All Forum Posts by: Mason Liu

Are there nearby comps that are also 300-400 sqft 1/1 houses? If there are, then for sure and it is just a numbers game from that standpoint. If there aren't any reasonably similar comps, it becomes a much uncertain exit for a flip. Make sure you look through your market data / recent sales to see if there is anything that will give you information on pricing this and potential demand.

I think one thing you can do is identify a market where you may be able to uncover potential deals. If you start to notice that there is a good probability of finding a deal that will provide a greater ROI, then you could potentially look into selling. Consider closing costs on both the sale of your home + purchasing of a new property as well into that equation.

IE: If you are cash flowing $700/month now, and factor in x% for rent growth and y% of appreciation for your property, and also a gain from the loan paydown, you can figure out exactly what ROI you are achieving now. Now the goal is to find something that will easily beat that current ROI, and if it does it could make sense to either sell or get a line of credit on the existing equity to purchase it. It will be very tough, especially in today's market, but that's what that would look like.

Not getting multiple bids for any given project. Maybe you don't need multiple bids for a handyman coming to fix a loose door, but definitely needed for the larger items. Roof/HVAC/Electricals/Plumbing/Paint/Flooring etc...definitely take the time to get multiple quotes, and don't be pressured by any given contractor until you do the due diligence upfront. Talking to other investors in the area and trying to get some referrals for contractors also helps as well.

 I think so. Even something as simple as utilizing ChatGPT to speed up certain processes such as asking for generalized information on a market's demographics and immigration patterns can be useful and save a lot of time. You could put in a range of numbers for purchase price and closing costs, renovation expenses, and expected returns and you could very quickly get a range of projected return on investments (although an excel spreadsheet could easily do this as well), but I'm sure as technology develops we will see even more sophistication in AI's ability to assist in deal analyzing.

In my opinion, the best agents, appraisers, home inspectors, contractors, lenders will utilize AI as a complement towards their existing businesses to spur greater growth and operational efficiencies. This will lead to many of the professionals in the same industries who already are not doing that well to fall out of competition and hence be "replaced'. I personally don't quite see any of these positions being completely eliminated due to AI, at least not in the forseeable future. 

Hey Jay, congrats on all that built up equity! Would need a bit more information on your current income, savings and investment rate, what you'd do with the sale proceeds if you sold, if you have the ability to purchase another property without selling this one, what is the potential return on investment of the next purchase or investment etc...

If you are confident in that sub market's potential to grow and appreciate in the mid to long term, I'm leaning more towards keeping it, at least for now. You're cash flowing pretty decently and the tenant is paying down the mortgage (I'm assuming there is a mortgage) while you enjoy the appreciation and tax benefits associated. As long as you save that extra cash flow towards CAPEX/maintenance items that will come up in the future, you should be fine.

Hey Jordan,

First off, congratulations on the huge success so far! I'd say that since you've already achieved success and developed a strategy towards your wholesaling business, why not keep doing that to generate the income you need to live and to also fund long term purchases. From that standpoint, it would be as simple as defining your buy-criteria for wholesaling, and your buy-criteria for long term holds. Don't need to give up what you've already done so well in just for the purpose of long term holding, there can be a balance and potentially a synergistic balance I'd say.

Hey Holden,

Congrats on your first purchase! It would be ideal to get an inspector and experienced contractor in as soon as possible, at least one of the two so you can get a firmer idea of what the renovation costs and timeline will look like. Furthermore, you'd be able to go back to the seller and negotiate if there were any unexpected items that came up in the inspection that will take money and time to rectify.

If you're getting a contractor in to walk it, give him the scope of work prior to his walk so he can get back to you with an itemized cost of the scope of work. If it doesn't look reasonable, get another contractor in (you should be getting multiple quotes from multiple contractors unless you have a deep relationship with one particular contractor and know he is giving you a great price).

Hope this helps!

Smoky Mountains is a good traditional STR market that probably has minimal regulatory risk compared to many other STR markets, and also has consistent demand as the area is pretty much built solely for vacation and hence vacation rentals

Assuming we are talking LTR only, I think this will be very dependent on the market in which you are purchasing. IE: If you are purchasing in the midwest, there are a number of markets that will still have high single digit / low double digit COC returns on 1-4 unit properties. However, there is an argument to be made that historically, those properties have not appreciated in value as much compared to the average home in other markets. On the other end, you'd be lucky to get a positive COC return in the coastal markets with today's financing costs as well as the price points, but the appreciation play may be there.

Personally, my goal for a LTR now with today's financing costs is to achieve a 5% COC return from cash flow from rents alone. However, the main goal is to gain equity on the purchase of the home by purchasing at a discount. So the overall COC return would be a lot higher. I find that getting any type of decent COC return when purchasing a property at fair market value is tough in today's market and financing environment.