All Forum Posts by: Paige Kelsey

Im curious why 1,000,000 is coming up for you? Follow a path. Can you get something smaller, say a live in 4 plex with a residential loan off of the capital that you have now? This might help you better begin to figure out the mult world and give you some experience as well as capital moving forward.  Then 

@Travis Salley know that the fishing that you are doing, is a COMPETITIVE MARKET!!  There are a ton of investors out there that do this, have been doing this and will know how to do this better than you can.  Right now, I think many markets are crazy competative. Here in Vancouver,  multis might be on the market for 2 weeks if that. Most are gone before they are ever listed and I woud not in any way say they are deals.  To that end, partner. BP is a great resource with a ton of super smart folks.  Get a mentor, do the grunt work, offer yourself up to learn what they know so that then you can do what they do.

Best of luck  

All the best!

Paige

@Debbie Zimmer,I own six in Colorado Springs. Absolutely it is a great investment but this is NOT passive. As others have mentioned this is a business. As for things to think about:

+Cleaning- you need dependable cleaners and back ups - Folks will tell you they don't have a dog and bring a dog anyway. Now you have fur everywhere and a guest that is allergic to pet har checking in  2 hrs from now. This is a drop everything and go. To that end, you need cleaners that can adjust to this sort of problem or others like it. Ie- marajuana smells, washer breaking down etc etc.

+Maintenance- No one wants to have things that don't work perfectly on a vacation. Have a plumber, handyman etc that can go at drop of a hat no matter what. Don't worry, it will ALWAYS HAPPEN ON A HOLIDAY, OR A WEEKEND!! BE READY!! Also, there will be no haggling over price! Just get it done!

+Vacation Rentals- the day to day can be a killer so make sure you have systems in place for restocking  and maintain. Expect things to happen because they will. We just had a guest who thought they were checking out a day later go on a rafting trip and leave all their stuff everywhere. Meanwhile, we had another guest checking in.  Scheduling carpet cleaning, maintenance for even small things like changing bulbs,  to changing out beds becomes a calendar issue. Also, have a good way to pay for all of this. We use Zel and Venmo to pay for contractors on the spot for smaller things like snow removal.

+ Have a plan B- Will this property also work as a long term rental? Would you make money if you just sold it. Please make sure you have a plan.Just because vacation rentals were/ are allowed it does not mean they will always be allowed. For us, getting our vacation rentals licensed in the city of Manitou Springs was a SUPER lengthly process with zoning and mapping and it requires monthly rental income to be reported to the city, no this is not online. This goes WAY past checking out what things are renting for in the area, this is more about licensing the rental and knowing what you can and can not do with the property.         

+ Vacation rental companies and what they will not do and so you have to! Did you know that folks LOVE to take the pics off of homeaway and airbnb and then post your property on Craigslist. Yup, I didnt know that either until.......... someone showed up to a property telling me that they are checking in for their 4 months stay!!    I actually started to then watch Craigslist for this reason to make sure this didnt happen again. A couple of times I have called other owners and got in touch with their property management companies and have gotten a total run around to.... "well owners can post on Craigslist if they like." Thing is, that is NOT an owner posting! That is a scammer. I wish the best for the owners and those companies but seriously, super dangerous!

+ There will be a time when you want to take a cruise or go camping without great internet service. Those will be the times when you need a back up. This however, does not mean your sister in law. You CAN NOT afford a bad review for when your sister in law forgot to pick up a phone, or guests smell gas on one of your properties.  I pay 15$ a day for when I travel for exactly those things and charge that locally here for owners wanting to take a break. Get someone in the business, you do not have to pay an arm and a leg just trust someone in the business to do it right. 

Don't get me wrong, I love being a vacation rental owner  but it has not come without surprises or hard work.

Good Luck!

All the best!

Paige

@James Chung think about what you would like to go into your space. What has it been before. If you are going to try to do this yourself, then think amazing chefs in your area, where you like the food for example and offer them a great deal on a lease. This does a couple of things. It makes your place a destination. If you like their food, then chances are others do too! Soo, suddenly people have a reason to go to your retail space. Then work your way out from there. What little shops would do well with great foot traffic, rinse wash and repeat. Seek folks out!  Or,... get a commercial broker that will do the work. What I mean by that is that often folks want to put a sign in your window and hope for the best. They are advertising off of your back which is what you don't want! Hire a hungry broker willing to put in the grunt work to do what I just said. It is more than loop net. Have someone who is involved in the chamber of commerce and can talk up your space at local meet ups. Bottom line is that if you hire a big company broker, ie .......you are a small fish and your property will be overlooked. Retail spaces need to be pushed so either do the work or hire it but bottom line is the best way to do that is to actively seek out the tenants you want rather than just hope that they drop by or write down a number off the side of your building or Craigslist.         

