All Forum Posts by: Grayson Spittel

Leverage, tax advantages, benefited by inflation, able to build wealth through someone else paying that debt back, return on investment is greater than interest rate paid on debt servicing, ability to procure, and 234 other reasons. 

@Jordan Dzubak I have three rentals at Emerald Isle/Atlantic Beach and love the area. The area is very friendly to STRs and the demand is going to increase in the next few years - as Raleigh/Durham/Wake Forest and Greenville grow, as well as Virginia, I feel confident that the area is going to continue to grow as infrastructure continues to grow and it is the closest beach to the areas. 

There are a few condos, especially in the Atlantic Beach area, with very established rental histories. I personally am NOT a fan of condos and HOAs of any kind - even if they are inclusive of insurance and other services. If you are trying to keep your expenses as fixed as possible, HOAs are the exact opposite. At any point they can be increased through a special assessment, change to STR structure, change to monthly payments, inclusion of management fee, etc. If you're looking to be conservative, HOAs aren't helpful in my opinion. I'd suggest finding a SFH and managing yourself - it can be done very efficiently when you leverage technology and PM software.

Happy to help with anything if you have any specific questions about the area. 

 thanks brother! I agree - I'm a huge proponent on either (1) finding a market with a lot of regulations defined, and establishing yourself within that system or (2) in markets with decades of rental demand and supply. So far we've been targeting the latter. All the best!

@V.G Jason sure thing! Self managing and leveraging strong systems helps. One of my properties on the NC coast -

Purchase Price: 640k

Monthly mortgage, insurance, taxes - 3600/month or 43k/year. Pay cleaners ~12k in 2022. Subscriptions, software ~2k/year. 5% CapEx and 2.5% - I know the % look small, but our gross revenue is high - CapEx = 6k, maintenance 3k (we also renovate our properties upon purchase so maintenance and CapEx need is not as high). Flood insurance - $2500/year. Restocking and furniture upkeep - $2500/year.

All in ~70-75k. Now, that’s with the disclaimer that we invest more into renovating and staging the property - ensuring that we stand out from the competition and also keep our monthly expenses low.

We grossed $115k in 2022 from this property.

I think my encouragement with this is to go outside of your local market, don’t be limited to the places you’re immediately familiar. I’m not operating in any market that’s over saturated or doesn’t have a long history of a strong rental market. Also, even with the recent decrease in property values, or the slowing of appreciation, this property still just appraised for 800k at the end of 2022.

@V.G Jason all my properties are purchased since March 2020. But they are short term rentals, like I mentioned. Those numbers are absolutely attainable, but becoming harder 100%. I’m under contract on another property right now, at a 8.1% interest rate, and am still able to hit those figures.

@Tim Bee just to throw my 2 cents in… I've gone the STR route and I don't purchase anything unless I have a Cash on Cash return of 15+% and net cash flow of $1000 per door. As a few others have mentioned, when you use $100/door per LTR as your criteria, no matter if you are saving CapEx/maintenance every month, there's too little extra cash to adequately/effectively build up cash reserves, save for future large expenses, and use as a reliable income source.

All the best!

@Grant Shipman think Bruce's quote works perfectly when you live in a bubble or work in an industry that is unchanging. Bruce Lee was a fighter - the rules didn't change from fight to fight. The strategies and what worked/didn't work didn't change (as in all the sudden one fight he didn't have to start doing it on stilts). But, Real Estate is ever changing and evolving. Yes, the core fundamentals aren't rocket science like so many have mentioned. But to Joe's point - the bigger your box, the more tools you have in your tool bag, and the more opportunities you'll find where they are needed to do the job. LTRs, MTR, STRs, flips, commercial, land flipping, mobile homes, glamping, they all have their space. In REI, I'd like to be the life long learning that has practiced 10 "punches" 100 times.

@Tyler Geisler I have used gift letters twice in the past. That’s the beauty of private lending sometimes. Shop around for a broker that will let you if you’re hitting a wall with your current - brokerages have different thresholds for “risk”, different minimum loan amounts, strategies they offer/specialize in.

In regards to the down payment amount - if the house isn’t livable and you aren’t saying it’s going to be your primary, MOST lenders require at least a 25% down payment, if not more, for land deals. I’ve used a small local farm credit union, and even for them, it was tough to get 25%.

@Ricardo Llanos great resources above - what I’d suggest is finding the resource that’s most easily accessible in your market. If you don’t have a Costco or Kohls local to where your place is - don’t go buying stuff from there that will need to be restocked somewhat regularly. Unless you’re local or okay with bringing it by the place yourself. What you want is to simply be able to replace any item, with the same item, over and over. For me, my market doesn’t have big box stores, therefore Amazon and being able to order the same product and have it delivered directly to the space for my cleaner to pick up is by far the best option.

Airbnb Arbitrage in a solid market with low seasonality. Look to stage 1, potentially even 2 properties, with those funds and maximize cash flow. 100% doable.