All Forum Posts by: Nick Cooley

I am new to this. I have one rental that just happened to be my first home I bought in 2009. We kept it when we got our next home and that has been great. It did way better than our investments. Now, I am trying to buy a house in Denver just as a rental property and I just cannot figure out how to do this right to make money.   We are looking to get a single family home, but geez, I feel like more experience investors swoop in so fast and get it with cash.  Nick, any tips for someone new at this, to attain a home that can make some money?

I'm working on a 10 year portfolio plan for buy & hold rentals (SFR or Multifamily). I can reach my goals if I can hit 9% CoC return (on average). My secondary goal is 20% forced appreciation and 5% market appreciation. Experienced folks: have you been able to achieve these numbers consistently? If so, where? How did you finance it and what types of properties?

Through my contacts in the Airbnb world here in Denver, I'm hearing a lot of complaints about the city cracking down on basement unit and carriage house short-term rentals. I've heard of three distinct scenarios:

-- Sounds like the city is denying STR license renewals to basement units with any kind of kitchen. And this is in homes where the owners are meeting the primary residence rule.

-- I've also heard of some instances in which even if the basement doesn't have a kitchen, the city is requiring owners to remove any kind of door that blocks off the upstairs unit from the downstairs unit. 

-- Finally, I had some people tell me that their old carriage house is being declined for an Airbnb because it doesn't meet certain setback standards. (According to two people, this is for carriage houses that were built well before any current lot-coverage/setback limits were in place.) 

Anyone else out there seeing this? I'm not a complete government-get-out-of-my-business guy. I think it has a strong role to play, but this seems a step too far to me. 

@Nick Cooley Lawrenceville is more of an owner occupant destination nowadays, attracting your high salary professionals like doctors, attorneys, and tech. It's mostly all gentrified/tapped out on the investor side if you are trying to make money there buying properties as long term rentals. Airbnb is really the only thing that makes sense investment wise there anymore unless you have more money than you know what to do with and just want somewhere to park it with no regards to cash flow. Obviously it's a strong rental market as well but rents haven't kept up with prices there. Will continue to appreciate the same as the other A class areas in Pittsburgh now that it has "made it". 

MIllvale is still on the up and up. Has shown a lot of signs of hitting that next level and becoming attractive to more young professionals that don't want to pay high Lawrenceville rents but still want to be close to everything. The bike trail connects Millvale to downtown and a couple popular breweries/concert venue located in the neighborhood that attract people from other neighborhoods. Has the makings of a neighborhood that can continue to keep that momentum. Still a little gritty overall but have been seeing more investment in the neighborhood with people starting to renovate properties since the buy in is still pretty low for how close is it to town. A lot of the houses are dumpy looking and the business district is in a flood zone so I think those are two things that has been somewhat holding it back thus far from getting to that next level, but I believe it will eventually get there if Pittsburgh continues to develop as a whole. 

Hi everyone,

My current strategy is house hacking but l realized recently that it’s hard to make a property cash flow with current real estate prices. That being said my property has gained a lot of equity since I bought it and I was thinking of leveraging the equity to buy an investment in another market. I’d be curious to hear how it went for you and what type of equity cash out you used? Thanks! 

@Nick Cooley 

I have to concur with @David Lee Hall, III's assessment. What Lawrenceville's done is largely over, whatever exceptional long-term appreciation there was to be wrung from the place has already occurred in the last ten years. What you see now is stability in the appreciation in a neighborhood successfully reclaimed from the urban blight that came before.

In the same way, @Anthony Martin has also made a great point which is not understood well by out-of-towners. On a 2D map, Millvale looks like it should have a lot more promise than it does. But in the 3D world, it's hard to get in and out of Millvale to the south through that dinky 40th Street bridge and the place is built on very poor ground. Existing housing stock is both elderly and was mostly low-quality to begin with.

Millvale isn't the worst place to invest but it isn't the greatest. 

Pros: 

1. Good school district

2. Growing gastropub and microbreweries 

3. More investors moving into the area so homes are slowly starting to appreciate in value 

Cons:

1. A lot of drug use 

2. Hilly and horrible parking

3. Flood zone

Hope this provides a little insight. I live in Millvale as well.

1 and 2 are strong. But on #3 I feel LV is in the last 25% of development and generally will be overpriced and and more prone to corrections or lower appreciation as the market cools off. LV has been in top 10 appreciating markets in the last 10-12 years, at this point, unless you happen to get something off market, it is mostly spent and left for hedge funds and those types. Personally when I have bid on places there in the last few years I have been outbid by $50-60k. IMO that gives you a good idea where crazy money is going. Sure, if you can find a non-competition deal, pull the trucker, otherwise, I look elsewhere.