All Forum Posts by: Majid Tahir

@Michael Gilman, thank you!  I was hoping that was the answer.  I'll call the city on Monday and see what the fees would be to reconnect the second meter.  Looking at the water bill, the previous owner likely lost money each month just because he paid for water rather than connecting both meters with likely a simple phone call!

Good afternoon everyone, 

I have a question regarding water metering.  I'm in the diligence period on a duplex and it looks like the previous owner payed for the water despite there being two meters.  Looking at water bill, it looked like one meter was disconnected and the other was used to for both units.  Here was the message from the seller:

There are two bills each month because there are two meters. One is disconnected so the charge is always around $39. The disconnection happened before I bought the property so I have no detail around it. The new owner may consider reconnecting it so the tenants pay their own water. I never got around to doing that. The other thing they could do is request that the meter be removed or taken out of service in order to drop the $39 charge.

My questions are:

1. 1. How can one meter be used for 2 units?
2. 2. Since it already has 2 meters, it seems like it would be easy enough to make the tenant pay for water by reconnecting both meters.  How much would cost me?  Is this as simple as talking to the city to enable it?  Would contractors be necessary?
3. 3.  Anything else I'm missing?

Thank you for your help.

@Ken Boone, perhaps you are right.  However, if I can figure out how to raise occupancy rates to lets say 80% and raise the avg daily rate to maybe $225, that could easily double my monthly cash flow.  The key is to figure out with high rate of certainty how accurate my occupancy rate and daily rate estimates are.

@Luke Carl, I agree. I'm just starting my STR search so definitely keeping my options open.

And yes, I've verified that it is monthly HOA fees and the cost is that high. I'm concerned that holding costs are too high if the property is vacant for an extended period of time. If the economic situation changes, I dont want to be stuck with a property that cannot be sold easily.

@John Underwood, the location is sort of vacation resort so it includes multiple pools, restaurant on the premises, spas, and other activities.

Hi everyone,

I'm evaluating a condo in Panama Beach City Florida for a short term rental.  Here are the numbers:

Purchase Price: 290k

ARV: 285k - 300k

No major renovation is required.  Here are the monthly expenses as I've researched so far:

Supplies $100.00
Electricity $400.00
Gas $50.00
Water/Sewer $50.00
Cable/Internet/Netflix $50.00
Pest Control $50.00
HOA $1,100.00
Property Tax $200.00
Insurance $100.00
Repairs $239.63
CapEx $239.63
Property Management $0.00
Booking Fee $143.78
Total Monthly Operating Expenses $2,723.03

A few questions arise for me:

1. $1100 in monthly HOA fees are A LOT. Is that common in Florida vacation condos? Is it wise to purchase a vacation rental condo with such high HOA fees? It seems that it would add significant additional pressure when the home is not rented. With such high HOA fees, I feel it would make it difficult to sell the home as well. I'm trying to think of a contingency plan in case the short term rental model does not work with this property.

2. Should I still plan for 5% capex and 5% maintenance with this property or condos in general? I supposed I'll need to research more closely what the HOA covers first?

3. @Avery Carl has some charts on her site with average occupancy rates, and average daily rates for this area.  Her figures indicate an average daily rate of $215/night and an occupancy rate of 70% for a 2 bed/2bath in PBC area over a full year.  Assuming these numbers are fairly accurate and acquiring a loan with 25% down, I'm looking at a monthly cashflow of around $600/month.  Do these numbers seem reasonable?  Am I being over optimistic here?  Any guidance would be greatly appreciated.  

Anything else that I'm missing. Would love any other feedback on this deal or STR in general.

Thanks in advance.

Majid

Hey all, I'm going to jump on this post as well.  Looking to network with realtors who work with investors and any wholesalers as well.  I'm ideally looking for a duplex or triplex in the Dallas/Arlington/Ft. Worth area but open to other ideas or locations.  

First of all I've just discovered the wealth of information here on BiggerPockets and its really exciting.  I never knew before where to go with some of my questions, but it looks like this forum is a great resource.

I have a condo that I used to live in and when we had our third child we decided to move out.  I could not sell it at the time because this was during the recession and I was about $60,000 under water on the property.  In addition, my credit was poor so I could not refinance my interest only loan.  Luckily I was able to rent it out but I was not gaining any equity on the property.  I also was losing about $300 a month in negative cash-flow.  

Its been about 4 years now and my credit has improved and I was able to refinance at a much lower interest rate.  (6% before to 4.5% now).  Now I am only losing about $100 per month.  I am still about $40k underwater on the loan so selling it is still difficult.  

The way I see it is that I have 2 options:

1.  Pay current mortgage amount and continue to raise rent annually until I break even.  Then sell the property when I am no longer underwater (maybe 5-7 years)

2.  Pay extra principle every month and try gain enough equity in the property so that I can sell it in about 2 years.  

I would eventually like to invest in better real estate properties so I want to save money for that as well.  What do you all suggest I do?