All Forum Posts by: Michael Seeker

@Rob Bergeron - also worth noting is that while sales are down, prices are up 5% YoY and properties at lower/avg price points are moving quickly.  While total number of sales are down, it appears to be an issue with supply and not demand!

Interesting that they're calling it The West when it's about as far east as you can get!

@Mike Lattier - that is nonsense.  Overall, the RE market is hot so good deals are harder to come by.  We operate in the small multi space and have continued to find deals that meet the same criteria we used 3-5 years ago.  They are fewer and farther between, but they still exist if you're patient and know what you're looking for.

I suspect returns in the SFR space are getting crunched due to being in a sellers market (higher sales prices = lower returns for investors) along with the added demand from investors who are buying SFR's to use as short-term rentals.

The vacation rental model is sexy on the surface, but most people ignore the fact (or simply don't understand/know) that these are very cyclical.  Everybody thinks AirBnB's will always make more than a comparable long-term rental, but that completely discounts the cyclicality of that business model, not to mention glossing over the much higher operational costs and efforts.

Times are certainly interesting, but to say that SFR's and small multis are not viable is a very broad and incorrect statement.

@Jim Goebel - I'd say it's too late to push back on rates at this time...but do you even know what your rate is?  That's not clear from your post.

Typically a lender will quote you an exact rate (not a range) and they will lock that rate in.  If rates go up or down, you still get the rate that was quoted.

Additionally, commercial lenders do not move their rates as frequently and many I've worked with are tied to prime.  As you pointed out, though the 30-year rate has trickled down a touch, the prime rate has held steady at 5.5%.  I don't see anything that would indicate you should hope for or expect a better rate than what you were already quoted/expecting.

Hey Terrez, I've noticed that marketing is very aggressive in Louisville and there are a lot of agents and wholesalers trying to drum up deals.  I own comparable properties in another mid-major market and do not receive hardly any direct marketing on them while I get several pieces each month from various people for my properties in Louisville.  Unfortunately I don't have any tips for you, but thought I'd add some insight from an owner's perspective as to why you may be having trouble getting responses/leads.  As an owner, if I were inclined to respond to some form direct contact then I'd have a lot of options to choose from, including several real estate agents who are likely promising much higher prices to sellers than you could as a wholesaler.

Why not meet at one of the bars/restaurants in Old Louisville?

This is definitely not true - I'm curious what leads you to make this statement?  What are the rents you are projecting when completed? 

One problem you will run into if doing a $70K cosmetic renovation on a 5-plex in Old Louisville is that tenants who are attracted to the area and are willing to pay top dollar want the following:
-Original historic charm (No covering up original wood floors, trim, etc)
-Central heat and air (their own system, not shared)
-Newer electric
-Laundry and off-street parking

If this happens to be the 5-plex on Ormsby, you may want to do some more digging on whether it is actually a 5-plex and if the basement unit can be legally used as an apartment or not. PVA has it listed as a boarding house. We renovated a property like this several years ago and were forced to turn it back into a SFR due to zoning restrictions.

From experience renovating several of these properties, I can tell you that $70K will not go very far on something like this if you're expecting to be at the very top end of the market when finished.

Happy to provide additional feedback and/or answer questions if you have any!

That's putting it delicately!  Fortunately it's much better today than it was 10 years ago so we're moving in the right direction.

@Megan Gleeson - about 90% of our rental portfolio is in Old Louisville and I've got almost 10 years of experience buying/owning there.  Your desired approach is a good one and I wish I had done that starting out instead of flipping houses.  Old Louisville is an awesome neighborhood to live in and invest!  Growth over past 10 years has been surprisingly solid and it's gone from a marginal (i.e. semi-seedy) neighborhood to a very vibrant one.  While there are plenty of crappy properties/tenants still around, many of them have been snapped up and fixed up in recent years.

Feel free to PM me if you have any specific questions I can help with!

Per my original post, there's a huge need to be able to access data from anywhere so never really spent any time on a non-cloud-based option.  I have built out a cloud-based PM site that is 100% tailored to my business.  It does not have the bells and whistles of the paid services, but it allows us to interface with our tenants the way we want to and manage our accounting and maintenance requests at a level that was not available (or user-friendly enough) from any of the 3rd part vendors I've reviewed.

From the various online software we've demo'd within the past year, we were close to going with Buildium or RentecDirect but ultimately decided something proprietary would serve us better long-term.