All Forum Posts by: Paul DeSilva

@Paul DeSilva My wood shutter business is way down due to a national lumber shortage too, hoping for a new supply by spring.

@Paul DeSilva buying section 8 rentals and STRs that are within driving distance to Dallas.

In August, I noticed that my rent collections were less stable than previous months.  None defaulting but some new late payers.  My local leasing market is soft.  People are not moving.  My City has had some turmoil. 

I am not deterred but there are not a lot of deals that are attractive these days.  Interest rates are propping the market up, but that doesn't move me at all.

I have bought this year - selective value add type properties that are low risk to be hurt in an economic downturn.  But this year is not one of acquisition growth.  Some buyers are awaiting an elusive market crash, thinking that 2008 is coming again.  I do not know, but if it is bargain time, it will be buying time.

I think that every market nationwide has been affected differently. I personally do not think that this will be 2008 all over again the metrics are totally different. We love a good bargain!

Closed on a house two weeks ago. We are going to offer it as a short term rental. The property is in a great location. Right in the middle of two universities and a major hospital. Less than three blocks from all three. I think COVID will be a net gain for my city so I am doubling down.

We’re still actively pursuing deals although my partner and I have had to change how we evaluate them and the criteria we’re looking for because of the added risk. 

On the underwriting side, we’re baking in a higher vacancy rate for the first two years especially when analyzing any deal because (1) some tenants are going to try to milk the system, it’s just a matter of facing reality and (2) this is going to add significant time to executing any value add plan if that involves turning units. We’re also accounting for much lower rent growth over the next few years and higher legal costs due to the expectation that we will have to go to housing court more than during “normal” times once the moratoriums have been lifted. We just had to adjust our offer price down on a property we are going under contract for shortly because of these assumptions, thankfully the seller has been reasonable though.

As for how our criteria has changed, we’re  now heavily discounting properties that aren’t in the prime areas of town. We also want to make sure that the properties have essential ammenities like parking and laundry. Due to the fact that the screening process is going to become that much more important we want to position ourselves with properties that attract the most qualified tenant pool. 

We’re still actively pursuing deals although my partner and I have had to change how we evaluate them and the criteria we’re looking for because of the added risk. 

On the underwriting side, we’re baking in a higher vacancy rate for the first two years especially when analyzing any deal because (1) some tenants are going to try to milk the system, it’s just a matter of facing reality and (2) this is going to add significant time to executing any value add plan if that involves turning units. We’re also accounting for much lower rent growth over the next few years and higher legal costs due to the expectation that we will have to go to housing court more than during “normal” times once the moratoriums have been lifted. We just had to adjust our offer price down on a property we are going under contract for shortly because of these assumptions, thankfully the seller has been reasonable though.

As for how our criteria has changed, we’re  now heavily discounting properties that aren’t in the prime areas of town. We also want to make sure that the properties have essential ammenities like parking and laundry. Due to the fact that the screening process is going to become that much more important we want to position ourselves with properties that attract the most qualified tenant pool. 

I have a feeling if I wait for the market to drop again I could be waiting for ten years.  All the while I would be missing out on all the wealth generators of owning real estate.  So I will be buying more this year I just need to know that I can hold through some rocky times.