All Forum Posts by: Jermaine Chad Ingram

Stay away from section 8!!!!!

The opportunity: 
7 bed house in North Park, San Diego. 1 shared bathroom per 2 bedrooms. Large communal kitchen, living room, outdoor lounge area. I want to create a coliving community. 

The questions: 
1). What could I charge per room per night bearing in mind each bedroom shares a bathroom with another bedroom? 
2). There is an opportunity to turn 1 bedroom with its own bathroom into a communal area/extra bathroom for the community. You lose a bedroom but you gain a bathroom in case one of the bathrooms is occupied within the shared arrangement. Keep it as a bedroom or turn it into a lounge? 
3). Who would you market this to?
4). What channels would you use to market this?  

@Jermaine Chad Ingram

I agree with @Aaron K. on about this - run away from this deal!

From the expenses side, your insurance is killing you. Additionally, the home is older so more likely than not you will spend more on repairs. 

Also, the amount of cash needed for this deal is crazy considering your returns. You have to put down over 50% for the property to break even. That's 30k for an investment that won't cash flow!

Keep looking and evaluating, looking forward to seeing the next deal you run by.
 

@Jermaine Chad Ingram if you don't need a loan for this property then you have enough to afford a nicer property.  For a class properties in nice neighborhoods even in a place like California you can get 4-4.5%+ For something like what you were looking at you should be in the 8%+ range; of course this depends on the area; there are places like that in Baltimore in the double digits though at least on paper.

@Jermaine Chad Ingram, first off, your expenses look very high. Vacancy is usually ~8%. CapEx and Repairs 15% combined. Your insurance number is bonkers. Probably 5-10X what you'll actually pay. Have you spoken to a local insurance agent?

If this place sold for $19k in April, why is it worth $50k now and $60k after just a little work?

Are you planning to put any financing in place? Not the best return on almost $60k, if not.