All Forum Posts by: James Wilcox

Quote from @Monish Anand:

Hi everyone, I am having some serious anxiety and dread about a property I bought here in Louisville, Kentucky. If you are a local investor I would love your insight. 

It is a 4plex on E Oak St and highway 61 Shelby Park area. I did not realize how the Shelby Park area was before buying.

I am sinking money into this and am struggling to get handymen to get this live. If you are curious what happened to the units I can share the story, but they were in bad condition. 2 tenants left. 

My plan is to airbnb the units since I am in commercial zoning. However what I always like to have is the backup plan to LTR in case airbnb demand goes down. But my concern is LTR in Shelby Park - will I just get terrible tenants like the person who owned this before? is it impossible to find good tenants in this area?

my interest rate was 8.875% and mortgage monthly is $4000. I need to generate that to break even. I feel stupid for investing in this property. I have so much anxiety I’m considering just getting out of it with some kind of short sale. 

someone tell me whether I made a mistake and should keep going or sell it in the summer and get out. I am worried about being able to survive a possible downturn 

@Monish Anand like @Chris Seveney said probably if the LTR has concerns STR won't do well either as your ratings may kill future bookings. I would look to MTR as that would help boost your income and help carry your higher debt service costs. You will still have upfront furnishing cost but they will be less than going the STR route. As @Rob Bergeron said rent as STR during certain event holidays to boost your income overall. I will defer to his expertise in the Louisville market and not comment on the Shelby Park area.

Quote from @Andrew Self:

@James Wilcox understood James. I appreciate the feedback. My main concern is that I was very interested until what I heard from GC and realtor made me think it was only worth the land as a teardown. Obviously the realtor knew this was not the case since they pursued the property themselves and remodeled. And yes, it would be much different if they told me they planned to put in an offer if I was going to pass. This would've opened the conversation up more and had I know the information he withheld from me at the time, I would have made that same offer. At the end of the day I passed because of bad information and I regret that. But, a on some that's held to a higher standard as a realtor should provide that full disclosure rather than intentionally withhold information to their own gain. Anyways, I appreciate the feedback. 

@Andrew Self you're assuming information was withheld just because the property was renovated instead of torn down. There are too many variables to say that you are mislead for sure. It’s possible that during due diligence, they found it could be salvaged. Also, you mentioned two people gave the same feedback which are independent of each other already. You make decisions based on the information you have, for sure, but you could’ve always sought a third opinion or figured up the renovation cost yourself. Did you ask the agent or GC why it was renovated instead of torn down directly? 

They may have just been trying to set expectations, especially given your lesser experience. Maybe their intention was to highlight it as a major project and make sure you were truly ready to take it on. If you had went forward or showed more interest than more digging in could have been performed.

@Andrew Self I’m a Kentucky real estate agent and investor, so I understand both perspectives here. First off, I’m sorry you’re feeling this way. I can see how it might feel like a betrayal. That said, you toured the property with your own GC and ultimately decided to pass. Once that decision was made, what happens with the property afterward isn’t really your concern.

If it were me, I would’ve given you the courtesy of a heads-up before moving forward, just to maintain transparency and respect. It’s not required, but it’s a professional courtesy that helps keep relationships intact. Communication is always key. Your agent did put your interest first by giving you the opportunity to put in an offer first and setting up your showing.

As for the listing price and reno budget, that’s also outside your control. There may have been changes to the budget and they may have partnered with the GC on the property. There are too many variables to say for sure. Also, the list price is just a starting point, and you don’t know their costs or profit goals nor what the property will actually sell for in the future.

I always advise clients, if a property doesn’t work for you at the asking price, make an offer at the number that does make sense for you. You never know how a seller might respond once a formal offer is on the table. If you had made the offer that was similar to the agents you maybe the one with that property now and not them. Just toss it up to a learning lesson in remembering that time is always of the essence and offers are first come first serve.

Quote from @Ken M.:

Quote from @James Wilcox:

Quote from @Jay Hinrichs:

going to be a run on Kentucky..

It has slowed in some areas no doubt. in other markets my clients as long as its a clean BRRR home well priced sells within 2 weeks and thats in multiple states I fund in..

Interest rates I believe is a big driver.. And what I think is happening is when they started to go down folks who were contemplating moving were getting ready to launch only to have them raise back up and now they are staying put again.. I think alot of folks were just wanting to pull the trigger once rates came down into the 5s  since that did not happen.. U see this big slow down.  WE have to keep in mind not everyone is a first time buyer with no money.. A huge amount of homes in the us something like 30 to 40% are owned free and clear.. So its a mental as well.

