All Forum Posts by: Matthew Spiers

My family and I got into short-term rentals this year and we thought things were going well but since the property was several states over, we had to rely on a virtual property manager. The one we chose was Evolve.

I know there have been a good number of debates on here as to which one to go with (Vacasa vs Evolve for instance), and I can safely say that I would avoid Evolve at all costs if I were to use them again in the future. Their lower percentage to manage is enticing at first but they cost us thousands of dollars because of horrible mismanagement and bad enforcement of their own policies and terms and conditions. I've been putting reviews of them to try and prevent someone else from losing profits from their bad management and if I could provide 0 stars I would. 

The two largest incidents that happened were when they miscalculated over $700 in missed taxes that they never charged the customers, then as we talked to them about correcting the issue they told us we were essentially out money ourselves. The last straw was finally when we had a guest not cancel, not notify us at all that they weren't going to be staying over our peak season (Christmas week) totaling nearly $600 for a few days. We then got a chargeback despite Evolve's rental agreement stating no refunds with no notice and then they pulled the money back out of our accounts. DO NOT ever work with Evolve. 

Vacasa seems like a much better alternative and will be who we work with in the future.

Ok, that's more what I'm leaning to. I'm still half and half and like you said it's very exciting but I should probably break ground on the construction first before I decide (still in permitting). I will probably reach out soon on the 1031 part, it seems daunting to do it correctly.

 Thank you for your reply! You're right it's probably better to post some real numbers:

Cost to Build: $650,000

Total for 4 Units: $1.2 million (each is $300,000)

Renting it out under short-term will be under a specific program (H-2B employees for SWFL), that will provide about $150,000-$250,000/year in gross income. Net cash flow would be at least about $90,000-100,000/year. So covering the mortgage in the meantime will not be an issue. 

I totally agree I'd like to do something I enjoy more (much larger multis) but it just seems like a lot of the larger multifamilies out there are drastically overprice and cap rates seem too low. That's my main concern.

Hey everyone, I don't post here as often as I should, but I've been mulling over something for far too long without asking for advice from actual RE investors. I currently live in Florida but have lived and invested in St. Louis, MO for several years (prior to moving). Because of the incredibly hot market in FL for multifamilies, I ended up actually starting a 4-unit development project that I'll have deeded as condos. As far as I understand, I have 2 options I can't seem to decide between:

1) Sell each of the condos individually and make a significant profit (a few hundred thousand) that I can then take and invest in other projects.

2) Hold onto the 4-units, rent them out with short-term rentals (I have a setup that will cash flow significantly for the area), and then use that property as collateral and a HELOC to purchase other properties.

There are different sides to both, with 1) being that I'd have to pay taxes since I probably won't be able to find a good property (or properties) in the right time for a 1031, but it'll allow me to have the cash right now. While 2) allows me to cash-flow and have livable income, fast-growing equity, but then I'll have to manage the rentals (I'll have a PM for that) pretty closely. That second option also means I have to wait until the property's built while I can pre-sell the condos under option 1.

Can anyone please offer some insights on thoughts you'd have?

Hey guys, just moved back into the area and looking for a good meetup. Is this one still going on? I'd love to make it to the next one.

Hey Brad, yeah for sure! When things were a bit more normal around here I went to a meetup that @Megan Greathouse put on about once a month if I remember correctly. Great place to meet local owners!

Hey Brad, Tower Grove East still has some pockets that are untouched and there is a TON of potential over there. I’ve got a duplex in Shaw which is basically Tower Grove North and another in Tower Grove East. Feel free to reach out with any questions.

I also know a couple awesome investors nearby like @Nathan Dehn and @Jenna Hartmann who I’m sure would love to help out too.

Thanks guys! Yeah it was a fantastic find. It had actually been pulled off the market and was relisted and I had to move fast. But fantastic neighborhood, nice/big units. Great area!

Investment Info:

Small multi-family (2-4 units) buy & hold investment in St. Louis.

Purchase price: $157,000
Cash invested: $65,000

Purchased this rental after relocating to St. Louis from Florida. I bought it in a really nice neighborhood after driving around every neighborhood in St. Louis.

What made you interested in investing in this type of deal?

Buy and hold are the kinds of properties that are more "evergreen" as I've heard before. They work well in good and bad times and have serious staying power. This was a great buy and hold in a fantastic, growing neighborhood.

How did you find this deal and how did you negotiate it?

After my realtor got tired of showing so many properties to me, I began looking on my own and found this one on Realtor.com/MLS. I wasn't entirely sure what I wanted to buy when I first relocated here, or where to buy, so I ended up doing 10+ showings a day several days a week. Eventually my realtor lost interest in helping me out so I continued to look on Realtor.com for properties that fit my criteria (I'm pretty strict on my criteria but act fast when I find something that fits).

How did you finance this deal?

Conventional owner-occupied. I ended up BRRRR'ing this deal with a cash-out refinance on an investment property (serious props to PennyMac) that helped roll my renovation costs into the loan. The property appraised for $100,000 more than I paid for it: $260,000 just 6 months after buying it.

How did you add value to the deal?

I painted the entire unit with fresh coats to cover up scuffs and to change some of the not so popular colors (a bright orange living room!). I replaced all of the appliances and repaired the roof that needed some serious repair.

What was the outcome?

The property appraised for $100,000+ more than I bought it for just 6 months after purchase, and I put each unit up for rent $200/mo higher than suggested by my realtors because the market hadn't caught up to the growth the neighborhood was seeing.

Lessons learned? Challenges?

Do your research! I ended up being able to rent each unit for $200/mo more than any of my realtors expected (I worked with a team), and they were quite surprised I was able to do so. Properties in the area were being converted from duplexes to half-million single families, and this property was one block over from a popular restaurant in town. Many of the investors and residents in the area didn't seem to see the trends of growth this neighborhood was experiencing.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Yes! The team at Berkshire Hathaway Home Services (Julie Hodges) did an unbelievable job. They did the rental side of this for me and got my tenants in place but made the process painless and marketed it incredibly well.

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $157,000
Cash invested: $25,000

Purchased this property that was on the market for 70 days by the time I came across it. Right next door to a top restaurant in the city, 2 blocks over from a restaurant hot-spot, and 3 blocks over from a med-school. Fantastic upside with rents well below market rates (after renovations).

What made you interested in investing in this type of deal?

I prefer buy and hold rentals but I see a lot of good potential in the area, including some really incredible local hotspots nearby.

How did you find this deal and how did you negotiate it?

I just found this property on Realtor.com/MLS. I find a lot of great success on the website despite the poor reputation it has for "picked-through" deals.

How did you finance this deal?

Owner-occupied. I wanted to live in this property while I fixed it up. I love the neighborhood and wanted to live there.

How did you add value to the deal?

I renovated all aspects of the property from paint to new appliances. It's fantastic what a new coat of paint will do! Rents were also well below market rents (with no prior leases) so after renovating, I put rents back to where the market rents were which has helped cash flow the property.

Lessons learned? Challenges?

Do your due diligence. Each property I have, I find a few things that I didn't notice even after reading through the inspection. It might be me being a bit too excited for the deal, so taking my time and doing my due diligence is what I need to do more next time.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Yes! I work with Julie Hodges here at Berkshire Hathaway Home Services. She's incredible and was incredibly helpful throughout the process. I highly recommend her.