All Forum Posts by: Natalie Schanne

@Jared Aellis - Hi Jared! There are many opportunities to house hack by buying a nice single family house in a developed neighborhood (usually newer construction) or to buy a multifamily (2-4 unit, usually older, usually a little less nice before you've moved in and made upgrades). When you go for a multifamily, the income from the other units can boost your total purchasing power. So if you're qualified for a $450k single family, you may qualify for a $900k quadplex. I don't know all the ins and outs of the VA loan, so please talk with your loan specialist.

I’ve had the most wealth building success by buying dated 5+ Bedroom and 2+ Bathroom single family properties and renting furnished bedrooms to working professionals. The best roommate is a total stranger who has a local, professional job paying $50-70k+ and will agree to your lease and chore sheet. Someone who is choosing your apartment instead of a single apartment, but who could easily get a single apartment if he or she wanted to. Someone who is choosing a financially savvy decision to free up cash to invest or to pay down car or student loans faster, or someone who has a family elsewhere and is trying to funnel money to them by minimizing living expenses where they are.

Also, if you don’t mind driving, we have monthly SJREIA meetings at Rider University near Princeton.

@Justin Bailey - rents went up 20% year over year so it is possible they accepted someone at new market rent or it is possible they accepted a tenant who had few other options due to the background and credit check or pet situation. I would ask for bank statements showing receipt of the $900 on time every month for six months.

Some people are cashing out especially if they bought a property for cash (sheriff sale, foreclosure, direct from owner) and want to be able to re deploy it. I would be concerned about any big repair items that you may not budget for like a roof. I can imagine attempting to sell a property before I have to pay $10k for a new roof or hvac

@Chris Gordon - incompetence of wholesalers?

Yes incompetent if:

1. Offers more than reasonable comps / zestimate because that’s the “lowest price” the seller will agree to take and they are unable to negotiate them down (as you were)

2. Unwilling to drop contract immediately after noticing the contract needs a price reduction due to condition of the property (inspections) or lack of buyer interest (namely because they got it under contract for too much)

3. Unable to guide the buyer partner through to closing. Agreed to a deal with a newbie flipper who didn’t have the cash money to buy it from them and/or was likely to get skiddish.

Not totally incompetent if:

1. Buyer partner dropped the contract last minute, potentially forfeiting some non refundable deposit. Wholesaler is unable to negotiate an extension so they exit before their contingency expires

2. Talked to seller multiple times to reduce the price and seller did not agree until push came to shove and they needed the money asap. I’ve talked to many sellers who are like, I won’t sell this for a dime less than $400k, but if they died their heirs would sell it for $200k tomorrow.

Ultimately here the sellers lost big. It’s likely that you got a great deal. The sellers probably could have had a better outcome selling through an agent as is at let’s say 1/2 of the price they were offered by buyer 1. But ultimately you profited by them selling to you last minute at 1/4 price. And you provided a necessary and valuable service, and convenience, by offering to buy their property and then closing as you said you would.

I have plenty of conversations with sellers who take a higher offer and then circle back with me later because I’m a real buyer. Or they even sell for a lower price (if I’m not following up) to someone else because they never messaged me again. (For example, I offered $200k cash, they take an offer at $250k cash but that never closes, and they sell for $180k cash 3 - 6 months later without messaging me again.)

@Bruno Ligutti - it is unlikely to pencil in your favor. I rented a gorgeous Airbnb 3/2.5 townhouse in Orlando / Davensport for $100/night in off season (walking distance to restaurants, grocery, etc. and maybe 15 minutes to the parks). I saw the owner had paid about $200k for it a few years ago and the current zestimate was maybe $250k. I’m positive the owner managed it himself with just hiring a cleaning crew to come check it. I think you may be happier with something like this than a condo-tel.

I always ask myself - ok- why is the owner selling?

Also, often condos have higher property taxes (sometimes double) than if you bought an equivalent fraction of an apartment building jointly with other investors.

@Geoff Schroeder - I definitely agree with the list it empty part. A freshly renovated house / multifamily is exciting to house hackers. I've listed multifamily on both sfr and multifamily MLS to try to capture all the potential clients. Mine was a 2/1.5 and 2/1 so I listed it as a 5/2.5 with two kitchens and as above.

Tenants also have junk and sometimes block showings.

You should know within 2-3 weeks if you’re under contract at a price you find acceptable. One option is to offer to “provide rental applicants” to the buyer by having it listed for rent simultaneously with the purchase closing. So upon closing they have a bunch of people who are already happy to sign a lease.

@Lorie Alexandria - are you sure the appraiser will consider parking if you just identify the income coming in from all the units and show the signed leases? In my town the township “requires” off street parking for every tenant on the lease however if you present a lease for $3500 to the appraiser / mortgage company and there are only 3 off street parking spots, at least with me they didn’t say hey, this doesn’t match. They just appraised my house based on comps and I refi’ed it.

@Bailey Kramer - when a property is under performing expectations, what do you do? A lot of Airbnb hosts recently were complaining that their bookings were much slower than before. The generic advice on Airbnb groups was to spend more money on updated furniture and decor and then re-photo.

Have you taken any existing listings and cross compared your performance versus previous?

Or are you primarily onboarding new ones?

How does a potential client make sure they are buying the right things in terms of decor and staging? I’ve seen people’s interior design “recommendations” all over the board. I’ve seen some new setups with mismatched seating like a brown single seat paired with a white 3 seat. If you’re a hotel, the big franchise management companies want you to renovate your units every 6-8 years. Are the owners setting aside $$ for buying furniture and doing upgrades every few years?

@Joshua Milam - I recommend your friend take some personality quizzes and chat with a career / life coach at school to help determine what he can work at all day and not feel like it’s a drudge. Show the Venn Diagram of The Things we love to do, the things we’re good at, and the things that pay a lot of $$. Obviously you want to exist in either all 3 or at least pays $$ and you’re good at (and don’t mind doing it).

If I could reboot, I would go into Computer Science / Machine Learning / Programming / Analytics because these jobs seem to be growing, never ending, and if you can get hired, you can have a great w2, while building your rental portfolio, and also start a tech company side hustle (like cozy.co) potentially. An alternative is accounting to get a CPA so then you can be surrounded by other people who are inspiring with the businesses they run.

I chose to be a civil engineer and MBA (accounting, finance) and real estate agent. My classmates who went into data analytics, consulting and investment banking made the biggest salaries especially with stock options bonuses. A lot of their compensation is in stock.

@Cameron Brulotte - 99/100 inexperienced STR people thinking about doing STR say they want travel nurses. Probably 99/100 end up hosting people other than travel nurses if they ever get started. Because there's a wide variety of people who are looking for places - people with new jobs in town who haven't figured out where to get an apartment yet, or who are on apartment waiting lists. Most of my best customers are professional men who have another home (and often family) somewhere else who are working locally, usually without a definitive end date.

@Jacob Zimerman - Pleasure to meet you! If I talk to anyone with dealings in Chicago, I'll try to connect you two! (Consider joining your local REIA and talking to flippers in your community to build your investor network).

We are based in the Central New Jersey - Princeton Ewing NJ areas and service from Philadelphia Pennsylvania to New Brunswick / Edison NJ.

Cheers,

Natalie Schanne