I agree with @Jay Hinrichs. I've said it before and I'll say it again, getting the pricing right from the start is key. Properties that are priced correctly out of the gate tend to sell quickly. Even NAR has pointed out that after two price drops, the chances of a sale happening drop significantly, and I've definitely seen that play out firsthand. I've still had multiple-offer situations when the pricing is spot on early, but if you start out even slightly too high, it becomes much harder to sell later. Buyers have always been picky, but right now, they're especially cautious and maybe rightfully so.

Also, send all those Kentucky buyers my way, y’all! 😄

Kentucky looks hot!

Hotter than a bonfire on a bourbon trail night! :)

Quote from @Jay Hinrichs:

going to be a run on Kentucky..

It has slowed in some areas no doubt. in other markets my clients as long as its a clean BRRR home well priced sells within 2 weeks and thats in multiple states I fund in..

Interest rates I believe is a big driver.. And what I think is happening is when they started to go down folks who were contemplating moving were getting ready to launch only to have them raise back up and now they are staying put again.. I think alot of folks were just wanting to pull the trigger once rates came down into the 5s  since that did not happen.. U see this big slow down.  WE have to keep in mind not everyone is a first time buyer with no money.. A huge amount of homes in the us something like 30 to 40% are owned free and clear.. So its a mental as well.

I agree with @Jay Hinrichs. I've said it before and I'll say it again, getting the pricing right from the start is key. Properties that are priced correctly out of the gate tend to sell quickly. Even NAR has pointed out that after two price drops, the chances of a sale happening drop significantly, and I've definitely seen that play out firsthand. I've still had multiple-offer situations when the pricing is spot on early, but if you start out even slightly too high, it becomes much harder to sell later. Buyers have always been picky, but right now, they're especially cautious and maybe rightfully so.

Also, send all those Kentucky buyers my way, y’all! 😄

Quote from @Ed Troyano:

Hello, I'm looking to connect with a good property manager for a single family STR in the Lexington area. Hoping someone can share a contact and there experience with a good Manager

Thanks

@Ed Troyano DM me and I will let you know who I use.

Quote from @Mark Buckingham:

Hey - We are buying a STR in the Red River Gorge area (Cliffview specifically). Any suggestions on cleaners? If anyone has an STR there they manage, I'd love to connect as well.

Best, Mark

The HOA should be able to point you to managers already working in the area. I also work in the RRG market and have STR properties there. I use a third-party property manager.

Quote from @Nigel Ford:

I am trying to sell this property in Lexington ky, i know its a buyers market right now but i would appreciate some input on how i can get it sold faster. What price would be best if its mispriced?;

993 celia ln lexington ky 40509

Thanks, Nigel

@Nigel Ford as I mentioned, you might be a little out of step with the current market for this property. I’d also disagree with calling Lexington a buyer’s market. It’s more balanced right now, and by the technical definition, it’s still a seller’s market. As much as I enjoy BiggerPockets and the forums, this is really a conversation you should be having with your agent.

Quote from @Ferdinand Yambao:

@James Wilcox Thank you. I am well aware of the class structure and pitfalls of renting to a weaker tenant base. I plan on buying and holding for a few years to build up any type of equity and cash flow. I need to start from square one before I take on bigger projects and properties. 

@Ferdinand Yambao if that's the price point you need to start at, then so be it. Just keep in mind that neighborhoods like that typically offer little equity growth and likely won't generate much cash flow in a few years. I had my first investment SFH reappraised last week in a B-class area of KY. It went up $5K since the 2021 appraisal and has been consistently rented at market rate. I wouldn't buy it by my standards today, but I keep it as a reminder of where I started and to stay active in the local landlord association.

Quote from @Ferdinand Yambao:

Hello everyone, I am currently thinking about investing in a property in Louisville Kentucky and would like to know if this is a good starting point?

@Ferdinand Yambao as others have said, Louisville is a street-by-street market and not for the faint of heart in certain areas. If you're looking at a $100K house, it's almost certainly a D-class property. If you're comfortable with that tenant base, it could work for you but keep in mind that not all property managers will take on those types of rentals. Personally, I prefer properties with stronger appreciation potential, but if that’s your starting point, you work with what you’ve got. Just know that D-class properties often come with more headaches than they're worth, in my opinion.