All Forum Posts by: David Dachtera

@Meredith Mihm,

It sounds like the seller may be trying to take advantage of you or doesn't full understand how loan repayment works.

A $100K loan over 30 years - depending on the interest rate - is going to have total interest paid somewhere around $120K. Your 50/50 P/I payment would be about the same as an amortized P&I payment at a fixed interest rate. So, no real benefit there unless the equity build up is somehow figured into the repayment plan. As another poster pointed out, the interest rate changes per payment.

I'd have to say no myself, but see what your attorney and accountant have to say.

My $0.02 ...

 #1:

For best protection, an LLC should have multiple members and none of them should be a human person. If your business entity structure is designed for maximum protection from liability, entity ownership should be as difficult as possible to determine.

#2:

If your umbrella policy pays out, it means someone took you to court and you lost. Your ENTIRE ESTATE is now exposed and open to discovery. May as well post your possessions on a billboard saying "Come 'n Get it!"

#3.

The LLC should be able to actually buy the property and have it transferred into the LLC's name and credit. That said, banks aren't going to incur the expense of a foreclosure as long as the payments keep coming in.

My $0.02 ...

... but, only if you can afford to pay cash for it. If you don't need a degree, no point taking on predatory, usurious debt that will hound you the rest of your financial life. 

Agreed - connect with some local people actively doing STR / MTR. It's important to note that neither of those is Real Estate investing - they're both the hospitality industry. Real estate is only one component. If the units are empty when you acquire them, you're going to need considerable financial resources to furnish, equip and supply them. Promotion (booking) is an-going expense.

Cleaning also is only one component of management. You'll have maintenance, re-supply and other issues to consider. Unlike LTR, deferred maintenance costs you in both bad reviews and reduced income.

You'll want to get into a market where you can easily travel between units. Trips will be somewhat frequent. Plan accordingly.

My $0.02 ...

Welcome to REI!

You may actually want to start with someone like Anthony Robbins in getting yourself together for this venture. There's a lot of focus and soul-searching involved in finding your life's path forward.

To prevent some issues you've faced up to this point, you'll want to decide if REI is really the best fit for you. I forget who said, "Do what you love and you'll never work a day in your life". That really fits here. Your love for it has to be strong enough to keep you going thru the challenges.

A "job in real estate"? Consider starting out working for a property management office - dealing with tenants in properties owned by others. You'll learn quite a lot based on my experiences with a PM who is also a personal mentor and my former landlord. This can also afford you some excellent networking opportunities.

Your whole paragraph of questions are perhaps best answered by yourself. I can recommend some REI education to help you; however, forum rules prohibit me saying anything further here.

Without your own financial resources, you'll want to work on establishing relationships with possible partners thru networking and other social contacts. Education can be helpful here, as well - there's a right way to do it and there are ways which can get you into trouble with the SEC.

Hope this helps ...

Thanx for that!

I looked over their website and it does not appear to be investor-oriented. Still, I wonder what they could do for someone looking to acquire a property to "house hack" ... ? 

Get the actual comp.'s and compare them to your asking price. Does the difference leave enough for acquisition costs, holding costs, reno costs, selling costs, etc. ?

Based on your post and the Redfin listing, there's no meat on bone after reno much less the other costs. So, you should nail those down first and reassess the deal.

My $0.02 ...

Agree with the others. Better pics and narrative will help a lot. You've likely already lost enough through vacancy to pay a professional a couple times over.

The agent says you can't add a bath? What about the city? They're likely to know better.

Yeah - 5 / 1 is a bit much, and at that rent, well, you'll want to do comparables on area rents.

Unless it would be a bad fit for the area, I'd go for fewer bedrooms, more family area, if that's possible.

My $0.02 ...

@Albert Johnson,

You may want to consider putting an automatic gate at the entrance(s) to the property such that if left open for a fixed period it will close itself.

My $0.02 ...

My personal preference for managing an STR or MTR would be someone / a team with hospitality experience, preferably an actual B&B or hotel / motel experience. It's a whole different "ball of wax" from managing LTRs.

My$0.02 ...