All Forum Posts by: Denis Ryan

I am paying $161k cash for a condo on 12/30 that I am going to STR. I'm looking for delayed financing (which is financing I can secure directly after closing and is different from a refinance). Condo is not warrantable. My DTI is also tapped out, so I would need a DSCR loan.

Every mortgage company I've spoken to thinks this is a refinance and aren't able to do it for 6 months. I'm looking for a way that I won't have to wait that long so I can reinvest my cash into another deal.

Hey Everyone, how about we revisit this now it's a year later? The economy is still strong, but we have inflation, the moratoriums have ended and unemployment is low. How do you think it will play out now?

Investment Info:

Condo buy & hold investment.

Purchase price: $142,000
Cash invested: $62,000

Our first "Buy and Hold", Bream Av was a clean, but severely outdated STR. A 3min walk to the beach, it was a great price and the HOA was vacation rental friendly! We brought in new cabinets and appliances (ya dig the cool, red, retro fridge?), salvaged barnwood flooring and custom made the countertop, backsplash and floating shelves. We did some soundproofing and custom made the tables, epoxying Peccy Cyprus that had been laying on the bottom of a Lousianna river for 100yrs.

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

We were finding it tough to find any good flix and flip deals. I had intended to acquire our first buy and hold later in the year but when we stumbled on this deal, we thought it was too good to pass up, so we pivoted.

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

We went to Destin to look at a property that had incredible AirBnb rental history. We were going to put in an offer but on the drive back to FWB, started debating the impending ordeal of dealing with summer traffic to turn over the property (at that point, we were going to manage it ourselves). We looked up the MLS to see if there were any similar properties closer to home on Okaloosa Island. We found this one and we quickly got it under contract, at a little over asking, as it was the last one.

How did you finance this deal?

25% down through Navy Federal's commercial department. They were busy but the process was unnecessarily dragged out an extra 30 days. As the market was going crazy, the Seller could have easily denied our repeated extensions, so it was very stressful. We also lost 30 days of summer income, so I won't be rushing back to them for another loan anytime soon!

How did you add value to the deal?

The condo was built in the '80's and had never been updated. So we gutted it and updated everything. My wife did a fantastic job on the decorating and we built some custom-made furniture. We added some unique features, like the red retro fridge to give it a kind of rustic, but modern beach look.

What was the outcome?

The unit is crushing it and the reviews have been outstanding. We're on target for a 37% CoC return!

Lessons learned? Challenges?

We were going to manage it ourselves but ended up going with a young couple that are super motivated, aggressive and up to date on all the latest technology. Their 20% commission is worth every penny and we are netting more through them than we would have had we managed it ourselves, but we don't have to do anything! Passive income is the best!
The loan was the only real challenge.

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

My wife, Crystal Ryan, was my agent. She is incredible! (and a great agent too!)
Stellar Dwellar are AAA level, STR property managers.
I DO NOT recommend NFCU for financing. Their communication was atrocious.

Investment Info:

Condo buy & hold investment.

Purchase price: $142,000
Cash invested: $62,000

Our first "Buy and Hold", Bream Ave was a clean, but severely outdated short term rental. Built in the '80's, the unit was in original condition, so was severely outdated. However, as we were looking for a vacation rental, this was on Okaloosa Island and a 3 minute walk to the beach. It was a great price and most important of all, the HOA was vacation rental friendly!

We brought in new cabinets and appliances (ya dig the cool, red, retro fridge?), salvaged barnwood flooring and custom made the countertop, backsplash and floating shelves. We also added 5/8" fire resistant drywall to the sidewalls for soundproofing. We were going for a retro, modern beach look and we reckon we pulled it off!

We custom made the high top table and the coffee table, using Peccy Cyprus wood that had been laying on the bottom of a Lousianna river for over 100 years. This wood is so cool to look at and the epoxy really brings out the colors and character of the wood. To be honest, the pictures don't do them justice!

We went live in mid June '21 and the unit just crushed it straight away! We missed out on a great spring and half the summer, but it's still bringing in great off-season numbers and we're excited about next year. Looking hard for more STR's!

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

We were finding it tough to find any good flix and flip deals. I had intended to acquire our first buy and hold later in the year but when we stumbled on this deal, we thought it was too good to pass up, so we pivoted.

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

We went to Destin to look at a property that had incredible AirBnb rental history. We were going to put in an offer but on the drive back to FWB, started debating the impending ordeal of dealing with summer traffic to turn over the property (at that point, we were going to manage it ourselves). We looked up the MLS to see if there were any similar properties closer to home on Okaloosa Island. We found this one and we quickly got it under contract, at a little over asking, as it was the last one.

How did you finance this deal?

