All Forum Posts by: Jacob H.

Unless the property is newly renovated inside and out and the rent is at the top of the market for those units, there's always a way to increase income from rehab and improvements. We've updated a number of units and were able to increase the rent a lot just from that. Electricity is paid for by the tenants but we pay for the water. We charge them each month for water as an additional charge on top of the rent. With this, we aren't decreasing expenses, but just increasing the rent.

As far as expenses, we've found that nickel and dime expenses are killing our overall COC return and NOI. We are to the point where we are spending a lot on capital expenses with new HVACs and water heaters so we can avoid continuing to repair these units each month. In the long run, this will reduce our expenses and improve the NOI.

We found ourselves in a similar cycle of goal setting/planning prior to pulling the trigger on a purchase. Every time we started finding ourselves spinning the wheels and not getting anywhere with the current strategy, we'd try to come up with another one.

Eventually, we decided to pull the trigger and over time, we took advantage of additional opportunities within the endless possibilities of RE investing. Our original strategy and goal setting has adjusted since then based on what we've experienced and learned as being successful. My advice would be to have your strategy and purchase a property that will conform to it. From there, you'll adjust your strategy and goals based on how well it works for you. Don't get too held up on your plan (which will likely change as you go).

I suppose the latter option is not investing in real estate or another similar form of investing which produces like returns, and placing the money in a savings account. In that case, rather than just keeping up with inflation, you'd be in the negatives. Plus, this is only looking at the value of the property and not considering the cash flow that is made and can be contributed towards another property.

My partner and I decided to combine our capital together and find something that needed some value add. We found a 14-unit that needed quite a bit of work, had a lot of room for rent growth, was a pocket deal not on the MLS yet, and had just fallen through when the other buyer couldn't get financing. A lot of things aligned for it to happen but the important thing was that we knew what we were looking for, combined our capital together, and had a broker looking for deals for us. As soon as one came up that met our criteria, we took it.

This was our first investment property so as others have said, you can just jump right on in. I will say that we have learned a lot and made plenty of mistakes throughout.

As long as there is a decent amount of demand, you have more options. We always found that month-to-month leases were a good opportunity to increase the rent above market rates. This can be used as leverage to get them to sign a 12-month lease. If they are set on going month-to-month, they'll just have to pay more. If they decide to move out, you can find someone else pretty quickly as long as the demand is there. 

Depending on demand and how quickly you think you can get it rented if they decide to vacate will be a determining factor in how much the month-to-month rent will be.

I'll be moving to TN this summer and was looking to do STRs in the area as well. If Nashville is so difficult with STR restrictions, are the surrounding areas seeing any popularity like Hendersonville or Clarksville? If there are far less restrictions but it's still close enough to Nashville, it may be more worth it as long as a comparable property isn't as expensive? I know it's not the same as downtown Nashville in terms of location desirability but the properties are likely to be a lot cheaper on the outskirts as well.

As someone else already stated. We opened an Axos business checking account back in 2020 and have been happy with them since. They are 100% online and have been easy to work with. One of the biggest things we respect about Axos is that when everyone else was saying "no" due to us being a series LLC or lost our interest for having astronomical fees, Axos said "yes" and we haven't paid any fees.

Relationships with local banks are always recommended but we talked to a lot of them too. Axos still ended up being our best bet.

Airbnb provides liability insurance and you should reach out to your homeowner's insurance company to get the details on your current liability insurance limits and coverage. I had a conversation with my insurance company about the Airbnb in my basement to make sure everything was squared away in the even there was a liability claim. Additionally, I purchased umbrella insurance if a guest was to sue and I end up being responsible for any damages on top of the liability coverage from Airbnb and the standard homeowner's insurance policy. 

I'm not an attorney and can't speak for exactly what you'd be liable for people can sue for any and everything they feel they've been wronged for. In my opinion, it's good practice to cover yourself as much as possible, regardless of how safe you think your space is.

As others have already mentioned, the importance of the strength and quality of your team can not be overemphasized; I've learned this the hard way. Until you have a strong PM/realtor in the area that you trust with your money, I would avoid getting into a huge project property. Cosmetic only shouldn't be a big issue even with a weaker team but if there are large renovations, you want people there that you know you can trust. 

Since it sounds like you are just starting, I would personally purchase a property that doesn't need as much work. Yes, you'll pay a little more and the return may not be as high but you're probably going to save yourself a lot of heartache as a new investor. You'll learn a lot about investing, and working with your team. Adjust your strategy from there based on what you learn.

We've bought a couple of properties across the country now and are under contract for another right now. We've made some mistakes and learned hard lessons. How you do it really depends on the type of property you're looking at, the location, and if it's competing in the crazy hot market like many cities right now.

You'll want to find a good realtor and get them on your team. This realtor schedules a time to walk through the property and does a live video stream or records and sends it to you for an initial look. If it sucks, you back out. If it's good, you continue to the next step of putting under contract. During this time you are in the due diligence period. Make sure the contract dd period is long enough for you to schedule and review the inspection report from a licensed inspector and is long enough for you to travel there to look at it in person. (If the market is crazy hot, you can always put it under contract first, then have the realtor do the initial walkthrough, followed by the inspection and your own personal visit).

Why does the dd period need to be long enough for all of this? So you can get your earnest deposit back if you decide you want to back out of the purchase due to major issues with the property, or you just don't like the look in person. You could also try to negotiate repairs with the seller.

Regardless, you need to see it in person before you purchase it. Trust me. Videos don't do full justice and inspectors breeze over things like cosmetics, in many cases. If you don't see it in person yourself, you're taking a bit of a gamble.