All Forum Posts by: Misael Herrera Granados

Quote from @Cameron Ward:

Interest rates don't seem to be going down as of right now so selling isn't particularly ideal however if your main priority is to get out of the hole then you may just have to. I'm a part of a construction company that I can put you in touch with to see if they can be of some help if that suits you.

 Thank you! I would definitely be interested. Could they work in the Kansas City, Missouri area? Selling isn't the course of action I'd like to take at all, it's more of a last resort. I can get out of the current debt in the next 15 months, but adding $10k will keep me in the debt hole for longer. 

Quote from @Chris Seveney:

@Misael Herrera Granados

Is the water coming up through the floor or is it through the walls?

First you need to understand and analyze the situation. It’s rare for a home to not have a sump pump and then need one

Typically perimeter foundation drainage and grading (sloping towards house not away) are biggest issues with foundation leaks

Start with that and then determine cost.

Thank you for your reply!

 It is coming in through the cracks in the floor. The house is over 100 years old, and it has a stone foundation which is why it has no sump pump. However, over the 15 moths I've had the house, I have not had this much water seep into the basement before. I had a foundation repair company look at this and they recommended a sump pump. 

Quote from @Steven Wesolowski:

If your intent is to not sell and continue to hold, then I would look for making the tenant as happy as possible. I am not 100% sure what your relationship to your tenant is, but if they are the type where they understand you would have to take on the burden of the additional cost in necessary repairs, and they feel they can continue to be a long-term tenant because you are helping them, then on the bright side at least you will still have rental money coming in. 

But help me help you dissect your situation:

You've already done $30k rehab, and already informed at least $10k debt addition highly probable. How much are you currently cash flowing ? What is dollar amount still cash flowing if you actually do the repairs?

Dependent on the lease contract, of course; have the tenants expressed readiness to leave if you don't fix the problem? If so, what date will they press to leave your property? How much will they pay you to leave your property?

Your mortgage rate at 5% currently, what type of loan is this? Was this through credit union or bank? How much do you still have owed on paying off the house right now?

DM me your details and reply here. I am confident you will get various responses before New Years. Now is the time to take a knee and re-assess, mitigate your risk. Start planning for first quarter 2024 right now.

First off, yes! This is 100% a property I was planning on keeping long-term as a buy-and-hold asset. Which is why I'm so tempted to get the loan, since 2 to 3 years are nothing compared to the rest of my life. Here are my numbers:
Cashflow: $578.54 (this excludes the payments to the current debt, which is on 0% interest for 15 more months)
- Paying $200/mo as minimum payments, and I estimate to have personal reserves to pay off this debt at the end of the 15 month period so it doesn't accrue any interest.
- That leaves me with $378.54/mo cashflow right now. I don't have the number in front of me, but if I take the loan for the sump pump, it was roughly $325/mo for the monthly payment.

The tenant and I have a good relationship. I was upfront with her and told her this was something I was not prepared for and would have to do a bit of digging for a solution. I told her that I'd understand if this was something she didn't want to deal with and preferred to leave. She told me she would let me know if that would be the course she takes, but no timeline yet. If she leaves before the lease term ends, I would keep the $1400 deposit. Since this is an issue on my end for foundation, I don't think it would pass for me to have a certain amount of payments given to me (other than the deposit) if she chooses to leave.

The mortgage is 5.375%. It's with a Financial Institution called Specialized Loan Servicing (SLS). I put a 5% down payment on the house as a primary residence, which is how I was able to work on it for 15 months.
- Purchase price $125.9k
- Remaining Balance: $117,673.11
- ARV: Not sure on this one since I haven't had any appraisals, but without accounting for any repairs on the house, the value went up to $132k over the 15 months.

Thank you very much for your help!

My rental property is on it's first month of lease. I've spent close to $30k renovating it, and it looks great! Numbers are great too, as of now. However, an issue arose that I haven't had with the property until just this month. I believe the foundation just happened to hit its tipping point this month, so the basement has started to have water seep in through the cracks. The tenant is obviously not happy about this as the basement currently has carpet. I foresee having to redo the electrical system at some in the next five years, and that's something I was prepared for, but the foundation starting to leak is not something I was prepared for.

I am not in the financial position to do foundation repairs at the moment. I'm already paying off $16k of debt for the repairs on this house, and a foundation sump pump will add AT LEAST another $10k to that debt. If I were to take out that loan to fix the foundation, it would take most of the remaining cashflow away since I'm already using part of it to pay off the $16k. This would leave me with very little cashflow to replenish the reserves for this house.

My question and what I need guidance with is: Would it be best at this point to just sell the house and possibly break even, or should I take the loan and bear the next three to five years of paying it off? The reason I don't want to sell is that I've spent 15 months renovating this place, and my mortgage rate is 5%, an interest rate that is unlikely to happen again for many years. 