25% down through Navy Federal's commercial department. They were busy but the process was unnecessarily dragged out an extra 30 days. As the market was going crazy, the Seller could have easily denied our repeated extensions, so it was very stressful. We also lost 30 days of summer income, so I won't be rushing back to them for another loan anytime soon!

How did you add value to the deal?

The condo was built in the '80's and had never been updated. So we gutted it and updated everything. My wife did a fantastic job on the decorating and we built some custom-made furniture. We added some unique features, like the red retro fridge to give it a kind of rustic, but modern beach look.

What was the outcome?

The unit is crushing it and the reviews have been outstanding. We're on target for a 37% CoC return!

Lessons learned? Challenges?

We were going to manage it ourselves but ended up going with a young couple that are super motivated, aggressive and up to date on all the latest technology. Their 20% commission is worth every penny and we are netting more through them than we would have had we managed it ourselves, but we don't have to do anything! Passive income is the best!
The loan was the only real challenge.

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

My wife, Crystal Ryan, was my agent. She is incredible! (and a great agent too!)
Stellar Dwellar are AAA level, STR property managers.
I DO NOT recommend NFCU for financing. Their communication was atrocious.

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $290,000
Cash invested: $180,000
Sale price: $690,000

This 2,750sq ft home on the Santa Rosa Sound had been severely let go, but we could see enormous potential. It was also going to be at least a 2yr project, so we decided to live in it while we remodeled. The original design severely obstructed the view of the water and we wanted to open up the space and make the most of those amazing views! We opened it up, reversed the master bedroom and bathroom and updated everything else. My investor was very happy with his ROI of 18.35%!

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

I could see huge potential because of the location. The chance for my family to live on the water while I fixed it was a huge incentive, as was not having to pay capital gains once we'd lived in it for two years. It was also a huge challenge, that I was eager to take on.

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

My Realtor, Jen Purdy of Coldwell Banker, brought it to me. It was listed on the MLS. My analysis on what I thought I needed to spend for repairs and what I thought I could get for ARV told me the price I needed to get for it. We were able to negotiate down $40,000 to get that price. We ended up adding to our original renovation plans and spending more, but we also sold it for a lot more than I first anticipated, so it worked out.

How did you finance this deal?

A friend loaned me the money. I was very uncertain about how long it would actually take, so I did not want to pay interest and worked a deal with him where we would split the profit 50/50. It worked out for me as I would have paid a lot more had I done traditional hard money financing. My friend also did really well with his 18.34% ROI, so we were both happy.

How did you add value to the deal?

By opening up the inside and reversing the master bedroom and bathroom we opened the house to the stunning water views. The sunsets from October through February are truly incredible. The location has some extremely unique characteristics that were not being exposed before. Obviously updating everything also added value.

What was the outcome?

It took longer than I wanted it to and was a huge undertaking, but I felt I rose to the challenge. The experience of living on the water was everything I dreamed it to be and it has only increased my desire to end up there permanently. This house has a special place in my heart.

Lessons learned? Challenges?

1. That while there is a certain satisfaction in doing everything yourself, if you want to make a living out of flipping houses, there are much better ways. While I was there I learned of the many different organizations that offer education and systems (Biggerpockets for one) and that you shouldn't be cynical about them. Educate, educate, educate!
2. Strive for perfection, but accept that you are not likely to achieve it, and be ok with that. A life lesson I am still learning.

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

Jen Purdy, Coldwell Banker, Fort Walton Beach, Fl. Jen is undoubtedly one of the best Realtors in the area and an absolute wealth of information.
Meade Law for Title.

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $290,000
Cash invested: $180,000
Sale price: $690,000

This 2,750sq ft home on the Santa Rosa Sound had been severely let go, but we could see enormous potential. It was also going to be at least a 2yr project, so we decided to live in it while we remodeled (it took 2.5yrs). With original design features that severely obstructed the view of the water (not to mention, that the yard was so overgrown with pine trees, you couldn't see the water anyway!), we wanted to open up the space and make the most of those amazing water views!

We set about opening up the internal space, removing internal walls and doors in the kitchen/living area and reversing the master bedroom and bathroom. Updating everything inside, we added some custom made features like the tabletop, faux beams and mantle made from peccy cypress reclaimed wood. We now had panoramic water views from all the major rooms in the house. Outside we cleared the pine trees and brush, raised the sea wall and landscaped a beautiful backyard to enjoy the $million sunsets! From the outset our investor was happy with the business plan and long hold time and more than happy with his ROI of 18.35%!

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

I could see huge potential because of the location. The chance for my family to live on the water while I fixed it was a huge incentive, as was not having to pay capital gains once we'd lived in it for two years. It was also a huge challenge, that I was eager to take on.