@MikeNuss you make some valid points and I do agree with you for the most part. I agree the price should be dropped.  I don't know how to work in a ballon payment on the calculator but yes of course given it is commercial. I actually only found this interesting in that most of the time when I pencil in numbers for various commercial offerings in the area they don't come close at all. IThe thought was that if you coud get it to pencil with tje asking price then by the time you got to the actual offer tou would be good.t doesn't appear to need any work but I entered 100k anyway. My thought on the closing cost is that well everything is negotiable but yup should have put that higher. I actually talked to a lender who had those terms which is why I entered those numbers. LOL i maybe was influenced as of late by Grant Cardones latest pod cast when he talks about crains in the air and larger appartment buildings. Have you seen Vancouver lately, lots of  crains. Thanks for taking the time. All the best! Paige

This looks interesting. I entered in asking for this property as the price and did a rent comp on the units. It appears that each unit is under market rents by at least 50$. CAP rates for the area are 6.8. This property is within a mile or so to shopping centers and is in a growing market. What do you think?

View report

*This link comes directly from our calculators, based on information input by the member who posted.

As a commercial broker we hear a ton about concerns in finding a suitable property to exchange in to. If you have a property that say you had for 20+ years and you still owe say 100k to a traditional bank but it is now worth  700k, can you pay off the 100k with the proceeds of the sale and owner finance the rest 560?

2) If you owner finance, can you get out of paying back depreciation?

3) If you owner finance, can you not pay capital gains on the sale or at what point would you need to pay capital gains?   

There is a ton of building going on here in the Portland/ Vancouver area and  I know also in Denver. NO WAY is this  the height of the market.  Portland and Vancouver still are the cheapest markets on the West coast and with Seattle and San Fran continuing to climb, my guess is that we will too.  The question will then continue to be centered on supply as Interest rates rise so will cap rates on these commercial loans for the land and the building. Vancouver, WA with new rail lines,deep water ports and land might deserve a second look for overall investment in the future but the challenge of providing affordable housing options across each of these cities that are becoming less affordable to so many is real and has got to be addressed.  Bottom line, is it a bubble? No!  Is there money still to be made in each of these cities. Absolutely. However, is there a significant problem related to affordable housing in these super hot markets? YOU BET!    

I actually disagree with some of the advise you were given. just a guess but I think you like multifamily. I would go with a value add 4 plex where you are at or within easy driving distance. The goal here would be to live in one and rent out the other 3, "aka house hack". The bigger goal is not sooo much to live in it but......... getting at that mortgage is waaaaayyy cheaper than trying to go with a commercial loan. If you can get in with 3% or VA:) 0 % of a primary residence you are well on your way to 10k a month and haven't used much if anything of your 200k. Also, 200k is NOT going to get you 10 k a month. It will take you a couple steps to get there but it is a scalable and easier way to go about things so that you are not wasting you hard earned money.

As for squiring this four plex in the first place start driving the streets. Run the numbers on the calculators and get good at analyzing everything. I literally have found a house / houses on Craigslist or by just going up and knocking on someones door. Be patient, buy well, be careful with your numbers and be ready to pull the trigger at a moments notice. Good luck and yeah probably not the best idea to say how much capital you have to spend. 

Beware of sharks:) Cheers!

@Eric Martell it is still available

@Uwe G  over 20% cash on cash! If it can't do that I will convert to long term because it is more work. There are a couple of things in particular that I am doing to get that though. I self manage from Portland and have boots on the ground . In answer to either one of those companies I am not sure but I had gone with Evolve at one point. They are super professional and do a good job but they just couldn't keep up the numbers in the off season. I rent all six rentals 25 days a month in peak season and 20 days during the off season. They were down to about 8 days and or just weekend in the off season. Sure, that's great if you want to make a little money off an adu but REAAAALLLLLYYY NOT ok if you are making it your business. Like @Jay Hirichs says he would rather stay in a hotel but ....we are providing you something you cant get with your hotel points because the concierge is NO WAY going to be that good.  Soo bottom line, I only buy cool experience homes in Amazing locations and then I know everything there is to know about the area.........you want to go on a hike, here are 3 of my favorites! You want to eat out for Breakfast- perfect- here are two places and by the way.......... order this!! The local perspective is what I have an offer to guests that not everyone can do..... you are paid well for it, but it is some energy to go in.  As for the financing, I may not be the best person to ask as I bought them cash or lived in all of them moved in, fixed them and then converted to Vacation Rentals. .Someone just the other day was telling me they got an sba loan since it was their business and got 100% financing- I thought that was pretty interesting but....... it was zoned commercial 4 of my rentals are zoned commercial and I am not sure I would do it any other way across the country given the Vacation Rentals get a heavy criticism from neighborhoods. If they ban, you just lost your rental and your income