All Forum Posts by: Matt Swearingen

"I don't have a problem with STR regulation"

@James carlson

May I ask, why not? Not looking for a flame war or competing political diatribes. 

I just don't understand why investors (even left leaning ones) are so indifferent to the state telling you what you may and may not do with your property. Why let them have more power?

For those who would argue that 'Denver doesn't want investors bidding up property values' or 'short term rentals cause problems' I would say: When does government picking winners and losers or price controls ever work?  This restriction will just create unnecessary externalities that serve no one.

Someone made the comment that the sharing economy is the wild west. That's a good thing. Look how much wealth and value for customers was created in such a short time. Property owners get vetted tenants and the collection and marketing services of airbnb, the tenants get vetted places to stay and a rating system for the properties. What's not to like?

@cassi justiz 

If you don't want a PM and you're struggling with finding tenants: have a successful, local real estate agent find you tenants.

They will be able to tell you the quality of competing units and the pool of available renters and then go find who you want. Then there's no long term commitment like with a PM, just a one time commission.

You can't be an ace at everything, find the people who are and learn from them.

@Nicholas Morgan

If you feel you MUST have this duplex and it's truly worth $112k to you then the other option is to get the owner to agree to close at $92k with the FHA loan and then get him to carry the paper for $20k over 5 years at 5% interest as an unsecured loan.

If you structure it right your payments won't be much more than a $112k FHA loan and everybody gets what they want.

Standard disclaimer: paying more than appraised value is rarely if ever a "good deal". 

Check with your loan officer whether that's legal or not with FHA.

You should be able to have someone manually underwrite the mortgage if his income is really high enough. 

@John Davis

I know a rural investor from my hometown with 40+ doors. The guy runs a roofing business, can't even turn on a computer and does mortgage amortization tables in his head. Also he's a multi millionaire. He and his wife always drive brand new model year cadillacs.

The key to rural investing is find a  good school district. For people that like rural living good schools are hard to find.  With a more limited pool of rentals it isn't hard to have the nicest ones in the area. Then you can be selective about tenants. 

If you must invest in rural areas I would suggest you look into flips and mobile home parkCadillac. Flips are easier to get into because houses take longer to move with lower population density.

Check the county's census results and see if the area is growing or shrinking. Some rural areas are just dying, so not good for long term plays. 

The best rural locations are unincorporated townships that are close driving distance to jobs and stores. The property taxes are lower than the burbs 5 miles away, with less regulation. You'll find random outcroppings of "McMansions" in plans where a developer bought a farmer's field at auction (usually when he passes) and put in a bunch of cookie cutter yuppie houses.

What is the goal of your investing? Do you just want financial freedom? Maximum returns? Find out your goals and your "why". Then see if rural investing fits your goals. It might not be worth it and driving to Greensboro might be the right answer for you.

Submitted an offer letter with a Master Lease with Option to Purchase. Payments were $50/paying tenant/month. Purchase was in year 5 for $200k.

Offer letter was detailed and described my reasoning for the offer and had a picture of the family and kids on it (play to the audience).

Offer was refused. I set a 1 month reminder on my Google Calendar to resubmit the same offer. I'm betting they won't get any more than $200k. 

So the township called me yesterday and had a nice chat. They haven't paid their $25/lot permit fees in 2 years. They will only ever be allowed 18 lots on that property because the DEP deemed the flat space below the park to be wetland. So the max gross rents from the park will be $315x18 = $5,670/month (tenant owned homes).

If I paid sticker $289k that's the 1.9% rule. I don't plan to pay anywhere near that.

For anyone following along at home. I viewed the property today and the results were predictable. The owners were both in their 80's and the husband who ran the place died in August 2017. All the information about the park died with him. They had next to no data available. 12 lots had homes on them (out of 30 available). "We don't do leases."

"How many people are actually paying?" 

"Some of them, I think.

The SFH on the premises was built in 1800 and was occupied by the owner's deadbeat son. It was condemnable, I wouldn't store tools in it.

This looked like a bulldozer special. Just start completely over. 

They want $289 for the 13 acres, might offer $100.

Agree on the 'can't beat the IRS' sentiment, I think that was the realtor's excuse. Will definitely request leases. 

Also contacted the township about the cost of permitting new pads, if they even allow it. If I could cash flow from day one and increase revenues by adding pads this could be a good investment.