All Forum Posts by: Gunnar Teltow

@Richard F. thank you! I thought so too. That door is much nicer than the one on my own house :)

@Chris Winterhalter you're right North County is very granular, and certainly not a growth hotspot. We'll be keeping a close eye on rental rates and vacancies, but for now we haven't had issues with either of those even in the cheaper areas like Riverview, Normandy, and Berkeley (we will not buy anything in Castle Point, but that's about the only place we really don't like at any price).

Most of these rentals will pay back all equity within 6-8 years (even if not refinanced) and after that it's pure profit for as long as people are going to be around to rent in the area, which will be a long long time because nothing ever seems to change quickly in St. Louis.

@Ryan Dossey you live in a great metro area for cash flow investing! A good strategy might be to look for a nice duplex (not necessarily North County) and live in half of it. The $50k limit only applies for loans from B2R, FirstKey, Colony etc. Those shops won't do a loan smaller than $500k, and some of the terms will not work for a new investor like yourself. Your best bet may be to go to your local credit union or bank and see what kind of loans you may be able to get for an investment property. Good luck!

After talking to a few potential lenders, it looks like they all require a $50,000 minimum property value for it to be eligible for financing. So we had to move upmarket (such as it is) in North County!

Instead of buying $30,000 houses that rent for $700, we're now buying $50-60k houses that rent for $1,000 or so. The tradeoff for the weaker cash flow is better quality tenants and some appreciation potential. Here's what $60,000 will buy you (closed on it last Friday):

• 9638 Chicago Heights Blvd, St. Louis, MO 63132
• 4/2
• 1,560 SF
• rented to a quality tenant with two cats for $995/mo., which is about $100 below market but she would like to stay and has been great with upkeep and timely rent payments
• $57,786.45 per HUD-1, plus some commissions to my local agent and the inspection
• even with all-equity, this is a great investment property. After financing, it will become a cash cow of epic proportions.

This deal came to us because a large private equity shop backed out of the contract so we stepped in. This is unit #31 in our portfolio. The point of this post is to encourage everyone who is thinking about it but hasn't pulled the trigger: get started, get out there, and the deals will start finding you :)

@Ben Gibson we own 31 units in North County so I'm familiar with that market but can't speak for worse areas like North City. A total wreck in North County (depending on the area) will go for $12-15k these days. After that, your rehab will depend if you do it to owner or rental standards. Owner standard for a house this cheap wouldn't make much sense per the other posts in this thread, which I agree with, because you will not find an owner-occupier buyer.

A rental rehab will cost you around $15k for a very bad one that needs all new systems etc. After that, you have a house that cost you about $30k all in and that you can rent for $600-750 or so.

As an investor, somewhere in there could be $2-3k spread for you to make as a wholesaler.

I'm buying in the slightly better areas of North County right now (Florissant, Ferguson, Hazelwood) but a lot of our units are the ones described above. They make great cash flow investments especially when financed (but will likely not appreciate much if any).

Hope this helps!

@Ryan F. we've done about twice cash value but less than replacement (around $60k on units we bought for about $30k). On next renewal I'll probably just do cash value to protect the capital invested.

@Matt Inman thank you very much for the referral, I will definitely check with Sean on the next renewal. Insurance isn't that much per property however if you can shave off 50 bucks with the same limits it adds up quickly on a portfolio.

Hi Ryan, welcome to BP! We own 30 units in St. Louis and they're all insured with Shelter. I deal with Mike Finney and he's been great to work with. Good luck!

Hello all,

We'd like to put another $700k or so into St. Louis rental properties and are looking for the following:

• SFRs in Ferguson, Florissant, Hazelwood etc.
• $40-60,000 all-in (rent ready)
• will rent or rented for $800-$1,100
• Already rented or rent ready is preferred however I'll look at rehab opportunities as well

If you have anything like that in your inventory please send it my way. Cash buyer and the only required contingency in the contract will be for inspections. I'm not an intermediary so we can close quickly and without hassle.

Thank you!

Gunnar

Ideally:

• Total spend of $1-1.5 million
• ~30-40 SFRs
• ~$35,000/month in gross rents
• some vacancies ok
• Section 8 ok
• seller financing not needed but considered a plus (=higher price paid) if available
• we will close quickly for cash and refinance later (no financing contingency, no underwriting delays)
• only contingency will be for inspections
• finder's economics will be protected even if the portfolio is not under contract. We will make sure finder is well compensated (at closing) and incentivized to find more properties for us in the future

I will look at smaller pools as well but I'm mainly interested in an opportunity to deploy a good chunk of equity in one go and obtain leverage from a lender like B2R, FirstKey, or Colony post-closing.

I hope this is the appropriate area of the site to post something like this. Thank you!

@Sarah Seaton thanks for the best wishes. I agree, people don't give St. Louis much credit but it has a few things going for it and while not a boom town like Austin it's not in decline either as far as I can tell.

I used to live there for a few years before moving to Austin. We lived mostly out west (O'Fallon, Wildwood). I've been back several times since I started investing there. I buy the properties after having them evaluated by people I trust and seen pictures, then I make sure I stop by every other month or so to actually see them, visit with my team, and look for new opportunities.

Never heard of Pruitt Igoe but I took a tour of North City last time I was there and boy is it different from North County! I felt comfortable stepping out of the car but I didn't whip out my Nikon to take pictures like I usually do. Too many questionable characters around. I did love Crown Candy though!

Sounds almost the same, right? Not according to CrimeReports.com (North St. Louis City incidents in the last 5 months):

And here are the same data for North St. Louis County:

Out of town buyer beware!