All Forum Posts by: Jon Cave

@Nicholas L. thanks for the input. Yes I know I would have a mortgage either way. But the mortgage on a BRRRR would be much less than buying a turnkey home. I think it's in my best interest to just sell this one with just a little profit and move along. The cash out wouldn't fully pay back my personal loan plus I'd need to spend 6-7k to furnish the place. I think it would make a decent STR, but I really need to buy a home with the intent to STR it in the first place.

I have run the numbers as an LTR and as an STR. I use Rentometer and AirDNA and the Bigger Pockets calculators. It does work as a LTR but cash flow is higher with an STR. There are a few STR's in the area that are comparable. I have a little too much money in this deal as it was intended as a flip but the sale is going very slow and Id rather hold than lower my asking price. My price is correct, but the market is just super slow. It would be a cash out refi situation.

Great info from everyone!

I actually have a flip that's been on the market for a few months now with very little action. I'm thinking I keep it and STR it which would be an AirBnBRRRR. The numbers do seem to work and its a really nice 3/2. I own it using a personal loan from a family member and I have someone getting me mortgage numbers. It'll work with today's interest rates but it'll work much better when the rate goes down to the 5's (whenever that'll be).

I'm not failing at flipping but this slow market isn't helping things. I haven't lost money on a flip but I'm not profiting nearly as much as I'd like. And what I mean is that I see people buying turnkey STR's and cash flowing but I don't see the numbers working if there's a mortgage. Seems like BRRRR-ing is the only way to make it work

Hey, hive mind.

I'm a flipper who's not having a great time flipping. I'd really like to get into STR's and I'm trying to figure out how people find STR's that work even with a mortgage. Is this a situation where you need to BRRRR them for them to work or am I missing something? I'm in Memphis so I'd like my first couple to be local while I learn the ropes, but I'm down to buy anywhere. Any tips or groups I should join? I'm reading some books but I'd like to hear from some people with hands on experience.

Update: After some back and forth, the lender is indeed, and rightfully, making me install a whole new AC system. So far we're at over $6000 in costs after I signed the closing documents. Wouldn't be so bad if they had brought this to my attention a few weeks ago instead of after the scheduled closing date. 

Live and learn. I'll get this AC installed, still make a little profit, buy another house, and never work with FHA buyers again.

Thanks for the input, y'all. You were all correct. If the house hadn't had an AC unit at all, I would be just fine, but since it has an existing non functional unit, we're in an FHA pickle.

 Thanks, Tim. This house is a great learning experience. Proving that no matter how many books you read, it's nothing compared to real life. 

 I can't back out now that I've closed on the house right? The buyer still hasn't closed. I'm still waiting for official confirmation that I have to replace the AC. There's some weird stuff going on with the lender/appraiser. Like I said, I've completed their list 2X and now they want the AC. Not sure how they're allowed to keep adding to their list especially after all the requests they've made. At this point I'll still make money, I just want out of this nightmare house. 

 Good info. The part that's really bothering me is that they didn't bring this up until after closing. I had already fulfilled their list of repairs twice and closed before they dropped this bomb. If I have to do it, I have to do it, the circumstances are just extremely frustrating. Plus they buyer had me pay 100% of closing costs so its been a nightmare.

 I see your reply but my main takeaway from your comment is that you live in Cody, WY. That's so cool! We're dying to get a rental in the Jackson area some day. But they cost 20X what I paid for this house so I have a ways to go. 

But, we were told that window units were adequate, that's why we didn't replace the central AC system. This is a neighborhood where 90% of the houses run on window units. FHA doesnt specifically require central air. They require adequate and reliable cooling which I provided.