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

My Realtor, Jen Purdy of Coldwell Banker, brought it to me. It was listed on the MLS. My analysis on what I thought I needed to spend for repairs and what I thought I could get for ARV told me the price I needed to get for it. We were able to negotiate down $40,000 to get that price. We ended up adding to our original renovation plans and spending more, but we also sold it for a lot more than I first anticipated, so it worked out.

How did you finance this deal?

A friend loaned me the money. I was very uncertain about how long it would actually take, so I did not want to pay interest and worked a deal with him where we would split the profit 50/50. It worked out for me as I would have paid a lot more had I done traditional hard money financing. My friend also did really well with his 18.34% ROI, so we were both happy.

How did you add value to the deal?

By opening up the inside and reversing the master bedroom and bathroom we opened the house to the stunning water views. The sunsets from October through February are truly incredible. The location has some extremely unique characteristics that were not being exposed before. Obviously updating everything also added value.

What was the outcome?

It took longer than I wanted it to and was a huge undertaking, but I felt I rose to the challenge. The experience of living on the water was everything I dreamed it to be and it has only increased my desire to end up there permanently. This house has a special place in my heart.

Lessons learned? Challenges?

Lessons Learned;
1. That while there is a certain satisfaction in doing everything yourself, if you want to make a living out of flipping houses, there are much better ways. While I was there I learned of the many different organizations that offer education and systems (Biggerpockets for one) and that you shouldn't be cynical about them. Educate, educate, educate!
2. Strive for perfection, but accept that you are not likely to achieve it, and be ok with that. A life lesson I am still learning.

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

Jen Purdy, Coldwell Banker, Fort Walton Beach, Fl. Jen is undoubtedly one of the best Realtors in the area and an absolute wealth of information.
Meade Law for Title.

I am trying to buy an investment condo for vacation rentals. When my offer was accepted, the Seller's agent sent a list of approved lenders, which included Navy Federal, who I had a personal account with. They had the best deal, so I changed and went with them. Time is of the essence does not seem to apply to them as they are completely unresponsive and when the loan officer does reply, she doesn't know anything (classic person in the middle). It's been 50 days, we're supposed to close tomorrow and have already extended once by 23 days. They've had the appraisal for over a week, but it's still "under review". They also now have a problem with the HOA's flood insurance not being enough, even though they've already loaned on two other condos in the building. In this market, the Seller has good reason not to extend again and just put it back on the market. If I lose the deal, do I have any recourse against the bank?

I watched their webinar last week. I've been going through it since and it has more holes than Swiss cheese. A lot of the math doesn't add up.

1. Brian says in factory module is 90% of cost, with 10% onsite, yet, slide 84 says $190 total cost with $105sq ft for modules (which is 55%) and $85sq ft for onsite (45%).

2. You then add 25% profit for a total sq ft price of $237.50. I live in the Florida panhandle and even though lumber has skyrocketed, new 2000sq ft homes, land, and everything included are still being advertised for $145sq ft. I know this market is a lot cheaper than most others in the country, but they're not going to sell homes here for that price.

3. The 170,000 homes in their "being negotiated" pipeline for the panhandle really intrigued me. Less than 800k people live in the 4 biggest counties in the panhandle. 17k homes would be a lot for this area, 170k is just ridiculous. There are not enough people here to live in them, let alone the infrastructure to accommodate them if there were enough. 

4. 170k homes at a maximum yearly build rate for a factory of 2,000, would take 85yrs to build. 

5. At $50k profit per home, it would also profit $8.5billion. Enough to build factories all over the world, yet there's no mention of building one here if this deal gets signed off on. Jacksonville is 5hrs away and would equate to $2,700 in transport costs for one module. They also don't mention the cost of the crane at any point.

6. The Hemet, CA, factory is still on a slide (73) but was not mentioned at any point in the presentation. What's happened with that factory?

7. For the Jacksonville factory, they are supposed to break ground in May and finish in December. Yet Brian says they will pay back investors in this factory from revenue in 2021 (which would be one month's worth). They would be lucky to be paid back in 2022, with the factory running at capacity.

8. They also make it sound like building in factory and transporting will have no problems. To use a Tesla comparison, Elon Musk went through "production hell" with his first factory. These guys are talking about building 20+ factories without building a single product yet. A legit enterprise (like Tesla) would build a factory first, iron out all the production problems and then start building more factories around the country. If they ever do actually build a factory, they will definitely have "production hell" when they first start pushing out product.  

There are a lot more examples, but I think I've said enough already. It's actually a pretty unprofessional webinar that a good proofread and a calculator could tidy up a lot. The fact that they didn't bother says a lot about how thorough they are. 

I wish S2A was a viable company to invest in, but the math (and a lot else) says it's not.