always paid it back promptly so not sure why they should've cared much anyway.

The HELOC alone was not enough to buy property, so I would combine it with a loan against my 401K and money I saved. My strategy was then to pay off the HELOC and 401k loan within 12 months and do it again. Obviously if you're doing BRRR you could do this faster (unless the lender requires seasoning). I did this at least 3x and it gave me a competitive advantage since my offers were all cash to the seller, no appraisal or financing contingency. Worked great but only recommend if you have the discipline to pay them back sooner vs later. Especially something like a loan against your 401k, you don't want to mess that up.

@Shannon Glanton

Ok, the beginning of my "journey" was as follows:

It started in pre-internet days. I was 22 years old and ~1 year out of college. Full of ambition & broke as hell, a RE investment book caught my eye at a used book store. I couldn't read it fast enough. Then I promptly read all the real estate books I could get my hands on from all the public libraries in my county. Then I decided to become a realtor to 1) help learn the transaction process 2) give me access to the MLS and 3) I hated my job at the time so I needed new one anyway.

Within 6 months, I bought 3 properties, all no money down. I quickly got tenants in each property after closing, but I was over-leveraged and had negative cash flow. I had no reserves either. And as a new realtor in a horrible market, my "employment" income was barely enough for me to live on, let alone feed the alligators. I had made serious errors that were not recoverable and was forced to dump all three properties within 18 months. 

Please don't do what I did.

@Christopher Tokarski do a house hack and kill two birds with one loan.

@Winston Dottin I don't know about specific experience with the tax lien topic, but Mark Zinman is a RE lawyer I've seen speak quite a bit at AZREIA meetings in Phoenix. You could try him and maybe he can point to another attorney if he's not the guy for your need.

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