All Forum Posts by: David McCracken

Hi @Anthony McEvoy, thanks for the reply. No problem to disagree on the valuation. One thing that I love about cap rates is that it removes the financing variable. It becomes difficult to compare deals when some are cash, some are 10% down, 20% down, this interest rate, that interest rate. There are not any short-term rental portfolios that have ever been sold in my area. The cap rate valuation gives me a method to valuate my business based on comparable businesses in the area.

The biggest growth opportunity is one unit is still a long-term rental. It was freshly remodeled along with the others. All it needs is furniture to see a big boost in income. These are all licensed rentals. The remodeling was done with permits by licensed professionals. Everything inside is new. Flooring, cabinets, appliances, bathroom fixtures, etc. Roofs and furnaces are in good shape. AC units are brand new.

Long-term works fantastic in that area. The demand is high and supply is low. I spent a lot of time working on the rentals myself. Every day multiple people would ask us when the properties would be ready for rent.

I'd be happy to shoot the listing your way. Let me know a good email. Otherwise, I'll send it to you here.

I have a small portfolio of six rental units. Five of them are run as furnished short-term rentals, and one is a long-term rental. I'm interested in listing all six for sale. I'd like to know if you think this is an attractive deal. Details below.

Operationally, the business is run tight. It's almost 100% automated. As soon as we get a new booking, our software notifies our cleaner so that he can put it on his schedule. We have automated messaging, restocking, etc. It works well. We've managed to maintain a 4.8+ star rating on our listings.

The location is outside of the city of Detroit. Great access to highways and central to the metropolitan area.

I wanted to provide a picture that shows some of our work, so that it may help illustrate the level of quality. Picture is here.

The Net Operating Income of the business is $140,685.00. I feel confident with that number after going through our financial data. Next, I want to settle on a cap rate. Online I see that most businesses for sale in my area are in the 7.5% cap range or they don't include financials at all. A 9% cap rate puts the listing price at $1,563,166.00. Would this be considered an attractive cap rate? Too high, too low? 

I'm looking at buying a small plot of land next to a major interstate. Part of the land is leased to a media company that operates a billboard. The current leasing contract is for another 3 years at $4,000/yr. The plot is for sale for $55,000.

That stretch of highway has roughly 500,000 impressions per week. I believe based on the sign's location it is worth much more than $333/month. Especially if I sell directly to customers, rather than through the media company.

What steps would I take to convert this asset so that I own and operate the billboard rather than the media company? Will they allow me to buy it at the end of the leasing contract?

Hi everyone, I've recently ventured into the furnished short-term rental space. I've listed my property on Airbnb, and would like to expand. I think the next route is finding guests that are placed through insurance companies or corporate housing. So far, I've submitted my property to a national company called Temporary Accommodations. Any advice on where to go from here? Suggestions for other companies to submit my property to? I live in Michigan. Thanks!

@Bjorn Ahlblad For the outside solution I was planning on digging a trench around the perimeter of the house, installing PVC drain pipe and a sump pump, and then backfilling.

I don't know if this is the right solution or not. Most crawlspaces are repaired from the inside. It feels like a large risk to buy a house without being able to at least see the crawlspace.

I have potentially a pretty good deal in my hands. The only issue is that the house is on a crawl and the crawl is too shallow to be accessible. The crawl has had water intrusion previously, so something would have to be done.

Excavating the crawl and having it waterproofed from the inside is expensive and difficult. Waterproofing from the outside of the house would be the more realistic option. With this option, I worry about the potential risks of having an inaccessible crawl that I can't see. I don't have a lot of experience with crawlspaces. Is waterproofing around the exterior perimeter of the house a good option in my case?

Hi all, I'm currently under contract to buy a home that needs work done in the crawlspace. Does anybody have a good referral for the Metro Detroit area? Around Warren to be specific. If anybody could give me a ballpark estimate for this type of repair, I would appreciate it. 

@Dominick Austria could you fill me in on what underpayment penalties to expect? I'll definitely pay my entire taxes by April 2020. 

Hi All,

Quick tax question here. I bought a house 18 months ago for $132k. I'm now selling it at $275k. I'm expecting about $100k in profit. This will create a substantial tax debt. I've been talking to my CPA about tax implications. He recommends that I do a tax projection to make quarterly payments for Q3 and Q4. It's going to cost about $300. Does anybody else make quarterly tax payments? Is it worth paying your CPA to do a tax projection? Thanks!

I currently own and manage several properties in the suburbs of Detroit, Michigan. I work as a local realtor as well. Ferndale and Warren are primarily where I invest to be specific. I'm required to maintain a Rental Certificate for each of my properties. I believe it costs around $90 and has to be renewed every two years. The inspection is very basic and is centered around any safety-related issues.

It hasn't had much of an impact on me at all. I've had to install a couple of handrails, that's about it. 

Maybe I'm in the minority here, but I think landlords could use more regulation. My local market is hot so landlords will put up properties in poor condition since they know it will rent regardless. These slumlords make a bad name for those who care about placing a tenant in a home they can be happy and safe in.