All Forum Posts by: Jason Rosser

Quote from @Nicholas L.:

@Jason Rosser

what market are you in?

PCB/panhandle for STR. 

Northwest Georgia for LTR (Ringgold, Dalton, Calhoun, etc.)

Quote from @Greg Kurzner:

Hi Jason, the thing I notice about PCB and really anywhere along the panhandle is that they are building everywhere. Supply is thus likely rising and as recession likely approaches, STR's are likely to soften as they are discretionary. Buying a rental in your area is smart in my opinion. LTR is stable versus the bigger economic swings as rent is only negotiated yearly and slower moving both up and down. While you might not see the same % of appreciation locally you might in a resort location, your cash flow will be significantly better and your risk lower. Additionally, with your available cash, you could possibly buy more than one LTR property as long as the leverage is workable.

Greg,

Thanks for the reply.  This makes a lot of sense.  We just finished building a cash flow spreadsheet so we could quickly plug in numbers of multiple properties in PCB and see if they're generating positive flow.  After finishing it (and double, triple-checking it) the "best" property--in terms of cash flow--was showing -6000/year.  Many were well over 15k/year in negative cash flow.  With the high prices, high rates (even with perfect credit) and all of the other operating expenses, it feels like we'd have to find a true unicorn to even run a break-even cash flow.  We're confident the market will continue to rise long-term (or dip, then rise) but it feels like so many of these properties are priced such that we'd have to put all of our eggs in the equity basket, and we're not comfortable doing that.

Again, thanks so much.  We will be looking at a broader field of options going forward.

Quote from @Carlos Ptriawan:

Quote from @Jason Rosser:

Hi all,

My wife and I have recently begun the process of familiarizing ourselves with 
real estate investing.  This site has been immensely helpful.  Thank you for that.  

We have long considered buying a STR in Panama City Beach. We've considered 1br on the gulf (condo) or a 2 bedroom townhouse walking distance to beach (Edgewater Golf Villas.)

We are looking in the 3-400k (our prequal number) range as an initial investment, and have been in contact with a local realtor while we work out the numbers we are shooting for (fall in love with the numbers, not the property). 

We’ve been doing research for months and learning all we can, however, it only occurred to me today that maybe we’d be better off buying a distressed property locally (we’re in north Georgia) for cash and repair and rent it as LTR. 

I keep crunching the numbers on the (admittedly limited—about 20) properties in PCB, and after accounting for expenses, I'm struggling to find anything with positive cash flow. I think a big part of this is the enormous listing prices (and the significant PITI and HOA that goes with it).

So I’d like to ask opinions on if it’d be better to buy a more modest property locally with cash, renovate it, and rent it out.  There are properties of this type available in the local area, and I’m fairly skilled at doing a lot of the work that would be required in renovating.  

I can’t help but think that the combination of rising interest rates and massive market growth in PCB makes a ~100k cash property a less risky first-timer investment.  

The flip side is that if that market continues to appreciate as it has since ~2020, we’d be walking away from a lot of equity. 

So many ways to go but we’re committed to making the best decision possible.  Much work still to do, but I am optimistic that the good folks here can throw out ideas/advice. 

Thanks for reading!

 this problem can be solved by math.

You measure the MLS activity of both location and analyze which one has limited supply of inventory, go for that route.

Just to be clear, you're saying to check the gross rental income the PCB property would bring (and calculate cash flow, ROI, etc.) and compare that to projected LTR rental income that's purchased and renovated?

Apologies if that’s not your point.  As I said, we’re in the very early stages of this and learning a ton each day.  Also, would like to understand a little more about the inventory significance.  Thanks so much!

Quote from @Nicholas L.:

@Jason Rosser

just a few thoughts on BRRRR if you pick that

-you have to buy something you can really increase the ARV on. even a 30 or 50% increase usually isn't enough. you need something that you can buy, rehab and increase the value by >100% for the process to work.

-even if you're using 100% of your own cash, there are a lot of costs that you need to factor in, that frequently get overlooked.  these include closing costs on the buy, holding costs during the rehab, and fees when you refinance.  these are non-trivial and will be thousands of dollars (or even tens of thousands on more expensive properties.)

-if you can do some of the work yourself, that's great.  just make sure any trades you need are available at the right times.  in my market everyone is booked up for weeks, months or even years.

-if you have 100K total including your emergency and life savings don't spend it all on one property.

hope this helps

Thanks for the info. 

Im familiarizing myself with BRRRR and a starting to understand the concept along with ARV and being able to increase it significantly.

I appreciate the insights on expenses, as well. My wife and I are both W2s with good salaries so we aren’t exactly scraping the funds together to do this.  We want this to be more supplementary and feel it would be better to invest in properties (once we have a firm handle on the process) as opposed to investing elsewhere. 

Ideally, we’d like everything related to the property (purchase, closing, Reno, etc) to come only out of that earmarked 100k. 

Again, thank you!

Hi all,

My wife and I have recently begun the process of familiarizing ourselves with 
real estate investing.  This site has been immensely helpful.  Thank you for that.  

We have long considered buying a STR in Panama City Beach. We've considered 1br on the gulf (condo) or a 2 bedroom townhouse walking distance to beach (Edgewater Golf Villas.)

We are looking in the 3-400k (our prequal number) range as an initial investment, and have been in contact with a local realtor while we work out the numbers we are shooting for (fall in love with the numbers, not the property). 

We’ve been doing research for months and learning all we can, however, it only occurred to me today that maybe we’d be better off buying a distressed property locally (we’re in north Georgia) for cash and repair and rent it as LTR. 

I keep crunching the numbers on the (admittedly limited—about 20) properties in PCB, and after accounting for expenses, I'm struggling to find anything with positive cash flow. I think a big part of this is the enormous listing prices (and the significant PITI and HOA that goes with it).

So I’d like to ask opinions on if it’d be better to buy a more modest property locally with cash, renovate it, and rent it out.  There are properties of this type available in the local area, and I’m fairly skilled at doing a lot of the work that would be required in renovating.  

I can’t help but think that the combination of rising interest rates and massive market growth in PCB makes a ~100k cash property a less risky first-timer investment.  

The flip side is that if that market continues to appreciate as it has since ~2020, we’d be walking away from a lot of equity. 

So many ways to go but we’re committed to making the best decision possible.  Much work still to do, but I am optimistic that the good folks here can throw out ideas/advice. 

Thanks for reading!