All Forum Posts by: Mike D'Arrigo

@Matthew Pine I'm not sure if you live on Long Island and that is why you want to buy there, but there aare two big reasons I would advise against it. Suffolk County has very high property taxes (ranked 12th highest in the nation) and NY is not a landlord friendly state. That could be a problem with lower income tenants. Unless you have some compelling reason to invest in NY, I wouldn't do it but that's just my 2 cents. 

@Ben Moore Since you have a fair amount of capital deploy, you'd obviously need to buy several SFR's assuming you're financing. That could be a challenge given the shortage of invenntory in most markets. You may want to consider small to medium sized apartments. Have you identified a market yet?

@Steve Bebek what is the attraction to Savannah other than you and your wife visited there and like it? I don't know the market but doing just a little research I see that they get about 8 million overnight visitors a year which isn't a lot compared to other larger markets. A good STR market could be very different than a good MTR market. Define which kind of rener you are going after and then do some research on whether the market attracts that type. You're already buying out of state. Personally, I would broaden your potential market search. I'm not saying Savanah wouldn't be a good market, but as I mentioned, there are markets that get far more visitors. Kansas City for instance get nearly 25 million visitors year.

Short term rentals are typically vacation destinations or conventioneers while MTR are most typically business related such as traveling nurses and corprorate stays. 

@Matthew Lockwood I hope you haven't been sitting on the side lines for those 8 years. I'm not in Kansas City myself but we've been active there for 10 years and have a lot of experience. I'd be happy to jump on a phone call with you if you'd like.

@Molly Paprota most of our investors buy sight unseen, but they are not buying distressed properties. I think it's veeery difficult and risky to buy  property and try to renovate it from ooout of state without having seen it. The questions to ask yourself are:
1. How are you going to determine a scope of work and what the renovation should consist of?
2. How are you going to get the attention of contractors and trades people who have never met you and don't know you from a hole in the wall? 
3. How are you going to know if they are bidding the job fairly?
4. How are you going to oversee the work?
5. How will you know the work is completely satisfactorly and your contactor isn't skipping out with your money? 

There is a major labor shortage and getting good, honest and reliable is hard right now. Why wouldn't you take the time to go to the market, get to know it and set up your team? Do you know the Cleveland area? There's some really bad parts of Cleveland so you want to be sure you are buying in a decent area. 

@Alicia Durden
Hi Alicia, you're fortunate to be in a great market. We've been active in KC for aboout 10 years and have had a lot of success. Feel free to reach out can connect. 

@Jorge Abreu this is a great analysis. As we all know, every investmment has risk but not doing anything is a gauranteed loss. By sitting on the sidelines and not doing anything means losing 8 ot 9% a year with inflation Personally, I think stocks are the greater risk. When you look at home values over the last 50 years, there has only been one significant and sustainable decline in home values and that was the 2008 housing crash. Within 6 years, prices had fully recovered. In 1990-1992, there was a small decline of about 5% during the recession but quickly rebounded. What is really interesting is that during the period of 1979-1984 when interest rates hit 18%, although sales dropped, home prices did not have any real decline. This is why I don't beleive that today's higher interest rates will cause a decline in prices. What we're seeing is a decline in the appreciation rates to more normal levels, but after a year of incresing rates, we haven't seen price declines in most markets. 

@Jason Malabute Can you explain what the 6 months operating reserves is? I'm not clear how you are building reserves in to your analyses and what the reserves are for. Also, I think the 10% vaacancy rate is high. We've been active in boooth Indianaplis and Kansas City and the vacancy rates have consistently run 5-6% but that will vary by class of neighborhood. I'm sure there are neighborhoods that are in the 10% range but those aren't areas that we choose to be in.