Hello! Does anyone in the KC Metro area know any good photographers who could come take pictures of my property for listing?

Quote from @Caleb Brown:

How does the street look? You are just East of HWY 71 which isn't ideal. For MTR in KC you generally want to be West of HWY 71 and closer to Troost. You are right off Emmanuel Cleaver which helps. 

Is it not ideal because of the quality of the area, or because of the distance from everything in the east?

Also, here are the views of each side of the street.

Quote from @Mel Adams:

Seeing how the other listings are distributed in your screenshot would make me a little nervous. Are the three just north of yours booked right now? 

It sounds like you're already on top of this, but if you're targeting travel nurses, keep in mind the majority are women and if you think the neighborhood is a little sketchy, they probably will too. Hopefully someone more familiar with the area will chime in, but if you can get by being in that neighborhood, you might even have to undercut price to compete with not being in the preferred area. 

Good luck!

 Mel, thank you for your reply. :) It looks like 2 out of the 3 closest locations (one of them just a block away) are currently booked. I may end up doing long term rental if I have to undercut the price by a lot.

Quote from @Melissa Hartvigsen:

Hello @Misael Herrera Granados

@Misael Herrera Granados
I am in a different market than you, in Portland Oregon, and have mid-term rentals at my house (two 1-bedroom options with kitchenettes each about 400 sq ft). My location is a similar distance to downtown, hospitals, and other amenities you mentioned. In the last six months I have seen a substantial increase in Furnished Finder listings. I think many Airbnb hosts are branching out to mid-term to keep up their occupancy. This increase competition is taking longer for the rest of us to get bookings, and I see prices dropping. In fact, the prices for mid-term furnished units are starting to get close to the long-term rental price.

For the first time in three years, I had a gap between travelers of 3 weeks. Normally I have an average annual vacancy of around 10%.  I have heard other MTR hosts have a vacancy of 30% annually. In my market larger full houses are taking even longer to fill up, a friend of mine with a full house gave up on mid-term and rented to a long-term tenant. 

With 59K MTRS competing with your property, you will have to price at the bottom of your competition to get booked. I recommend comparing the rent on a long-term rental to a mid-term rental. Then, calculate the cost to furnish the mid-term rental and determine how long it will take you to break even with the additional up-front costs.

Another suggestion is to seek out bookings in other ways. I would contact a insurance placement service to see if there is demand for furnished housing in your area.  Insurance companies need places for families who are displaced for 3-6 months when they experience a loss due to fire or weather-related issues. Here is a link to a popular one:  https://www.alesolutions.com

Good luck to you!
Melissa

 Melissa, thank you so much!! One thing I want to clarify that I didn't state very well. There aren't 59k listings in the area, there are 59k searches. So, 59k people annually search for MTRs to book and stay at. 

Thank you so much for that website! I didn't know about the link with insurance placement services. 

Hello all, 

I purchased a property in the KC, MO area and have spent the last 10 months remodeling it. The property is almost finished and the interior has a full modern look with brand new paint, flooring, carpet, bathroom, kitchen, etc... One doubt that I keep running into though, is the fact that the location is not the greatest. Personally, I'd give it a C rating and the houses around it aren't all in the same condition as mine. I realize I did not hunt out location as great as I should've when I was looking, but the purchase was made BEFORE I learned about "location, location, location". On top of this, I was rushed with the fear of increased interest rates. 

My question is, would it still be possible to put my property as a MTR in a C-rated location? Pros to this area are:
- The plaza (nice area) is a 5 minute drive
- Downtown is an 8 to 10 minute drive
- KU Medical Center is 8 to 10 minute drive
- UMKC and Rockhurst University are 3 to 5 minute drive
- Furnished Finder shows 59k searches for MTRs in the area, and my property is at the edge of the heavy listing location (see image below with the red circle)

Overall, it makes me nervous to furnish this property if it's not even worth it to put it up as a MTR if I don't even get any bookings. Any advice?

P.S. I'm open to network with local MTR investors! I'm new on this path and want to grow with others in my real estate journey. So, if any of you are open to meet up in person to chat, I'd love to take you out for coffee or lunch! :)

Hello all, quick question. I purchased my house in September of this year, I am in the middle of updating my house to rent the rooms and make money from them next year. Since I have not made any income in the year of 2022 from the rooms, is there any point in going to a CPA to find deduction on the house? I have so far spent close to $20k on the house (down payment, loan fees, costs to remodel) . Not sure if I can use any of these as deductions this year since I have not made any income from the house and it was purchased as a primary residence. 

Thoughts? This house is in the KCMO area. 

Thanks a bunch!