All Forum Posts by: Elizabeth Seiferth

Could you put any money down and then seller finance the balance? IE - a hybrid like suggested above.

I am looking at a property in which I am going to see if the seller would consider a hybrid scenario. In my situation, the property has been listed for 130 days at $649k. They have a 2.9% rate on 385k which I would want to Subto. I want to keep the entry cash at about 10% of the purchase price, and will see if they would entertain seller financing for the difference (roughly ~200k). It would be a short term rental and would provide about 2k of cash flow a month versus a traditional purchase which would maybe break even 🫠. 

Or if you don’t have the 100k and they won’t entertain seller financing, you might be able to find a private money lender for the 100k!

Quote from @Justin Rush:

Hey BP,

After spending >50-55 hours of watching and researching Pace Morby's videos and training; looking to get some actual students insight on the ROI of the program. Everyone in the forums continually say, "all up to the person, made back my money and more", without ever saying how many deals they've done, what Intrinsic value was provided, etc. seeking ACTUAL results, ACTUAL deals done, ACTUAL ROI please.

For reference, I have capital, time , and a relentless work ethic. I was seeking the membership program to leverage economies  of scale and ultimate velocity of my capital. 

Want to get a last sanity check before forking out > $11,000 in the program membership. 

Any and all feedback welcomed.

Hey Justin - I was just perusing the forums and found the same - lots of people raving but no real data on # of deals done, ROI, etc. curious what you’ve decided since posting? I’m in a similar position.  

Quote from @Zarrin M.:

Hello!

I’m very new to real estate investment community (literally two months into learning via reading, joining bigger pockets), and have yet to invest in real estate, so please be kind in your response.  Thank you! 

I'm learning about all the different types of REI and house flipping seems to be the one I have the most interest in. However, I recently learned about the AB 1771: The California Housing Speculation Act that took effect on January 2023. The new bill imposes a 25% tax penalty if there is resale of a home within the first 3 years.

Link to bill: https://leginfo.legislature.ca...

Questions:

-I was wondering if anyone is aware of how much of an impact the tax penalty will have on the house flipping industry in California?

-The bill also raised a social question I have about the impact of house flipping on communities with historically low socioeconomic resources. Any thoughts on this? 

TIA! 
Tahirih 

Hi Tahirih, I’m also new to REI and live in San Diego, would love to connect if you’re open to it! 

liz

Hello! I am based in Carlsbad, CA and I am a brand new wholesaler looking to connect with likeminded individuals - investors, agents, wholesalers, etc. I've been absorbing BP and all things RE over the past few years, and am hoping to buy a STR very soon and build a portfolio. Cash flow has been very hard to find in on market deals with rates and prices right now, so I've been getting set up to start wholesaling to build more capital. Let me know if you'd like to connect!

Quote from @Timothy Hogan:

Hi all-

Crunching numbers on a STR Mammoth Lakes, CA. Posting a similar thread to the Gatlinburg thread by @Amit Sharma.

Backstory:

This would be my second door, but first in the Mammoth market. 
I currently run a 1br in Ojai, CA with nearly 300+ 5* reviews and 2022 gross of $76k.
I have systems in place and have a good handle on remotely managing an str. 
Mammoth is a hot market (despite, or maybe because of all the snow... lol). Lots of competition. 

About the unit:

1br plus loft, will sleep 6.
Needs some updating, but that is one of my specialties. 
Appraisal came in at $522k - UNDER accepted offer, which is an entirely other thread.

Competitive analysis for 2br units in my adjacent area. Removed the ones with zero rentals etc:

Avg nightly rate: $235
Avg occupancy: 54%
Avg gross rev: $47k
Top performers are upwards of 85% occupancy and $86k gross - and I've stayed in the top grossing unit. It was nothing special. 

STR analysis from Avery Carl attached. 60k ($13k higher than average) seems to be my break even with the current interest rate. Note - cleaning fees in the calculator max out at $300 total monthly, so I'd expect an additional cost here. (I believe it's a bug in the calculator @Avery Carl.)

