All Forum Posts by: Jeff Kehl

It's been 6 years since I posted this and I have to say, I now have 2 vacation rentals that are cashflow positive, a condo at the beach and a house in a mountain ski resort. One key thing is I don't manage either of them. Many people posted on here that they cash flow vacation rentals but they are self-managing. I definitely did not want something else to do... Also I don't have financing on either of them which makes it a lot easier to cash flow.

My original point in posting this was to compare vacation rentals to the standard long term rentals I was buying. Hands down regular rentals are much better investments from a pure ROI standpoint. But having access to nice vacation rentals that throw off some cash flow is pretty great too.

@Sarah Waterman I think it somewhat depends on the type of user. I have a lot of medical and non-profit type tenants that require meeting with clients that will still need the physical location at least for the forseeable future.

@Parag D. city-data.com gives a good overview but I find the data is often older. So what I would do is go there for an overview but then look at individual government sites to get the most recent data census for population, bls for employment, local chamber of commerce for industries. Also look at the local newspaper to get a general idea of what's going on in an area. Most are online these days. To do it right is a lot of work so I'd suggest just doing 1 at a time.

Also, you can get pretty good reports from the large commercial brokerages.

@Christina Vandivier most of my portfolio is smaller multi-family and sfrs and I find 6-10% to be pretty common for that. What's not always apparent is the subtle differences like lease-up fees, who keeps late charges and other add ons.

For larger multi-family as well as most other commercial I look at a lot of offering memorandums and 2-4% seems to be the range with asset management generally adding 1-2% on that.

@Holly Lucas you won't avoid any capital gains tax if you rent it out. That is only for owner occupants. Also, I would strongly discourage you from renting it for a year and then trying to sell. Likely what will happen is that you'll have to rehab it twice.

If you're trying to grow wealth quickly flipping is generally better but if you want to get wealthy over a long period of time, buy and hold is better. Decide what you're wanting to do and stick mostly to one or the other.

@Brian Hariprashad in some states you can get some of that directly from the Secretary if States website but often you have to do some extra digging from there for contact info. That's why Reonomy charges for it. So if you're finding it useful it's probably a worthwhile investment.

Why do you need low doc? That always sets off red flags for me.

@David Walkotten it's somewhat hard for me to tell that because I've been selling off quite a bit of property, but if I look at how much principal I paid down this past month on current properties it implies I'm paying off about 3.5% of my total debt in a year. That's a fairly large number because I have a lot of short duration 15 and 20 year notes and some of them I'm 8ish years into.

I think it's extremely important to keep track of your principal paydown as it can be a large part of your return in real estate. If you're a bit of a nerd like me you can actually calculate them in Excel using the PMT functions. PMT calculates the payment PPMT calculates principal and IPMT calculates interest.

@Michael Behrens It's funny, after I posted that I actually ended up going under contract on one of the NNN deals I was looking at. Not as a syndication , but for me personally. And I have to admit that there are a few value-add components. First, I had passed on this same property several years ago because it had a short time left on the lease. The person who bought it was able to extend the lease and increase the rent. I am now paying more than the price I passed on a few years ago because there is more value in the lease.

Also, you mentioned location and I think that is somewhat true. I'm partially buying this particular property because I like the location long-term. I have in mind a different use if the lease is not extended. You have to be a bit careful with this thought because you are definitely paying up for NNN properties so there really isn't much room to spend extra $ to change the building configuration.

But for me personally, I'm thinking 10 years down the road. Most people who invest in syndications probably wouldn't want to wait that long.

@Kimberlie Pekez send me a pm with an email address and I'll send you a list.