All Forum Posts by: Michael Glaspie

@Devon Kennard, @James G. is right on the money. Another option if the property is off-market and not available for sale is to reach out directly to the property manager or owner. Now, keep in mind if the owner is self-managing the property then the fees will be lower. If a manager is operating the property then they should be able to give you an idea of all owner expenses, lease options (NNN, etc), the price per sqft ranges, and much more.

@Samuel J Gonzales IV the cash flow is less predictable for sure. But what we've seen is that one strong month can essentially substitute a large portion of the annual income from a long term tenant. One of my partners just grossed over $4,000 on a unit that would normally rent for $650 a month. This was because of a special event in our town that caused short term rental rates to go up. But none the less, it changed my outlook on it all. 

I haven't personally had a month that strong on my units yet, but the big events next year I'm looking forward to. 

@Samuel J Gonzales IV I honestly use a property manager now. It is an Airbnb specific property management group that has made the transition for me and my partners much easier. 

Investment Info:

Small multi-family (2-4 units) other investment.

Purchase price: $116,000
Cash invested: $2,000

I was able to acquire this property through another 'Deed in Lieu' (Subject To) deal. I paid for closing costs and moved into the property. This is a duplex, so the other unit is being renovated with the intention of being an Airbnb property. The price point for Airbnb's in this area at a minimum is about $80/day. Conservatively I will expect $60/day. After paying off the mortgage of $841 I will be cash flowing approximately $900/month.

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

I didn't have to qualify for another loan. I was able to acquire the property with very little money put into it. The location of this property is ideal and the rental rates are above average. This property will increase my portfolios cash flow substantially and will be one of the first properties I pay off entirely over the next 3-5 years.

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

A previous client was forced to move out of state due to the military. They just found out that they were about to have their first child. They wanted nothing more than to get rid of the financial obligation of the home. I was able to help them out by taking over the payments and giving them some money for future child expenses.

How did you finance this deal?

I covered the closing costs of $2,000 with cash. That is all I was responsible for.

How did you add value to the deal?

I renovated the second unit and decided to Airbnb it. This will more than cover my mortgage and utilities for this property. I will be living with all expenses covered. Essentially living for free.

What was the outcome?

The outcome is that the seller is extremely happy and so am I. Cashflow is increased to allow me to invest in more profitable properties in the near future.

Lessons learned? Challenges?

Communication is key. I found that even though I was comfortable with the process, I still needed to take the time to explain it thoroughly to the seller. Even after the deal closed I needed to continue to guide the sellers through the process.

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

I used a specific investor savvy attorney here in North Carolina that is very well known for his flexibility and comprehension of real estate investing. Contact me directly if you want to know who he is.

Investment Info:

Small multi-family (2-4 units) other investment.

Purchase price: $116,000
Cash invested: $2,000

I was able to acquire this property through another 'Deed in Lieu' (Subject To) deal. I paid for closing costs and moved into the property. This is a duplex, so the other unit is being renovated with the intention of being an Airbnb property. The price point for Airbnb's in this area at a minimum is about $80/day. Conservatively I will expect $60/day. After paying off the mortgage of $841 I will be cash flowing approximately $900/month.

My team and I have moved towards Airbnb arbitrage as our primary focus. So, this is just one more added to our portfolio even though its 100% owned by my company.

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

I didn't have to qualify for another loan. I was able to acquire the property with very little money put into it. The location of this property is ideal and the rental rates are above average. This property will increase my portfolios cash flow substantially and will be one of the first properties I pay off entirely over the next 3-5 years.

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

A previous client was forced to move out of state due to the military. They just found out that they were about to have their first child. They wanted nothing more than to get rid of the financial obligation of the home. I was able to help them out by taking over the payments and giving them some money for future child expenses.

How did you finance this deal?

I covered the closing costs of $2,000 with cash. That is all I was responsible for.

How did you add value to the deal?

I renovated the second unit and decided to Airbnb it. This will more than cover my mortgage and utilities for this property. I will be living with all expenses covered. Essentially living for free.

What was the outcome?

The outcome is that the seller is extremely happy and so am I. Cashflow is increased to allow me to invest in more profitable properties in the near future.

Lessons learned? Challenges?

Communication is key. I found that even though I was comfortable with the process, I still needed to take the time to explain it thoroughly to the seller. Even after the deal closed I needed to continue to guide the sellers through the process.

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

I used a specific investor savvy attorney here in North Carolina that is very well known for his flexibility and comprehension of real estate investing. Contact me directly if you want to know who he is.

Investment Info:

Large multi-family (5+ units) buy & hold investment.

Purchase price: $1,200,000
Cash invested: $300,000

This was a 21 unit portfolio that was found off-market. My partners and I were able to raise capital, along with long term fixed financing to get this deal taken down.

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

The off-market deal allowed us to come in with no competition and negotiate with our terms.

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

Cold calling and a long process of going back and forth on terms and conditions.

How did you finance this deal?

We raised capital for the down payment on long term fixed debt.

How did you add value to the deal?

increased rents and decreased management fees.

What was the outcome?

Cashflow!!!!

lol @David Pere she doesn't speak any more usually. So, she is a "guest" these days lol.

@Kirk Frickey my suggestion is just START! You seem to be going through a perfect example of analysis paralysis. Your first deal will more than like NOT be a grand slam. It is more important that you simply complete the first deal. Go small and complete a SFR. Get your jitters out. Then scale as fast as you are comfortable (or uncomfortable) doing. Take action brother. You got this.

If the numbers do not work out, purchase one or two smaller properties with the HELOC. Let the cash flow pay it down over time. The smaller properties can be refinanced at some point or simply held free and clear for cash flow.

I know this is an entirely different strategy then what you are proposing. I am simply just saying if the numbers don't work on this one, find a way to use that HELOC. You got this! Best of luck.

Hey Julio,

First, congrats on getting started in your RE journey. I commend you for finding this at a young age. Although I am a firm believer that institutional education is failing us, I want to preface this conversation with the facts that I do have my undergraduate in Business Administration and I am currently working on an MBA at UNC Chappel Hill. I do think there is some value to education, as long as you are not breaking your wallet. So, your decision to back out and focus on making money now is valid in my personal opinion. 

As far as RE license...DO IT! I have preached extensively to investors about the value of getting a license. I have rapidly expanded my portfolio due to my RE license. There are some wonderful agent hacks me and my team have found over the years. If you are looking for a firm or a mentor as a licensed agent, reach out to me via DM and we can talk about different options. 

From the sound of it, your first objective is to build capital and network. Work with your grandpa, get licensed and sell homes, go to investor meetups, and save save save. The networking will expose you to private capital as well. In no time at all, you will be ready. If you raise enough capital quickly you won't need to worry about credit score, you can buy a small home all cash. Down the road, you can then revisit HELOCs or Cash out refi. 

I hope this helps. Let me know if I can be of any assistance in the future.