All Forum Posts by: Jeremy H.

What do you all think of the insane "appreciation" of STR type units in popular vacation areas...think anyplace with a beach, smoky mountains etc. Crazy to look at the prices from 5-6 months ago and see a 20%+ increase in the asking price. Places that were selling for 290-350K are now asking 450k+. I have several LTRs where I live and was looking to get into the STR market. But I see some crazy price "appreciation" along with interest rates that are several points higher than what we saw 6 months ago...and it has me wondering if it makes sense right now. I'm sure deals are still out there, but a year or two ago you could've bought any STR, just about, and cashflowed it nicely (I was starting in RE about a year and a half ago - have a duplex, fourplex and 2 SFHs). I believe it's still early in the market for STR rentals overall, and these prices may go up. But at the same time I'd hate to be caught holding the bag on an "overpriced" property. What are your thoughts on the STR market and these high prices? Do you see these prices coming down in the near term or just leveling and seeing a slower appreciation?

I wouldn't mind still getting a STR but with more LTR cashflow. Although I think the risk level with STRs is much higher financially.
 

Quote from @Nick Coons:

Quote from @Jeremy H.:

Still, we are talking 1.4 properties a month (minimum), from getting past the learning curve to - finding the deals, managing the rehabbing, financing, hiring employees, getting prop management in place etc - on more than one property a month from beginning to end.

Unless I missed something in the OP, I don't think "unit" equals "property" in this case. It could just have easily been about one 20-unit property per year. Still impressive, but not the same as acquiring 1.4 properties/month consistently for years.

Sure, I'll admit I used "unit" and "property" interchangeably, however, this is a moot point for the discussion. 

There's a couple things here that make it hard for me to understand - (1) started buying multifamily in college (earning meaningful capital while in school full time...high paying job of some sort? 99.9% of college kids are broke even if attending on scholarships), (2) working for a few months at a full-time job and quitting to go back and invest full time. 

I am just struggling to understand where the capital is coming from to be able to find & buy properties, manage & fund the rehabs, finance the properties, manage them afterwards and accomplish all other related activities on one's own. This is incredibly difficult to do in that time frame without a very high earning job or outside capital. This is the piece of the puzzle that is missing for me. 

One you have partners things change. But when you're out there on your ow things are much different. 

I am in the process of doing my RE salesperson license through ProEducate - paid $115 for the course. Fairly straight forward class - completed the online certificate portion in about a week. Now time to actually study the material for the real tests 

I did exactly this - bought first home for 130K (3.5% down), lived in it for 4-5 years and refinanced at 118k for a 30 year conventional low interest loan. I had to switch lenders (way better rate) so I had to pay full refinancing costs again (closing costs vs monthly savings will break even in slightly under 2 years) but it reduced my monthly cost by $190. Easy to rent the house out with great cashflow now. 

If I would've rented it out prior to refinancing it basically would've broke even. 

You have options though - with low interest rates I'd personally take the money out for cheap while you can

Quote from @Axel Ragnarsson:

@Jeremy Horton I totally agree, it’s hard to outline exact specifics in one post though, haha. I started learning about RE when I was 18, bought a property at 21. With that said, 6 years is a very long time - you can do quite a bit in 6 years if your singular goal is to scale and build a portfolio. All it is building a lead generation machine that feeds you deals, then creatively structuring them. I’ve seen people grow a portfolio of 100* units in 2-3 years, it’s more than possible

6 years of intense focus and dedication is a long time, this is true. Still, we are talking 1.4 properties a month (minimum), from getting past the learning curve to - finding the deals, managing the rehabbing, financing, hiring employees, getting prop management in place etc - on more than one property a month from beginning to end. Throw in full time school (no access to any meaningful capital until a couple years after graduating) or a full time job (which most people will need in order to access any sort of capital) and you end up with an extremely atypical experience that is hardly replicable. 

I think a big part of the picture here may be who someone knows and the capital they have access to. The market they live in is a major factor as well. 

It is truly fascinating to me how people accumulate tons of properties fast or even start these major companies that grow exponentially. I'm not doubting you at all - I believe you. I would actually love to hear the details in the beginning, how you started out and accumulated maybe your first 30 properties. Do you invest in anything else mutual funds, other companies etc?

Good points, but I always read these, clickbait titles if you will, with a grain of salt. 

What I would rather hear, is how you personally raised the capital and got the systems in place to own/manage/finance 100+ units with a maximum of 9 years experience (assuming you started at 18) or less if you went to college (and graduated at 22), then it'd be 5 years. I mean getting the education, making the money to buy/rehab/finance, and the systems in place to manage all that on your own, in 5 years or less, is truly the feat here. 

When you start to work in partnerships - it's just a different niche than your individual investor. 

Quote from @Anthony Parsons:

Quote from @Jeremy H.:

This is a perfect example of the saying: You can lead a horse to water but you can't make him drink

There is more free information on real estate investing and RE in general than almost any other kind of investing. It sounds like you lack the confidence to actually do anything without someone holding your hand. Learn how to analyze a deal (BP 4 square method is a great way but there are many other ways), practice - now put the concept into real life by buying a property. 

Thanks, Jeremy. You are spot on-I definitely do lack confidence in the real estate investment industry.  I've owned 3 homes in the past, and one of those converted to a rental that failed because I wasn't financially prepared for renters to default.  I'm in a much better position now, I am hoping to set myself up for success this go around given my timeline to make it happen and especially given the current volatility of the housing market.  For the most part, folks have provided valuable feedback.

Thanks for the tip on the BP4 square method, it's greatly appreciated.   

Look - so the reason it "failed" is because you weren't prepared. This is not a failure but only a learning experience...and look here you are back at it. Consistent persistence, along with the proper preparation is the key. You will not "hope" to have success, you will have it. This is because you will prepare the best you can. Not every house or venture is going to work out and this is ok because you won't risk all your eggs in one basket. So you can recover and do it again but better.  Remember this **the money is made in the deal** above all you need to get a good deal and cannot change this down the road. 

Watch the 4 square method video on youtube, probably 15 mins long or so. Then watch it again. Take notes. First few houses don't need to be homeruns...only basehits to get you started. This is my favorite method - easy to remember and implement. 

Also - feel free to message if you'd like. I have no problem sending you the calculator I use (made myself in excel based off the 4 square method) and I can give you tips and things I used. I'm still new myself. Read 13 books, studied for ~6months, then bought a duplex, offmarket 4 plex and rented out my first primary residence. Keep in mind there is always more to learn and figure out no longer how long/short you've been in the game. 

My advice would be to call your lender of your primary residence currently and ask them - this will give you the answers to your specific situation. 

This is a perfect example of the saying: You can lead a horse to water but you can't make him drink

There is more free information on real estate investing and RE in general than almost any other kind of investing. It sounds like you lack the confidence to actually do anything without someone holding your hand. Learn how to analyze a deal (BP 4 square method is a great way but there are many other ways), practice - now put the concept into real life by buying a property. 

Make sure you get quoted on the type of policy you want as well - full replacement vs cash value. I have had some places quote me on the cash value policy (likely cheaper because it does not replace) if I made the mistake of not specifying the type of policy I wanted.