All Forum Posts by: Kevin Nichols

@Michelle Marie Spearman The #'s that airbnb throws to you are not accurate.  If you do decide to host, they will send you emails telling you that you need to reduce your rates, do a quick % off for a 5 day period, or similar.  Their algorithm will look at a homes in your area, but it's a broad area and not easily comparable.

As far as rural areas, if there is any type sports tourism (software tournaments, soccer, etc.) you might be able to play that up.  My town has 60,000 residents and is about 20 minutes outside of CLT.  We get a lot of folks coming in on the weekends.

Also, look at "travel nurses."  Reach out to your local hospital and see if they have a lot of contract nurses come in.  Those people need short term lodging  (30,60,90 day terms)

@John Underwood Do you use VRBO for a property in Greer?  If so, what types of visitors do you get?

I just added a Rock Hill property on Airbnb and got some good response, but not great.  I was thinking of adding it to VRBO and booking.com. 

I'm purchasing a property on a street that has a lot of flipper activity.  I had originally thought about using the house as a rental.

The rental will net $6200/year...but it looks like some of the flips are getting $30K to $50K gross.

Is there a calculator or some benchmark that shows whether a house should be a rental or flip?

Making 3 or 6% for every house sold seems pretty nice to me...especially in this hot market. In my state, most of the hard work during the home sales process is done by the closing attorney, who makes about $800 per transaction.  What would an agent say if we told them they should make $800 per transaction.  :) 

I have an agent who will occasionally give me a good pre-market deal.  I'm buying one this month.  He said he was going to buy it, but "it just takes too much time and work to flip."  So I assume it's easier to make commissions.

Just my assumption.  

@Justin Elliot The 2 properties that I seller financed, I basically looked at a compound interest calculator to do my calculations.  If the buyer paid me X today and I put it in the market with an average rate of return of 5% how much would I have after 15 years?

If I seller financed to this buyer at X%, how much would they pay each year? And then compound that over 15 years of adding it into the market.

My one example is a $65K duplex...I sold it to a couple.  I bought it for $45K and sold it the next day for $65K to the couple.  The put $3K down and I seller financed $62K over 15 years.  (I didn't do a balloon).

I think I'm charging them 9 or 10% interest.  Over the course of 15 years, I compounded that out to see how much more I would get vs. getting the money up front.

The other part of the equation, for me, was the property.  I initially bought it as a rental. It was in a very good neighborhood across the street from a nice park, etc.  The rental potential was good.  So, if I ever have to foreclose, I would be "happy," to take the property back.  There are some properties I've owned that I wouldn't say the same for.

The one thing that sticks out, is that I sold to owner occupants.  I didn't sell to a starting out landlord who went to a weekend seminar and thinks they can build a rental empire with no money down.

I'm no expert and I'm sure other folks here have complex worksheets for seller financing, but I feel like the above worked for me.

@Kirsten Braddock The seller financed deal I sold to a young couple was a $65K duplex.  They scraped together $5K for the down payment and I was comfortable with that because if I need to foreclose, I do have something in hand. Low or no down payments are few and far between.  When I list any of my rentals for sale, I always get a ton of beginners asking for no money down seller financing.

I've done 2 seller finance deals, so I'm no "expert," as others here may be.  But I will note that most seller finance deals will have some sort of balloon payment after X years.  It buys you time to search for better financing options and it gives the seller a piece of mind that he/she will get paid sooner than later.

Seller finance deals tend to have a larger % rate and depending on the seller, they may run credit checks and delve into your financials.  As a seller, they also tend to get a fairly good down payment.

The mechanics of it....I gave the terms to my attorney and he provided a promissory note that the buyer signed, with the property being added as security.

At closing, it's a normal close, with a HUD statement and the buyer signs the mortgage and promissory note. Seller is responsible for loan servicing and sometimes the seller will end up selling off the note to get paid sooner at a discount.

I hope this helps a little.

Looking at a small commercial property.  3 apartments over 2 retail spaces in a small southern town. Not growing, but it's in a fast growing county.  Don't expect it to grow too much over the next 10+ years.

Sales price:  $260,000

Gross income:  $35,700
Leases are mostly ending in late 2018. One apartment lease through 2020.

Expenses (insurance, water, electric):  $6200

Prop. taxes: $7832

Thoughts? Questions?

We have a duplex where on one side, the previous owner moved the hot water heater from the attic down to the small kitchen and made it an under cabinet installation.

It's pretty small....probably 30 gallon, electric.

Tenant is complaining about lack of hot water.  This is easily a $600 to $1000 upgrade and this is not a long term tenant.

Thoughts?

@Jason Hirko You're right. Out of the 75, there will only be a handful who will be fine with the neighborhood. I'll tell them all to visit on a Saturday. Part of the process, we are going to use SmartMove on this rental and see how things go.