All Forum Posts by: David A Lisowski

Sounds like it's your PM.

We feel into the same thing with our PM on our short-term rental.

We moved into our rental in May 2020, and they sent us a $300 maintenance bill for May and June for "lock maintenance." Obviously, we called then out. Literally every time we came to visit prior, the cleaning was not up to snuff.

In the long run, they will scam you if they can get away with it. Especially people who are out of state or want the "set and forget" investing.

Not all PMs... but your story fits the pattern.

@Dabvis Le Sutton

Congratulations! Sounds like you have a solid plan, and some good numbers to back you up!

Welcome to the world of real estate!

Can't wait to see your next deal!

So I had this email pop up this morning and I thought I'd give it a shot at analyzing this deal.

I don't know much about the area, and this was in an effort to practice making quick offers. Everything was sourced online, and based on the listing, the property probably has more issues beyond cosmetic repairs. So that probably kills the deal.

But from what I did, it seems good on paper. Unless there is something I have blinders to and I'm not seeing.

Here's my write up:

Deal Analysis:

MLS: 1091507

Purchase Price: $75,000

Loan Amount = $52,500

Down (30%) = $22,500

Closing Costs = $3,500

Cash-to-close: $26,000

P&I at 4.0% = $250.64

RE Tax = $56.92

HOI = $30

Total PITIA = $337.56

Rent = $1,000

Expenses:

PITIA = $337.56

Property Manager = $100

Capital Expenditures = $100

Vacancy = $50

Utilities = $100

Operating Expenses = $687.56

NOI = $1,000 - $687.56 = $312.44

NOI (50% Rule) = $1,000 - $837.56 = $162.44

837.56 = 337.56 + 0.5(1000)

Cash-on-cash = 3,749.28/26,000 = 0.1442

Cash-on-cash (50% Rule) = 1,949.28/26,000 = 0.07497

*******************************

Renovation Analysis:

Post-Rehab value est = $100,000

Purchase Price: $75,000

Loan Amount = $60,000

Down (20%) = $15,000

Rehab/Reno (10% PP) = $7,500

Closing Costs = $3,900

Cash-to-close: $26,400

P&I at 4.0% = $286.45

RE Tax = $56.92

HOI = $30

Total PITIA = $373.37

Post-Rehab rent = $1,300

Expenses:

PITIA = $373.37

Property Manager = $100

Capital Expenditures = $100

Vacancy = $50

Utilities = $100

Operating Expenses = $723.37

NOI = $1,300 - $727.37 = $527.63

NOI (50% Rule) = $1,300 - $1,023.37 = $267.63

1,023.37 = 373.37 + 0.5(1300)

Cash-on-cash = 6,331.56/26,400 = 0.2398

Cash-on-cash (50% Rule) = 3,211.56/26,400 = 0.12165

@Collin WIlkinson

I too am curious. I get the idea or the theory of getting investors... but I like practical applications and examples too.

So theoretically, you can present your investment portfolio. If you don't have one, or it is weak, present a mock-deal, and how you would approach the investment. What are the goals, plans for the property, strategy, returns, NOI, cash-on-cash return, ROI, etc.

I think you need to warm-up the leads to investing. Not like, "Today I will present to you why I need $50,000 from you." But more like, "I have this investment opportunity, and I'd like you to join me. What are you comfortable with?"

In terms of repaying them, you should have terms just like you would anywhere else. Are you profit sharing? Are you paying them lump sum amount? Are they expecting certain performance or just a set amount of money? Are you giving up ownership of the property?

You can pay them back monthly like a bank loan (with principal and interest), or you can make installment payments on a set amount, or you can cash-out equity with: a refinance, a second lien (HELOC), or when you sell the property.

Again, I'm in theory-land still.

@Avery Carl

Thanks, Avery. I've probably called or emailed you through my work down here.

@Austin Shireman

So friends of friends? Friends of family?

Start with your network, and ask them for folks you don't know.

But overall, it sounds like this guy wants you to collect him some free data-mining.

Are you supposed to just give him this list?

Hello everyone!

Lots to say and lots to figure out still, but I've got to start somewhere.

First: my wife and I are looking to get some more real estate deals and grow a portfolio of some strong, income generating properties.

More specifically, we have a goal to find, purchase, and manage a single family or duplex that generates approximately $100 per month in net income. Purchase within the next 12 months.

We have an additional goal of scaling that to generating $5,000 per month in the next 7 years. And $10,000 per month in 10 years.

Now some background:

My wife and I first purchased a vacation rental on 30A in June of 2018. We had a few property management companies, and were certainly not involved enough on the property management-side. We were living and working in Nashville, TN, and having the vacation rental 6 hours away meant we were a little less involved in the day-to-day. Lesson learned. IMO, property managers should be partners in your investment. Not necessarily in the legal sense, but in terms of conducting business and generating income.

We purchased on 30A for several reasons: it's a vacation spot we love visiting; we got in while prices were still affordable; we wanted to invest in real estate; friends and family in the area; eventually we wanted to move to 30A.

Well fast forward to the end of 2019: we had a pipe burst on an outside hose in November. That was the catalyst for us to decide to make our move. We were ready. We had the damage fixed, cleaned up the basement and garage where stuff had gotten wet. We decided to list the house for sale in February and were going to wait until March to put it on the MLS. Thankfully, we listed right around February 17 and beat the wave of 2020 pandemic.

It was definitely concerning with the way February and March developed, but we ended up accepting an offer. It wasn't super-smooth, but we ended up closing in May with one week of rent from the buyers.

My wife and I decided to move into our rental on 30A especially since there was a ban on short-term rentals until the end of May. At the time, it was undetermined how long or how much of an impact the short-term rental ban would have on our investment.

We were able to refinance our property while we lived here, and are on track to purchase a new primary.

We are committed to the 30A area, and love to call it our home! We are looking forward to some great real estate investment opportunities. We plan to purchase another investment here on 30A, and then start looking to multi-family and multi-unit properties.

My ultimately goal is to get into real estate development. Together, our goal is to amass a huge real estate empire!

@Bradley Snyder

Good luck.

Nashville has effectively decided they do not want short-term rentals. You might get lucky, but it is a very restricted market.

@Corben Briggs

Good luck. You need to get permits from the city, and I don't think they are issuing any. Most Nashville neighborhoods have had negative reactions to the short-term rental market due to noise, partying, drinking, etc.

I'm not trying to crap on your idea, but that's a tough market to invest in short-term rentals... it's doable, but there are probably better investment opportunities in Nashville.

Buy and hold in the Brent-ioch area. Buy and hold in Bellevue. Buy and hold in Spring Hill or Columbia.

But I'd count on having leases and long-term rentals.

Oh, and I wanted to add that another way to avoid MI is to open a purchase money second (HELOC) at the same time.

So you would have your first loan at 80% LTV, then a HELOC for 10%, and you put down 10%.

This avoids MI and let's you put less down.