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All Forum Posts by: Patrick Shea

Patrick Shea has started 3 posts and replied 16 times.

Post: Buying Retail Properties to turn into Rentals

Patrick SheaPosted
  • Rental Property Investor
  • Atlanta, GA
  • Posts 16
  • Votes 35

A quick update. I purchased a property off of the MLS using my normal real estate agent. Overall the process went pretty well, going with cash helped me lock in a decent price. I purchased the house for 168K, with a few improvements and upgrades, I invested about 6K more for a total of 174K invested. I have the house listed for rent at $1400/month (I used rentometer to get an a 'good' cost basis). So far it has been listed for a week and has 5 showings with 4 applications and I am expecting some more this next week.

My final decision was based on opportunity cost. Since I used the money from refinancing my primary home, I needed to put it to work.  Also it was time to take action.  I think I have minimized my risk by purchasing it out right and then testing the market for what the property will rent for to further prove my numbers for purchasing additional houses in the area.

Once it is rented I am going to work on either refinancing or getting a line of credit for the purchase of the next house.

Hope this helps any new investors who commented on my thread.  Thank you to all the veteran investors for their expertise!!

Post: Buying Retail Properties to turn into Rentals

Patrick SheaPosted
  • Rental Property Investor
  • Atlanta, GA
  • Posts 16
  • Votes 35

@Jeff Copeland. Thank you for your reply.  That all makes sense.  I think that I am currently trying to force equity when my goal is to get cash flow.

Post: New Guy Looking @ House Hacking Vacation Rentals in Central, PA

Patrick SheaPosted
  • Rental Property Investor
  • Atlanta, GA
  • Posts 16
  • Votes 35

Hey Adam,

This is an interesting question.  I can tell you my experience.  We wanted to buy a lake house that we could get other people to pay for.  We selected an area that had good summer rentals (obviously because it is a lake house), but we also found a lake near a very good football program so we could also get fall rentals.  I have found that I haven't been able to fully cover the cost of the house based on our VRBO and AirBnB listing of the property, but it has been close so I just figure my usage, which is about once a month, I am basically paying for.

Here is how I analyzed what I could afford.  I used AirBnB and VRBO to approximate what I could get on a nightly rate.  I figured that I could get one week long rental and two weekends during peak season, every home game during football season (7 weekends), then about 1 weekend per month in the offseason.  This seemed to work out to what we have seen over the last two years.  Our occupancy is around 100 days.

We have set up our "Team" with a good cleaning lady and a couple local handy men.  This works for us since we are relatively close and we visit the house pretty frequently.  In selecting your house, you will want to make sure that house you select has very little maintenance, especially yard work.

I have found that real estate agents really don't understand short term rentals and since we were buying just one property, we really didn't look for a real estate agent with short term rental experience.  It was more important that she was available for when we could look at houses and that she would be there for the inspection, appraisal, etc as we were not able to attend.

I would list on both VRBO and AirBnB if you are buying near Hersey.  VRBO nets us our longest rentals (week long) and AirBnB fills in the weekends pretty well.

Hope this helps.

Post: I NEED SOME HELP ON WHOLE SALE

Patrick SheaPosted
  • Rental Property Investor
  • Atlanta, GA
  • Posts 16
  • Votes 35

Best thing you can do is find Whole Selling Real Estate books and start reading about their strategies.  There are a couple of Whole Selling BP podcasts with some really successful whole sellers, you can listen to them and take notes, they will normally talk about books that they read.  There are also some good forums post here as well.

Post: Buying Retail Properties to turn into Rentals

Patrick SheaPosted
  • Rental Property Investor
  • Atlanta, GA
  • Posts 16
  • Votes 35
I am living and investing in ATL, well starting to invest. I am have identified my target area and the types of houses I am looking for, fixer uppers and turnkey. In the area I am looking I am able to purchase all cash and made 5 offers last week via the MLS and my agent, none of which got a counter offer and a few didn't even get a call back. On turnkey I am offering around 80-85% on the comp and on the fixers I am offering 60-65% of list which equates to about 75% of ARV with repair costs included. My struggle is that I know I can cash flow at List price. But I really wont have any instant equity. My plan is to buy cash upfront, get repairs done and tenant in place than finance so I can buy another rental. I will need to minimize the amount of money left in the property so I can continue to grow my portfolio. My driving goal is to cash flow. Based on how hot the market is in the area I am looking at, most houses sell at 95% of list price within 30 days, should I be offering full price and just slowly building cash flowing properties until the market cools off?

Post: [Calc Review] Help me analyze this deal

Patrick SheaPosted
  • Rental Property Investor
  • Atlanta, GA
  • Posts 16
  • Votes 35

Isaac, I currently rent two properties on AirBnB and VRBO, one in Atlanta and one on a lake near Clemson.   Did you get a chance to see what other bookings are in that area as far as actual rental rates?  In my experience, my ATL house rents every weekend but not much during the week so I am looking at around a 70% vacancy rate.  My Lake house does better, but is seasonal (late spring to early fall) and Clemson home games and I am around 60% vacancy rate.  I know that LV is jumping, but I am not sure that your vacancy rate is accurate, especially as you are starting out.