All Forum Posts by: John Lewis

I rent out to refinery workers just like @Paul Sandhu.  You'd be in a very similiar situation with nurses.  I would ask them where they are working and get the renters contact info.  If they are in town for work the likelihood of them tearing the place up is very minimal and they are looking for a place that they can book quickly and not have to bother with screening, setting up utilities, etc.  I use a very simple agreement that states how much rent is and when it's due. I get their contact info just in case and charge a premium so if there was small damage which is hardly the case I'd be able to take care of it.

I'm interested.  I'll shoot you a pm.  My renters are refinery workers as well.  Week to week but usually stay anywhere from a few months to a year.

It will be hard but not impossible if you have the right deal. I recently did a rehab where the purchase price was $56,500. I found a local bank willing to do the loan with 10% down. My rehab costs were roughly $30k. I used a combination of cash and a HELOC loan I already had. After repairs the property appraised for $125k so I was able to refinance and get all of my cash back and I'm still able to cash flow. In this case I didn't use over $20k of my own cash but did have a HELOC to help which is now paid off and I'm ready for the next deal.

All of my rentals are short term in a small town outside of New Orleans. Almost all of my renters are traveling construction workers getting paid per diem. One of the first things I'd look at is what industries are in the area you're looking at and see if they have traveling workers. Another good sign is a more rural area that has extended stay hotels there. This shows there is a need for short term housing.

@Alex Jones  I'm doing this alone for now.  At some point I'd like to get into multifamily and then partnerships may make more sense.

@Nathaniel Everett The first issue I made was hiring a contractor that didn't have an up to date GC license.  He's done plenty of work for me and my family in that past and is great but it was a hassle when it came to permits.  I also learned some valuable lessons when it comes to you get what you pay for when I tried to save a little money in some areas. 

I had done a few other renovations so I had somewhat of a team in place but it was still a learning experience.  Going forward I really need to put better systems in place but I think it went pretty smooth overall.  Ready for the REPEAT part now!

@Timothy Moore jr

Read as much as you can in here, listen to the podcast, and check out NOREIA. You need to decide what type of investing you want to do and then educate yourself. The hardest part is taking action but preparation is key.

So this was my first BRRRR deal and I have to say it is a very powerful strategy. I wasn't able to purchase the home in cash so I went to a local bank who was willing to loan me the money for the purchase with only 10% down. I used a combination of HELOC, credit cards, and cash for the renovation and then was able to refinance into a 30 year mortgage to recoup most of that reno. I could have refinanced for more but cashflow is also very important to me.

Investment Info:

Buy and hold about 45 minutes outside of New Orleans, LA

Purchase price: $56,500
Cash invested: $30,000

Single family home in a town with a lot of industrial/refinery work.  The plan for now is to rent furnished to traveling blue collar workers.

What made you interested in investing in this type of deal?

cash flow

How did you find this deal and how did you negotiate it?

Buddy of mine who is an agent offered it prior to listing on MLS

How did you finance this deal?

20 year loan with 10% down to purchase the home. HELOC used for majority of the renovation and then refinanced into a 30 year fixed rate loan for $80,000 at 5.5%.

How did you add value to the deal?

Full renovation including adding an extra bedroom and bathroom

What was the outcome?

Home appraised for $120k and was able to rent out for a premium due to renovation and renting out furnished to traveling workers.

Lessons learned? Challenges?

The renovation was the hardest part.  I need to have a better relationship with contractors and shorten the timeframe of the project.  

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Yes! 

I have a property that is giving me great return and cashflow currently but this is also the last year that I can avoid paying capital gains tax under the 2 out of 5 years rule. So here's the numbers...

I paid $60k for the property in 2010 and put about $40k into renovations. The house is a 3 bedroom 2 bath ranch style home with a 1 bedroom mother in law suite. I live in an area with a lot of refineries so I've been renting the house and apartment out weekly furnished and have had virtually no vacancies over the past 2 years. Could be luck with a few big construction projects though. I'm basically clearing about $2k per month on this property but I know my vacancy rate could increase.

A similar property with a mother in law apartment just sold down the street for $180k. It is very tempting to sell and avoid the capital gains tax but would be hard finding a property giving me these kind of returns. At the same time if I leverage correctly I could buy multiple properties. Any advice?

When hotels are being built in an area that isn't urban it is usually a very good sign for STR's. If the hotels are extended stays then it may be a sign that there is a need more on the corporate/traveling worker side of things which is where I focus on.