All Forum Posts by: Matthew McKee

Thank you for your excellent input. I try to provide useful information, but without your feedback, I wouldn’t know if I am on the right track.

• @Bryce Hammill - Analysis paralysis. Excellent point. We see this in some of our new clients, but I didn’t have it on the list. Thanks.
• @Mike Dymski - Fear and incorrect action. People keep looking for “the answer” in podcasts, books, and seminars. Sooner or later, you have to stop looking and start doing.
• @Nate Sanow - On shame and regret, if you have the time, please expand on this. I think these are important, and I did not consider them. In what context are you thinking?
• @Nathan Gesner - Excellent point. I had not considered “negative programming.” Any thoughts on how people can overcome this?
• @Account Closed - Rates - do you mean interest rates? Rates may be a problem today, but people failed to act when rates were low. What do you think about this?

If anyone else has ideas, please post them.

In the next week, I will draft the guide and get back to you for your criticism.

Thank you all again for your input.

I started using it in March and it just goes bad to worse. How I wish I could turn back the clock and sign up for different software, but now my processes are so entrenched and I don't have time to overhaul to a different web app.

A rough summary:

- repeated bugs. Smartlocks don't sync (I pay a VA to fix EVERY booking). Now, pricelabs isn't syncing. Some auto messages don't get sent randomly.
- website says they have a direct booking landing page for your listing, but people can't pay through it, so it's not a booking page.
- Awful task mgmt features (can't mark things done, they just float in the calendar forever). Mostly need for cleaners.

There are much less buggy options out there.

Hi there. Anyone doing short term rentals in Pensacola/Navarre Florida? I'm looking into buying an STR there and would love to hear your thoughts/insights. TIA.

Abbie

@Alexandra Belle

Work with agents and lenders that work with investors and/or have invested in real estate themselves. I recommend getting an FHA loan or low-money down (5-10%) conventional portfolio product if you want to house hack.

If you're looking for a renovation loan, you could use an FHA 203k or use hard money. A fair rate for you is going to depend on a number of variables so the only way to find out is to talk to multiple lenders and then compare each loan product apples to apples.

Have you already qualified for the loan?  Is it a conventional loan?   If you qualify for the conventional loan, you are not that house poor as lending criteria will protect the lender and you from you being over extended. 

My view is adding an ADU in most CA markets is one of the worse RE investments. Here are some of my thoughts:

1) The value added by the ADU addition is often significantly less than the cost of adding the ADU. Search the BP for ADU appraisals to encounter numerous examples. This creates a negative initial position. This negative position can consume years of cash flow to recover. Make sure you know the value the ADU will add to the property before building the ADU.
2) the financing on an ADU is typically far worse than for initial investment property acquisition or is often not leveraged (HELOC, cash out refi, etc). Leverage magnifies return.
3) The effort involved in adding an ADU is comparable or larger than a rehab associated with a BRRRR. However if I do a BRRRR I can achieve infinite return by extracting all of my investment. Due to item 1, adding an ADU can require years to start achieving any return (once the accumulated cash flow recovers the initial negative position).
4) Adding an ADU is a slow process. It can take a year or more to complete an ADU. During this time you are not generating any return from the money invested in the ADU. This amounts to list opportunity because if you had purchase RE, at the closing it can start producing return.
5) ADUs detract from the existing structure whether this is privacy, a garage, or just yard space.
6) this is related to number 1, but there are many more buyers looking to purchase homes for their family than there are RE investors looking to purchase small unit count properties. This may affect value or time required to sell.
7) Adding an ADU does not make the property a duplex. For example in many jurisdictions I can STR units in a duplex but cannot STR an ADU (some jurisdictions will let you STR if you owner occupy). Duplex have different zoning that may permit additional units. Duplex can always add additional units via the ADU laws.
8) adding ADUs is a slow process. The time required is time without achieving any return. This amounts to lost opportunity.

If you choose to ignore all these reasons why an ADU is often a poor investment, look into receiving the $40k grant for building the ADU. It can help with item #1 above

Good luck