All Forum Posts by: Joseph Beilke

I get your trying to force some equity, but like I said and so have others, pulling a "chunk"of capital will be harder than you think. That is the main reason I'm building NEW. The starting point in NE FL for STR are pretty much all over the place. Condos as cheap as Mid 300, the ocean front into the millions. Here's a property that you might be able to score a deal on if you were willing to take the risk and do the necessary work.. This property could be worth just shy of 2 Million went rehabbed right.

Famous "Blue" House for Sale

@David Brand

David, as a Realtor that works NE Florida beach and closely with investors in the area I would say the BRRRR strategy is on hold right now. With Home prices falling daily here are some stats.

of the 796 home on the Flagler County MLS.

98 homes had a price reduction on last 7 days

230 home in 14 days

and 316 homes in last 30 days

The current high interest rates are going to make it more difficult to actually cash flow when you pull money out of a property after rehab with dropping values.   I see lenders being more strict in there ratio and not giving as much value to rehabs as in the past.

"IF" rates come down, I see the the strategy being a very good option again, just not in this current market.

"IF" you come across a unicorn property for a crazy good price, it could still work.  But you will be fighting everyone else looking for it too, which might drive the price up to a point where is no longer a smart buy.

Go luck and please feel free to reach out if you wanna talk NE Florida.

@Vishal Amin

No one seem to be directly answering your question so I will.

I have out of state properties too and I have one tenant that writes me checks for the first Friday of the month they get paid on. She sends me 12 check every January, the date could be the 13th to as early as the 1st of the month. It is an arrangement that has worked for 4 year and not once has a check bounced.

2 other tenants pay via Zelle,  I send the request on or around the 27th and normally get paid on that date or a day or two later.  

Other LTR and MTR Pay through manage software Rent Readi, which has been brought up earlier.  

They are many types of property management software and ways you can collect rent.  I would reach them and see what fits your budget if that is the route you wish to go if you are self managing. Secondly,  I would communicate with the tenants and see what works best for them.  The burden of just paying bills is difficult for some people and making as easy as possible for them will, secure you getting paid on time. It may seem like hand holding but some times property management is more like people management.

Hope this helps.

@Michael Simmonds

DM sent!

When I bought my first investment property I thought the same thing.  Give it curb appeal to help in getting the max possible rent.  The truth is most of what you're suggesting is will go un maintained.  Tenant for the most part will not take care of the bushes, weed the mulch beds or much less keep the yard in great condition.  It will just be money through in the wind.  The only way to keep your property looking great on the outside is pay a landscaper or come by and do it yourself.   Not to say there are not some tenant that will take on a green thumb and keep the place looking great, but they are few are far between.  

What you need to think about is what can I do to reduce maintenance around my property and keep it in the best possible shape that has little to impact on my tenants while they are leasing.  Plus this will help in turn over time.

In my area of Florida, many home single and duplex are not built with gutters.  Rain water falls off the roof and over time you will get dirt and mud splash up on the walls.  I have gutters installed and then I DYI underground piping to move the water further away from the house.

I have leaf guard on the gutters too.

I fence in each side of  the duplex to provide privacy for each tenant, plus I allow large dogs with tenant paid insurance. This allow me to ask for higher rents.

I use rock over mulch and twice a year I use Ortho Ground Clear to keep weeds at bay. I also encourage the tenant to sprinkle PREEN on the beds a few time a year if weeds start to pop up. I have just drop a jug by at time and there are happy to do it.

Slow growing plants that are draught resistant for less upkeep.

I pressure wash the drive way with each turn over and do outside of  house once a year too.

One house I have get a lot of pine needles on the roof.  It's quick work with a blower to clear them off, they will premature age your roof if you don't. 

All these thing will not get higher rents, but it will prevent higher repair and maintenance cost in the future.

@Matt Devincenzo

We didn't do a PSF evaluation. We had a range for market rents. Reversed engineered how much we could build for and pay for a lot and still get our desired cash flow . Then once we figured out what that number was we shopped around to small Builders and GC and found one that would build it within our budget. We also has to take into consideration that our ROI isn't as important, one of the main goals is to have physical asset that provide a tax shelter for other income.

Were building at $161 PSF under air. We are looking $1.56 PSF for rent. or $49,200 a year Gross income. Which bring us to .0955 of the 1% rule. Those numbers were expectable to us. Now of course Vac, CapEx, Management, come out of that. But on paper those will be zero when expensed out fully by another LLC which will sublet to actual tenants.

@Don M.

Timeline

Requested a survey at the end of August 2022, took about 6 weeks to get that back. 

Permit package was submitted on 10/18/2022, had a few petty things to address and got the permit back approved on 11/14/22

Lot was cleared on Dec 1

Slab poured about a week later and on Dec 20, 22 we started laying brick

Jan 13 Nail pattern inspection completed

Feb 2 interior Framing completed

Windows arrive and 2 are wrong size, about 3 weeks to get replacement

Electrical a week later

March 20 Dry up

March 29 Mud

April 8th Paint

April 12 Repaint inside to correct color

April 17 All floor is completed  Cabinet delivered and in place.

May 15 will post up for rent with a move in Date of July 1

@Ke Nan Wang

I think you are correct and but it sure didn't read that way.

My wife/broker @Sarah Beilke and I are working with a few investors looking for STR/MTR between St Augustine and Daytona Beach. The rules vary greatly and as one said here Volusia County as a whole does not allow STR, but if you look there are many. Will the county begin to enforce or change the rules, not sure, sure wish I had a Christal ball. @Quinn Stewart Be happy to help feel free to reach out.

So if I'm reading this correct.  

Paid $85,000

Invested $160,000

Total $245,000

Sale price $240,000 with a ARV of also $240,000

Net Lost of $5,000 plus closing cost and commission.

Seems to me you over improved or am I missing something?