Q: Assuming seller will agree to reduce price to appraisal value , am I crazy to think I can beat the averages on occupancy?
Q: Historically, does anyone have data for inventory in ski towns? Better to buy in summer or winter? I've heard anecdotal evidence that suggests inventory is higher in summer, however interest rates will likely be higher then too!

Any input would be appreciated!

 Hi @Timothy Hogan - funny enough I'm in a similar position. My boyfriend and I have been looking to purchase a STR in mammoth but i am in analysis paralysis at this point. We love mammoth, love to ski, spend time in the mountains but the numbers point to it maybe not being the smartest investment for cash flow. I'm curious how yours is / isn't performing and if you closed? It seems that places are still priced decently high and not falling. Given your appraisal experience, now I'm worried about that too. 🤪 would love to hear an update now that we're in peak summer months and skiing is still available!

Cheers, Liz 

Quote from @Daniel Godbout:

Join us at Booze Bros in Vista on June 30th for a casual meet up to talk all things real estate. All levels of investors are welcome!

DM me to join our local Facebook Group.

Hello! I would love to join the fb group and future in person events. 

Quote from @Scott Tousley:

Hey BP, 

No idea if anyone will even see this :) but we are looking at purchasing a 2 bed/2 ba condo in Mammoth within a 10-minute walk to Canyon, Eagle, or village gondola. 

I'm struggling to calculate a decent cash on cash return and wondering if anyone has a baseline for what is a "normal" cash on cash return in the first couple years of an investment property in Mammoth? 

I realize there are a ton of variables that go into it (quality of condo, purchase price, property management), but I'm just struggling to find any deals that make sense and I've been looking for the past 1-2 years.

Thanks! 

Scott

Hi Scott & all - 3 years later and I am in the same boat as you- evaluating and analyzing property after property in Mammoth. I’m curious if you purchased or if any of the others on this thread have been happy with the returns in mammoth? 

Quote from @Todd Rasmussen:

@Elizabeth Seiferth

Any investment path is better than upgrading your primary residence. Sacrifice now and reinvest returns. It is the only way you will see exponential growth. Also, don't consider personal preferences when you are looking for your STR. Be objective and follow the numbers. The rewards for your discipline will be substantial.

Thank you @Todd Rasmussen ! We would keep our current residence, which is a condo, and rent it out which should cash flow and appreciate given the market. If we were to find a home that we wanted to 'upgrade' to we would be looking for a place that needed to be rehabbed. In our current case, it's essentially a little bit longer term BRRRR strategy. We would look to do the same with an "upgrade" with the intent of renting it out eventually as well.

Thank you @Joel B. for your reply! I like your suggestion of removing #2 from the table since i think that is a poor long-term decision. In our current property, we were considering doing a long term rental since our CC&R's don't allow for a short term rental...but i haven't explored the mid-term rental path. Curious if you see a decent bump in rental rates for mid term stays compared to long term rentals based on your experience?

Hi all, First time posting here! My boyfriend and I currently own a condo in north county San Diego that we purchased in October 2019. since owning this property, we have renovated (all new LVT floors, upgraded fireplace, upgraded staircase, new kitchen, new bathroom cabinets) for a total investment of about 40k. The value of the property is about 300k higher than when we purchased due to the upgrades and inflation. So, we have about 350k in equity that we’re sitting on. I am adamant about investing in another property, ideally one that needs work so we can be a value add to that deal. We’re now debating between three different paths…

Path 1:

Upgrading to a new place around here that would give us our own garage (we currently have a shared garage), a bit more space but for a high price tag that would still need work. We would leverage our equity and rent out our current place. We wouldn’t be cash flowing very much based on my research but appreciation would be king in this scenario. 

Path 2:

Same as above but instead of renting our current condo, sell it to put us in a more comfortable financial position. (This is my personal least favorite solution). 

Path 3: 

Leverage equity in our primary residence for a STR in a mountain resort town in California instead. Possible cash flow of about 50k annually and a ski spot for a few trips. 😎

Would love to know if others have been in similar scenarios and which path they’ve taken or would recommend taking. 

 liz