All Forum Posts by: Kyle Varner

Sounds like you are a doctor, and in that case I am very confident in your job prospects and thus my ability to collect what you owe me.  Back when I was managing my own units, I would have said yes to this arrangement.  Now, I have a property management company and they'd probably say no, and I'm not going to do anything without them because I don't have time to deal with tenants.

You will find a mom and pop landlord to do this.

But, please take my advice: You should *buy* a place. If you are a licensed doctor (or dentist, or veterinarian), there are like 101 lenders who will give you a loan for zero down on a primary residency, with no PMI. It would literally cost you less to move in by purchasing a place than by renting a place.

Worst case scenario, you decide to move out and you just rent the whole place out and basically break even but get appreciation and pay-down.  That's my unsolicited advice as someone who was in a very similar situation to you before I started buying every piece of real estate that I could.

I am looking at my options for financing some properties, and I'm a little bit lost. I've got five conforming loans, a high income W-2 job and spotless credit. Theoretically, I could qualify for five more loans. I've got five additional properties in vary stages of the BRRRR process, and my cash for picking up additional properties is going to run low soon, so I will need to figure out my next step. The idea of putting my acquisitions on pause to allow for the seasoning period in order to get these five properties into conforming loans isn't very attractive, because in effect it means skipping out on five other deals.

I figure I've got two options:

1)  Get a blanket loan on these five.  This is a viable option, and I see a lot of advertising out there for blanket loans that emphasizes things like low documentation requirements, low personal credit requirements etc.  If I go this route, I'd rather go with a lender with high requirements and get better rates and terms--but I'm a little lost as to the right way to shop around.  Before talking rates and terms, people want me to apply, and I'd rather shop first, choose one and then apply.  Anybody have thoughts?

2)  I could also use some other properties that I own free and clear as collateral for some type of line of credit--I know this is a thing, but again, I'm a little lost about how to shop around to get the best rates and terms.  My Chase Private Client banker mentioned that this could be done through their commercial arm, and I suspect I'd get decent terms from them, but I'd rather compare and contrast a few options.

Anybody have thoughts on these options?  Another option is to use hard money loans for additional acquisitions, but that seems like a high cost way of doing things, and would certainly necessitate being very ready with a lender for blanket loans.

I've got really good deal flow...for the first time!  Now, how do I take maximum advantage?

Thanks for this info, Yasmine. Do you find that the higher or lower priced rentals generate better ROI? Do you find that it is extremely seasonal? Finally, what is the process you use to evaluate a potential property for a vacation rental? I have struggled to figure out how to come up with realistic projections about revenue and expenses, but I presume you have done this many times as you have been involved in buying and selling these properties.

It sounds like you've got plans and are approaching this as a "custom build" even though you've got the designs drawn up in an economical way.

May I suggest that you look for builders in your area that have, for lack of a better word, cookie cutter homes that they build?  For example, in my market there are a few pre-fab construction companies that have factories where they make large parts of the home.  You can't bring these guys a set of plans, you have to pick their off the shelf models.  But the result is that you enjoy some of their economies of scale.   There are also traditional construction companies that have a menu of houses they offer, with pricing that is very transparent.

I think you will run into fewer problems if you find a company that continually builds one particular design, and just hire them to do what they do.  If you come to someone with plans, I think the price is likely to be higher.  

One company in my market I am consider using for a few upcoming projects is Simplicity Homes.  You can google them and see how they have different options available, and how the prices are very competitive.  I've found similarly competitive prices from other companies that offer this business model.  If they have a mass produced house that fits your needs, you're likely to do well.

I'm interested in buying a vacation rental in the Miami area. Can anybody recommend a vacation rental management company who could talk to me about the market for vacation rentals, areas to buy in, reasonable expectations about ROI etc? I'd be willing to either pay a consulting fee or make an agreement to use them to manage my property when I make a purchase. I think going directly to someone who manages vacation rentals will give me the best knowledge about what to expect from this investment.

I went on a lecture tour to Ecuador right before the pandemic.  A couple of things that give me pause:

1)  There are currency controls in Ecuador:  you will pay a substantial tax if you try to move money out of the country. So, your profits come with some significant strings attached.

2)  The political situation is very volatile, and they have a presidential election coming up with some very problematic candidates.  This means that there's the very real risk of a economic collapse, and as a foreigner owning property there would be additional risk for you. 

3)  Corruption is a way of life in most of South America, Ecuador included.  You will have to pay bribes--and you will be taken advantage of when doing so.  Need to do some construction?  That's a bribe.  Your contractor will probably tell you he needs X dollars for the bribe, which is probably double what he will actually pay.  So you'll be paying an inflated price on a bribe in order to get permission to fix your property's electrical problems.

I know some expats who live in Ecuador, and they like it.  They rent their house, and they keep all of their money in the United States, transferring small sums to their account in Ecuador when they need it.

I'm not opposed to high risk, high reward investing, but you should know what you're getting into.  The risks are very high, and you should expect significant rewards for taking those risks.

I would simply point out that I think a lot of "comps" for rent are lagging reality a little bit.  The rental market is so tight, that you can ask for higher rents than you would expect from the decision engines like Zillow.  I agree that Spokane is overpriced relative to rent, though.

Every once in every once in awhile I will drive past a house that I noticed I was moved there on a truck. It is a traditional post and beam Construction, not a mobile home. I got curious and hit up Google which feature stories of people buying these houses and having them removed and installed on their property for a price much lower than they can have a new house constructed.

Has anyone considered doing this for investment properties? Every once in a while I run across deals for very cheap buildable Lots or for Lots with house that absolutely needs to be demolished. Usually the new construction figures don't make it feasible. But maybe putting a recycled house on the lot would?

Has anyone ever done this? Or looked into it? It seems very interesting to me.

I'm I'm guessing that this is going to vary state-by-state. I would also suggest that your easiest recourse may actually be an insurance claim. I don't know for sure if your insurance will cover that but it would seem that loss of rent due to this incident could be considered an insured loss.

If if you find legally that you are screwed, consider talking to your Mayor and city council.  Unfortunately autopsies take a long time because there is a huge backlog for forensic pathologist. But there's no reason you should have to pay the price for a delayed autopsy.

Most most landlords when the rent is late do not first serve some kind of a notice with a process server. They call the tenant and ask what's going on with the rent.  It's a lot easier to make a phone call and remind someone that the rent is due then it is to pay a process server to serve some kind of a notice.

This Behavior suggest to me the landlord wants you to move out and is trying to play games. I very much doubt that he's willing to go to court because he will likely lose. It also just doesn't make a lot of sense to spend money and go to court to kick out someone who's been Faithfully paying rent.

I suggest that you call the landlord and ask him what's going on.  Provide him with written proof of your payments and explain that you are not behind on your rent. If your landlord has two neurons firing in concert then this will be the end of it. If, however, your landlord is crazy, you'll probably have to show these to a judge.