All Forum Posts by: Joseph Cacciapaglia

I would strongly recommend against putting your entire savings into an STR with a high LTV. Real estate investing should be done from a position of financial strength. I think this is especially true when it comes STR, because of the seasonality that's often involved.

I think it's very unlikely you'll be able to furnish/decorate the house properly for only $25K, unless you plan on doing a lot of Facebook marketplace type shopping. Our average 4 bedroom costs $40K to get up and running, ignoring rehab costs. I've had clients spend close to double that, when targeting the higher end of our market.

You have a good chunk of cash saved, and I'm sure you could find a deal that would work well that wouldn't commit 100%+ of your funds. We regularly find opportunities in the $300K range in my market (I'm in San Antonio), and I'm sure there are plenty of other places with similar opportunities.

In general, I don't see a great reason to go all in, when you have plenty of opportunity to place a smaller bet to start.

You'll find San Antonio is a great market for STRs at the moment, but maybe not so much on the multifamily side, depending on what your cash flow expectations are. Choosing the right agent for a remote investment can be very difficult, so I thought I'd share a few questions you may want to ask:

- What percent of your transactions are with investors versus retail buyers and sellers? If they're only working with investors occasionally, it's tough to really grasp the nuances of the business.

- What percent of your business is STRs versus Multifamily, etc.? Even among agents that sell mostly/all investment properties, you'll see a wide range of experience in different asset classes. 

- What investment strategies are currently working in San Antonio? Anyone that's doing a lot of investor transactions should know the answer to this. At any given time, there are 2-3 strategies that are working better than others. 

- How much of your business comes from repeat clients? Investor focused agents should be doing a ton of repeat transactions. If they're not, it's because they're selling duds. Almost everyone that buys a great investment property from me starts looking for another one pretty quickly.

- What is your relationship like with your recommended PM? I interact with my PM team on a daily basis, and it keeps me up to date on the issues that clients will run into after the close. Especially for STR this is extremely important. There are so many ways you can go wrong with them, if you don't buy right.

Please feel free to DM me if you'd like to talk through these. 

I'm also an introvert, but have found a decent level of success as an agent. The main thing I did was focused on my strengths, and therefore my business model is much different from the stereotypical agent's. I don't cold call, door know, or SPAM, all of which never worked well for me.

I've also trained new agents that joined my team. I've found that setting them up with additional income streams is helpful. Most of the agents on my team spend a little time each week doing rental showings for our property management side. This creates a small amount of income, but gets them used to dealing with clients, showing homes, etc. It also creates some momentum, which is important in this business. One of my newest recruits is also doing make-ready inspections four our MGMT team. Again this provides a little income, but also gives him experience with the types of things we look for in our rental properties. 

I think 1 sale per month is an achievable goal in year 2 and beyond, but will be difficult just starting out. Many agents don't ever get to that level though. Joining a team may be your best bet to get your business up to speed quickly. I'm in San Antonio as well, so please feel free to reach out, if you'd like to talk about this in person.

Unless you're using a VA or USDA loan it's very unlikely you'll find 100% financing from a company. Seller financing and private lenders are most likely your only options. You may be able to add those as a second, behind your bank financing, but many lenders won't allow that.

That being said, I would not recommend buying with 100% financing as a new investor unless it's an unbelievable deal. No matter how good your due diligence is, there are almost always negative surprises. Real Estate investing should be approached from a position of financial strength, IMHO. If you don't have the funds for a down payment, it may make sense to bring in a well capitalized partner.

I've been buying land all cash and selling it with owner financing. This has worked very well for creating cash flow while avoiding long term market exposure. I started with this strategy late last year, and it will be where most of my capital goes for the foreseeable future.

I'm still working on a ground up STR, but won't be starting any more anytime soon. I'm also looking for single family homes with good rent by the room potential, but haven't found one yet. I think that will become more appealing as our rents have risen a lot.

I have several clients who recently switched their focus to condos. They have a much higher DOM than most SFHs, so the theory is there will be more distress there, and therefore more opportunities for discounts. Only a couple have pulled the trigger on those so far, but it seems like a decent thesis.

A lot of them have continued to buy high end homes for STRs as well. You can still find the occasional property that will perform well despite current rates with that business model.

This is the reason I usually ask for a credit, instead of a repair during escrow. It's very typical for a seller to do the absolute cheapest fix. Of course, that's not helpful to you at this point with this deal.

When you asked the seller to "fix it", what did your contract actually say? Who did the fix, and did you have your inspector reinspect after it was completed? I have never had a client try to get additional repairs done from a seller after the transaction closed, but if I were in your shoes, and I wanted to deal with the hassle, I would consult a real estate attorney. I think practically speaking it may be better for you to just take this as a relatively inexpensive lesson, and move on.

Search your MLS for recent rehabs, and then visit properties that have the level of finishes you're looking for to see if it's actually done well. The San Antonio MLS allows you to filter by "recent rehab". I would guess your area has a similar function. Once you find a few that you like, you should be able look up who pulled the permits on your city's website or by calling the building department. This is how most of the flippers/BRRRR investors I know have found their best GCs.

I like 1 and 3. 2 hasn't been great for me. I've only had bad experiences on Thumbtack. I don't think the fact that they pay for it has anything to do with the quality of the vendor.

Our PM team in San Antonio has volume discounts based on dollars collected each month. The benefit to the PM is that it's easier to deal with one owner of 10 properties than it is to deal with 10 owners with one property each. I find that owners of a single property tend to cause more problems than more experienced investors with larger portfolios too.

I have one client that has worked with several investors to collectively bargain for lower rates with a couple PMs. He is acting as a single POC for that portfolio though, and is very easy to work with. I don't think a PM would be as open to the group bargain, if they then had to deal with a bunch of individual owners anyway.

I completely agree that making predictions, especially macro predictions, is a fool's errand. Instead I've tried to focus on protecting my downside while also taking advantage of market conditions. 

Here's what I did this year:

I sold a large portion of my portfolio this year, but mostly did so with owner financing. This enabled me to create cash flow with no associated liability, and without a massive tax consequence. With high interest rates, I'm very happy with the CoC returns going forward.

I made new investments in cash, so I don't have to fear a downturn or pay high rates.

I invested heavily in my agent business, and have recruited 3 new agents to my team. The uncertainty in the real estate market has made this the ideal time to pick up new talent, because being on an investment focused agent team provides new opportunities in a downturn.

I don't believe my market, San Antonio, is going to have a real crash, but I'm well positioned if we do. I'm also taking advantage of the current fear, because there are already a few sellers willing to take big discounts today, because of the panic created by national news.

I don't understand why people spend time arguing about where the market is headed, instead of simply preparing themselves and their portfolio for whatever they expect.