All Forum Posts by: Kris Reeves

@Audrey Ezeh Thank you so much for chiming in! I had listened to that podcast episode when it came out over a year ago, but honestly had forgotten all about it! I went back and re-listened to it yesterday. Cameron is actually about 5 hours away from me! I am going to reach out to him and hopefully gain from his experience. So thanks for that, and for directing me to Scott's thread!

@Scott Choppin I really appreciate your detailed response to my post. These are all great considerations, and you have given me exactly what I was looking for in my request. I will be leaning on my local contacts and friends who are in development as I dive further into researching this. I may take you up on a conversation in the near future, and I appreciate the offer.

To answer your first question, there are existing homes in my region that I can rehab and put into my portfolio. The competition is high, therefore there are fewer and fewer to choose from, and the prices are being driven up. So there are two things have driven me to consider the build-to-rent approach: what I just mentioned about supply, and the portfolios for sale that I began this thread with. I am 39 years old, and the thought of having brand new rentals sounds attractive when I consider holding my portfolio forever. This will be our business, and we will treat it like one. So when I build them, I will know them inside and out from the first night of rental. 

Again, thank you both for chiming in!

This may be a good thing that nobody responded, or maybe a bad one!

@Guillaume D. Very nice job, and the community thanks you for sharing! The key is action. Having a process that sets you up for success and sticking to it no matter what. Keep it up, sir!

As I scan commercial and residential property, I regularly find these portfolios for sale. A couple have got my wheels turning, so I thought I'd poll the professional audience. One in particular is a 20+ single story, slab style home development. All homes are on the same street. All of them have stamped concrete floors that look like wide plank hardwood. They are all brick or vinyl siding, so I am sure they are all low maintenance, both inside and out. 100% occupied with a waiting list is the part that really stuck out to me. 

So my question: have any of you ever built strictly with the intent on renting the properties upon completion? This seems like a solid strategy to me, but I would love to hear from you guys. Here are some of the pros and cons that I see:

Pros:

• Property management costs would be lower over the life of ownership due to proximity of homes in portfolio, low maintenance flooring, siding, etc.
• You could build them with more robust systems(HVAC, plumbing, etc) knowing they would always house renters
• Your portfolio would be concentrated as opposed to spread all over a geographical area
• Your exit strategy would be super attractive if you were to sell as a package
• Quicker than purchasing and potentially rehabbing an older property, and accumulating them one by one
• You could sell a percentage of them to recoup a portion of your investment, and rent the rest, which should put you with solid equity from the gate

Cons:

• Entry costs and length of time from start to first months rental income for construction
• Funding the construction, or finding the right lender to fund such a property/development
• Knowing the correct price point of the finished product, or what the community is lacking
• Local zoning or possibly being prohibited to build SFH to rent
• Higher construction costs vs. multifamily(apartments or townhomes)

I know there are many other strategies out there, but as one wanting to accumulate a nice rental portfolio, this seems to be a solid approach. I am curious as to what you guys and gals have to say about it.

Jorge, I have a great painter I use for all of my projects in Birmingham. I may also have some options for your rental properties. DM me for details.

Will,

In Alabama, you must have a cashiers check equal to or greater than the total purchase price IN HAND when you go to the courthouse. It sounds like you already have an Auction.com account, but if not, go ahead and sign up. When you arrive, you will be checked in and given a bidder number. At this time they will ask if you have funds with you and they will verify them. So like it has been said above, know exactly what number works for you, get that amount in the form of a check, do not bid over(have WALK AWAY POWER) and go get to bidding! Good luck sir, and keep us posted on your venture!

Denise Evans will have your answer, as she always does with hose types of questions. Good luck!

Jason Jebeles Nice work on the finishes! That full kitchen will probably help keep it rented. We are opting to go with just a sink, refrigerator and microwave, not a full kitchen. Just keeping with what you'd find in most hotel rooms. We are looking forward to our own little house hack! Good luck sir!

Jason Jebeles Man that is great! I appreciate your posting this, because we are also in Alabama and are preparing to finish out about 700 square feet in our basement. We have kicked around using it as a STR as well. I don't have an answer to your insurance question, but I am curious what answers others give and I would also like to know a little more about your space and your rates. Is it just 1 bedroom? Does it have a bathroom? Kitchen or kitchenette? Separate access? What is your average nightly rate? Minimum nights? If you'd be willing to share, I'd appreciate your response. Feel free to pm if you'd like. Congrats man!

@Andy Krzanowsky Nice work, sir! That deal will make for a strong foundation moving forward. And about your Realtor... there is nothing like having that relationship with someone like her. It is all about your team. Congrats my friend, and I wish you much success!