All Forum Posts by: Paul Smythe

Nothing like a fake story to reinforce one's political beliefs. Have a better filter people instead of just believing everything negative you read about opposing politics.

Also, keep politics off of a real estate forum.

That's a negative cash flow deal I assume after management, maintenance, taxes, and insurance. If you think you can make it work, though, you'd be growing equity really fast with that low interest rate. I'd hold if you can break even at least. Negative cash flow is hard to swallow in my opinion, though.

I'll provide a different viewpoint. We are not seeing a typical recession, and post-COVID success in the STR industry is not evidence that vacation rentals are recession-proof. On the contrary, demand is higher than ever because the vacations stopped for a year.

STRs are the new HGTV flip. Everyone is doing them. I see more posts on BP about STRs than any other investment type. This feels like way more of a peak than normal market operation.

I still think STRs are a very valid investment. I don't believe they'll go away and there will always be demand. Question is how much demand and whether it will be enough to support the entire market.

I worry for a lot of people who bought properties as STRs more recently. Most of the time, the prices paid for those STRs are higher and an LTR wouldn't be able to make enough money to justify the price. Any sort of dip in demand could really hurt people with tighter margins and no legitimate backup plan.

I can't see the future, though, so what do I know?

@Ben Cochran in a perfect world, you're getting 10% cash-on-cash return on your money (equity). That means your $500k equity would be generating $50k/year in cash flow. Easier said than done, but that's what I'd be aiming for.

@Steven Hayes it'll be hard to truly retire with "only" $1 million. As Arn said, it's maybe $60k/year, which is very good, but not something you're likely to retire off of.

@Justin Mathews great, sounds like you're on top of it. As far as how much, doesn't hurt to pull out as much cash as you can. That said, the market is tougher so it's not always easy to deploy the cash. I guess it's a question of how confident you are in finding something new to put the money into.

I clearly didn't read the full question. I like the line of credit option, but assuming it's a standard refi, hard to say the right amount to borrow. I think that's your decision based on your own financial picture and goals.

88k NOI would give you a value in the low millions (at least) I assume.

Why not start marketing it now to find a tenant? Everything gets easier once you've got a lease in place. Unless the roof is going to get in the way of showing, you're probably best off if you get to finding a tenant ASAP. Get a local broker who can give you a realistic market rent and timing for tenant placement.

Seems like you've got to come up with the money somehow, though. Commercial is a tough world. One issue can cost six figures, as you're seeing.

Also, I'd highly recommend getting multiple quotes. You never know how much money you might save.

Clearly I'm in the minority, I sold everything. The timing felt right and the appreciation outpaced the cash flow for me. Now that the market is a tad less crazy, I've been working on rebuilding my portfolio with a lot more buying power.

I think I've seen one good wholesale deal in my market in the last 2 years, and that deal had 5-10 offers from investors. I know the buyers are out there, but the inventory is limited.