All Forum Posts by: Obed Calixte

Congrats on the deal!

You mentioned " ...in order to get this to appraise out, I had to think outside the box a little."   What solution did you ultimately come up with, if you don't mind sharing.

Have you run the numbers to determine what your new projected property taxes would be? 

If not, most county property appraiser sites in Florida have calculators to get an estimate for the upcoming year. Can also have a quick general convo with the property appraiser office to determine how Save Our Homes/Homestead (if it applies) will cap the assessed value of the home. 

It’s unfortunate you had to deal with vacating a family member and having them treat you and your property poorly, but it sounds like you’ve learned quite a bit. Thank you for sharing!

This is great to see and glad you were able to find such a great deal in the Murray Hill/Riverside area. I look there regularly and it's always highly competitive. 

Fear of regret > Fear of failure is a very impactful line there. Thanks for the share!

I'm certain I'll have some questions for you, if not in the very near term, sometime soon! All the best. 

Quote from @Virgil Gonzalez:

@Obed Calixte

Understood, so essentially I can rent the condotels myself on long term leases and rent them out via Airbnb or Vrgo for a set daily rate to cash flow. Assuming I can find one that allows myself to hire any 3rd party vendors.

In regards to house hacking, i have the option for the next couple years to stay in my apartment low to no rent. So if I can build my capital expenses quickly by cash flowing opposed to house hacking a owner occupied that would be ideal.

Negative. You would have to either (1) own the condotel unit or (2) convince an owner of a condo unit to give you a long term lease.  Due to the income these owners receive on short term basis, I find option 2 unlikely, which goes to the roadblock I was mentioning.  

If you are looking to do rental arbitrage, targeting SFH or small multifamily may prove to be more fruitful as others have suggested.

Is the apartment you are living in near entertainment and would the owner be open to letting you do short term rentals on one of the units? Something to consider.

All the best!

Quote from @Virgil Gonzalez:

Quote from @Obed Calixte:

In regards to Florida condos: you may find it harder than you expect to find STR friendly properties that can be financed with traditional financing (ie, conventional loans) -- if traditional financing is your plan.

Condotels (condo + hotel) inherently are STRs but are considered non-warrantable by Freddie and Fannie, and therefore do not qualify for traditional financing. You would have to go non-QM, hard-money or private financing route. 

Ideally I want to buy and hold short term rentals. But given my low capital and interest in having lower risk for starting my portfolio, I’m leaning towards the condotels in high tourism areas through rental arbitrage until I build my assets more. Do you have any recommendations in florida, ideally ones that allow you to have your own property management? 

I want to make sure we're on the same page here because I see a rather large roadblock in the strategy you are mentioning.

With condotels, the units are individually owned and then rented out on short term basis by either the onsite property management company or a 3rd party of the owner's choosing. 

With rental arbitrage, one leases a property-- on traditional long term leases-- from the owner on a set price (or revenue split) and then rents the property out on a short term basis and keeps the difference. 

Since condotels are already rented on shorter timeframes, you will have to provide an incentive for the property owner to forgo a portion of revenue and/or increase booking rates (nightly price/occupancy rates) in order to make money. If you can overcome either of those problems you might have a bigger business opportunity on your hands!

What is keeping you from going the house hacking route? I see mention of not cashflowing in the property. If you havent already, I recommend looking at a number of the househacking threads. It may change how you view "cashflow" in regards to house hacking.   

In regards to Florida condos: you may find it harder than you expect to find STR friendly properties that can be financed with traditional financing (ie, conventional loans) -- if traditional financing is your plan.

Condotels (condo + hotel) inherently are STRs but are considered non-warrantable by Freddie and Fannie, and therefore do not qualify for traditional financing. You would have to go non-QM, hard-money or private financing route. 

I am highly interested in following you along on your journey. Development is part of my personal longer term goals so I know your insights will be helpful. 

What has been your experience thus far in construction and what are the key roles you would say one needs to have on their team to be successful in this space? 

Congratulations on the purchase! I look forward to seeing future updates. 

How long had you been searching before you found this property? The Lakeland market has been pretty hot.

It looks like they are funding 70% of purchase and 100% of construction, which isn't atypical for first timers. Hard money loans do come with a number of fees and they can often be between 1-5 points, so it's your job to get direct answers from the lender on what those fees are for, when are they paid etc. 

The interest rate falls right within the ranges I've been quoted in the past couple weeks so that piece does not seem out of the norm.

There are a plethora of hard money lenders out there so I highly recommend shopping around and find one that resonates with you and your goals. Ask about what documents and experience are needed for underwriting, what do they look for in a deal to lend on, who will be your point of contact, are surveys and/or appraisals required, what fees are associated with the loan, are there prepayment penalties etc. 

Hope this helps.