All Forum Posts by: Patrick Giblin

I have used turnkey as a starting point for my entry into the rental market and I have had a great experience working with @Chris Clothier and the team at REI Nation. I worked with them last year and the way they rolled out properties to potential investors was a huge selling point to me, as it was not just through a weekly email (nothing wrong with that, I just work in health care so can't respond that quickly, especially in this market with such high demand)

I agree with others as well-just because it's turn key doesn't mean its set it and forget it. Also with that much capital a syndication may be worth considering.

Can anyone speak to this? Curious as to how it would apply to a large portfolio, or to syndications that hold properties across multiple states. I would assume multiple K1s would have to be filed for each state on your tax return? Obviously tax costs prep vary, but how large would you need to be to mitigate the potential extra cost of this work at tax time?

@Christian Canavarro No loan advice here but just a heads up on STR in Vermont. The legislature here has an eye on regulating it significantly. It did not come to pass this year, but I am sure it will be on the agenda again next year. Hopefully your agent has spoken to you about this, as it may impact you down the road if you look to try to do STR in VT. With a smaller population, especially around many mountain towns, there are not a ton of plan B options for these investment if the hammer comes down on STRs

@Chris Levarek Incredibly helpful thank you so much! In the process of working through all those numbers/costs you mentioned multiple times to make sure I have the numbers solid. Your point about pulling the equity out during refinancing impacting cash flow is definitely something I had not thought of while running through this. Cash flow out of the gait is definitely important to us, so I gotta run where we would sit based on how much we would pull out from the deal if we did it as is right now. Thank you again.

@Mark Gallagher That was an estimate provided from the GC who originally had interest in taking on the project that I mentioned in the initial post. He has experience flipping and does that in addition to his construction business. 

@Zachary Beach yes its far from the perfect deal. Thanks for the input

@Marc Rice Interesting option. Something we could consider. Thank you for your input 

@Jay Hinrichs Agreed! That is why the GC passed on offering to purchase himself with cash, use hard money for the rehab and then sell to us. When he first brought it to us in that format I was surprised as well and was not surprised he changed his mind.

@Jon K. To clarify...we are trying to purchase for 129K, put in 100K of rehab, hope to refinance for a long term buy and hold rental, not flip the property. ARV conservative is 265K. Looking for creative ways to finance while avoiding costs of hard money loan. It is listed on MLS but my partner is an agent in the area and knows the seller. Its an estate sale and they are motivated to sell. Listed at 149k and have had multiple offers from flippers at 100k cash which they have passed on but the seller would be open to selling to us at 129K if we could do cash. Time is not too big of an issue, as its been on the market for a while a needs a total gut to be livable. Unsure of mortgage or liens or property but pretty sure it is owned free and clear. I can't say I know much about subject to, seller financing may work, but still would need capital for the repairs.

This would initial be owner occupied with a MIL suite for short term rental, then transition to either two STR or two unit LTR in a few years.

My thought is look for better terms on a hard money loan than what I listed, or see if a bank could provide some type of construction loan.

Trying to make this deal work!

Cash Price: $129K'

Rehab Costs $100k

ARV: $265-285

Initial plan was to have an GC purchase house cash, get hard money for rehab and the flip it to my partner and I. However he has decided the margin is too thin for him to do that.

He suggested we purchase the deal using a hard money lender, getting a loan for 70% of purchase price, 100% of construction costs at 13%. At this time we do NOT have the capital to cover cash cost of house and entire costs of construction.

However my partner and I are trying to avoid the large costs of a hard money loan if we can and we are not quite sure any potential risks of using hard money since it isn't a flip and will be a buy a hold in regard to seasoning period and refinancing in a timely manner to pay back hard money lender.

Any ideas??

Trying to make this deal work!

Cash Price: $129K'

Rehab Costs $100k

ARV: $265-285

Initial plan was to have an GC purchase house cash, get hard money for rehab and the flip it to my partner and I. However he has decided the margin is too thin for him to do that.

He suggested we purchase the deal using a hard money lender, getting a loan for 70% of purchase price, 100% of construction costs at 13%. At this time we do NOT have the capital to cover cash cost of house and entire costs of construction.

However my partner and I are trying to avoid the large costs of a hard money loan if we can and we are not quite sure any potential risks of using hard money since it isn't a flip and will be a buy a hold in regard to seasoning period and refinancing in a timely manner to pay back hard money lender.

Any ideas??

@Nicholas Bolcon Very true about passing these type of laws at the local vs state level. However it is interesting that this bill is being introduced by members from very different areas of the state (Burlington, Brattleboro and Londonderry) which may be in an effort to build, "state wide" support. 

I am also now turned around by that last line. I initially read it as it only applying to first year, then afterward you could start STR. However now I read that 70% as the ENTIRE length of ownership, not per year. I may reach out to my rep for clarification as well.

Thanks for bringing this to light and your further research @Kathleen James.

There have been rumblings about this at the state and local level over the past few years, and I do not think this is too draconian given how progressive some legislatures/areas are of Vermont. My thought would be that most reps who represent the larger ski areas will be hearing from people within those communities about this once it becomes better known. If the past year has taught us anything here in VT, its that our economy is driven by out of state visitors and a law that is too strict on this could really hamper that moving forward. My hope is that with recovery from COVID still underway, ski area reps will not support this as it would damage economic recovery.