All Forum Posts by: Jeffrey M Rauen

@Fareed R. I do the same stuff that everyone else does with those points. Credit score, criminal report (no violant crimes or drugs), income verification (3x rent), and eviction history (zero). I also request an interview with the existing tenants before kicking off the background checks. That opens up a can of worms with fair housing laws, but also gives me a chance to make sure everyone gets along and POTENTIALLY convince prospective tenants they wouldn't be comfortable so they chose not to pursue an application.

My other way of preventing tensions between renters is to target my advertising. I've had a lot of success so far with offering rent credit for leads from the existing tenants. If that doesn't works, I post on specific Facebook boards that are tailored to the same types of people who I rent to now (mostly Disney employees)

I agree that finding deals that have potential to cash flow is a challenge here. I think the STR market is so powerful that it's driving prices up beyond what makes sense for buy and hold investors. That's what drove me to go room by room. Cost to me is higher, since I have to furnish and maintain the common spaces to some degree (lawn, carpet, ect). It's also more work dealing with tenant to tenant personal issues. I've spent a lot of time shopping for insurance that will (hopefully) protect me if things get really bad between tenants.

However, having said all that, there are advantages. With no one renting the common spaces I have access to the property frequently to meet with tenants, replace the AC filter, check to make sure we are not breaking HOA rules, make sure things aren't getting destroyed, and talk face to face with whoever is there to resolve any personal issues before they explode (see, more work!). I also think that the best case rental rate for the property as a whole is $2,400/month (with $2,100 being a competitive price). By going room by room, I'm collecting $3,300, and have to pay utilities that are ~$250-450. I also believe that I'm under pricing my rent. I tried to match the lowest cost places I could find, and I have a very nice, new home, with no rear neighbors, an upgraded kitchen, large yard, pool, and in a mid/high end neighborhood. And my price is competitive with small apartments in low end neighborhoods.

In my opinion, that added cash flow is WELL worth the effort as a new guy getting started.

As a side note, I have a large dog who is absolutely my best friend. Finding a place that allows large dogs is basically impossible around here, TRUST ME!!! Find a way to cater to that crowd and you'll likely find people willing to pay top dollar since they have no other options. Simple supply and demand.

Investment Info:

Single-family residence buy & hold investment in Orlando.

Purchase price: $298,000
Cash invested: $29,000

5 Bed 3 Bath, two story SFH in the hunters creek neighborhood of Orlando, FL

What made you interested in investing in this type of deal?

Initially purchased as a primary residence, but when I decided to downsize to minimize my liabilities I realized I could keep this property and cash flow it with the right business plan.

How did you finance this deal?

I bought this property with a 0% down VA loan. When I get to the 80% LTV mark, I plan to look at refinancing to a conventional loan and freeing up my limited VA loan limits to leverage the power of it in the future with house hacking or live in (long term) flipping.

How did you add value to the deal?

I found a few ways to upgrade the look and feel of this place on basically a shoe string budget when I was just getting started. I covered the cheap counters with contact paper to look like high end marble (~$100), framed the mirrors with trim (~$10 per mirror), upgraded old carpet to vinyl plank (

Lessons learned? Challenges?

Tenant screening is key if you're going to have multiple people living together. More than that, though, is the advertising plan. Fair housing laws aren't something that I want to mess with, and after a day of having a post on facebook marketplace I took it down and was REALLY glad no one could make the required deposit. I became very selective about my marketing plan, and offered a room for a very competitive price. So far, it's worked out really well for me. However, only time will tell....

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Kevin Boudreaux - Best broker ever. Seriously, trust me.

Investment Info:

Single-family residence buy & hold investment in Orlando.

Purchase price: $298,000
Cash invested: $29,000

Initially bought as a primary residence. After a while I started renting out spare bedrooms once I learned about the power of real estate investing, and eventually moved out to get it fully booked. Renting each room out individually definitely opens the door to more cash flow, but is not without it's issues!!! I've learned a lot about tenant screening and plan to hold this for a while, since it proves to achieve good cash flow with this model. Proximity to Disney, Universal, and SeaWorld help a lot with minimizing vacancy.

What made you interested in investing in this type of deal?

Initially purchased as a primary residence, but when I decided to downsize to minimize my liabilities I realized I could keep this property and cash flow it with the right business plan.

How did you finance this deal?

I bought this property with a 0% down VA loan. When I get to the 80% LTV mark, I plan to look at refinancing to a conventional loan and freeing up my limited VA loan limits to leverage the power of it in the future with house hacking or live in (long term) flipping.

How did you add value to the deal?

I found a few ways to upgrade the look and feel of this place on basically a shoe string budget when I was just getting started. I covered the cheap counters with contact paper to look like high end marble (~$100), framed the mirrors with trim (~$10 per mirror), upgraded old carpet to vinyl plank (

Lessons learned? Challenges?

Tenant screening is key if you're going to have multiple people living together. More than that, though, is the advertising plan. Fair housing laws aren't something that I want to mess with, and after a day of having a post on facebook marketplace I took it down and was REALLY glad no one could make the required deposit. I became very selective about my marketing plan, and offered a rooom for a very competitive price. So far, it's worked out really well for me. However, only time will tell....

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Kevin Boudreaux - Best broker ever. Seriously, trust me.

@Zach Whicker I honestly got more lucky than anything for that first deal. I house hacked and used a VA loan to get it started. Combine that with the per bedroom rental (more work than as a whole house) and that's what made it work out so far. I'm trying to find better ways to source deals so that I can maximize gains with off market properities going forward. From what I can tell, that's where the real money is!

@Zach Whicker I am pretty new to the game, but I'm seeing some good cash flow out of a 5/3 with bedrooms rented out individually. Planning to try this same formula again with a 3/2 as my next investment, but since I'm only 4 months in I'm sure I'll change my mind at least 17 more times and end up being driven by what deal I can find more than anything. Hope that help, and good luck!!