All Forum Posts by: Joe Sillaman

Drop them look for someone else! If they are unwilling to assist you by doing their job then take your dollars elsewhere. Like finding a good contractor it's tough...

Hi BP World,

I'm looking at buying a 3bd 1.5b SFR in Montgomery AL. I have 2 exit strategies…1st is Buy and Hold, and 2nd is to Flip. How does these numbers look to you?

ARV $80-$90K
Repairs $35,000
Rental Comps $800-850

Asking $34,000 (just lowered by $4K)

I can only purchase the home with cash and will need to use Private Lending to cover the rehab. Location of property is in MId-Town Montgomery AL. The property is of classic southern design with tons of potential charm. Condition is fair and the entire house needs a renovation and no structural issues even though the house was built in 1910.

What concerns me is the neighborhood is on the borderline to a rough area but is experiencing a bit of a revival due it's proximity to the modernization effort of downtown Montgomery so I can see potentail. What really bugs me though is there's also another listing close by that is smaller but similar in specs a couple of blocks down the street and across from a low ranking high school where apparently kids trespass frequently. It's been on the market for almost 1 year….

Given those details I still think I'd be able to get renters will to pay $800 which is what rentometer as suggested is a average price for the area. What offer would you make? I think the similar listing is justification to go for a 50%-60% of asking?

All comments, critiques, and suggestions are welcome!

Thanks!

-Joe

John,

VRBO…Expensive, for super popular vacation rental areas, has a client base that has more money and is looking for nicer accommodation. Can opt to use VRBO Reservation Manager = AWESOME vacation rental workstation manager

Airbnb…Inexpensive, "hipster" version of VRBO, takes a fee off the reservation, has a younger clientele that is looking for good deals

I believe your situation might be better suited for Airbnb though. VRBO would be good to have as well, you'd just have to keep up on updating both calendars/spend for both.
You also need to look into your state's taxes…In Hawaii where my rental is located we not only have to pay GE tax but the "hotel" TAT Transient Accommodation Tax" which both total to about 14%!

As far as managing a vacation rental goes, you'll find the nicer the place you have the better people leave it. When guest stay at a nice place they'll think "hey this guy is on top of it" meaning the owner will be on top of any deductions from the damage deposit…After a year of vacation renting I've found the most trouble you'll get is broken kitchenware or dings in the wall. It's tough to screen a guest but if you charge a premium you'll usually get older more responsible guests…

Key to making a vacation rental work is to ensure your reviews are near perfect, your cleaners are reliable and understand you run a mini hotel, your customer service is excellent, always be available for questions and respond quickly, offer more amenities then the competition, set up systems to where you have "canned" email response, rental agreements, check-in instructions, condo/local area info book/powerpoint! http://www.vrbo.com/426946

Best of luck man!

Mike,
Definitely seeing a trend here in HI as far as the use of OPM. Most local Investors seem to go Private Money period. As a new Investor I was looking to actually use deals accepted by HMLs to help convince skeptical Private Investors to invest into larger projects. Only HML lenders I was able to find where those listed on BP and Private Money Hawaii which might be pulling out HI Investor scene after talking with them…

Hey all, RE Investor out here in Hawaii. Wondering who local RE investors recommend when comes to Hard Money Lenders? Even when it comes to the national HM Lenders? We don't have many options it seems.

Mahalo for the suggestions!

Aloha Mitch,
Newer HI RE investor here too! BP is THE best RE investing resource out there. There's such much valuable information out here for free. I've learned a ton just listening to the weekly podcasts! Right now I'm working to breakout on some Rehab deals too. I started with a vacation rental I own/manage in Haleiwa so if you ever have questions on that aspect feel free to reach out! Best of luck to you out though, it's tough getting into the mix but stick with it. Hope we get a chance to partner some day!

Again Aloha and see you around...it's a small island!

Aloha BP World,

I'm in the Oahu HI RE market and it's certainly tough to find deals let alone making the numbers work. Therefore I've decided I'm going to become an Agent to help save money and get direct access to the MLS. I use Realtors to assist me now but when many potential properties are taken with 1 DOM it makes it tough to jump on projects.

My question is when it comes to the Brokerage…Is is better to join a larger RE Brokerage or smaller community/neighborhood based firm? I sort of feel the general public would rather list with a Larger name company than a smaller one. Then again I work closely with another Realtor who belongs to a smaller local firm which could lead to a edge on future mentorship.

Just want to hear other Agent/Investors thoughts?

Mahalo,

Joe/Flipvest LLC

I just left the AD Air Force too. Exactly, time for a change to go after bigger and better things! Good Luck to you. I'm originally from Riverside CA, close to San D but now live on Oahu, HI!! lol

Hi All,
I'm a new RE Investor in Hawaii. I've identified some new build CPR/development projects I'll need funding for soon. Does anyone know of a good Hard Money Lenders in Hawaii or Nationally that cater to CPR/new build developments? We have 3 but I have yet to hear back from 2 of them…

Hi Jean,
I'm a brand new RE investor and I don't claim to be an expert in strategies or concepts at all but I been put in a situation that sincerely will help me get the funding needed for my desired development projects..

While getting a estimate from a General Contracting firm I was approached by them in which they expressed interest in developing a business relationship. We've been discussing projects and have been building rapport for a couple of month and have now seriously Identified 3x development properties. To create that "Win-Win" situation for both business's what's been tentatively agreed upon is the General Contracting company will fund the total construction cost portion of my CPR(subdivision) development projects, if I guarantee use of their contractor, give them 20% of the net profit, and 12% interest on their principle.

Yes, I'm handing over tons of money to them but it's allowing me to build credibility by getting these projects completed and by teaming with well established general contractors which motivates others potential Private lenders to jump on board your projects when they see who you're working with.

So to get funding I'd say approach local General Contracting firms, tell them what you're doing, give them all the property details, exit strategies, (make a slide show presentation that paints the picture and offers estimates for the cost and time fame of the project) guarantee them business for reasonable rates, a net profit cut at end, if they team up with you to finance deals. They of all people understand the profitability of new home construction developments. If they see you being active, teaming with Realtors, being creative by identifying lots to subdivide and develop, they'll see a relationship with you will mean $$$$ to them now and in the future.

Best of luck to you!