All Forum Posts by: Peter Ricca

Thanks Tim -- so just to clarify, you vote for NOT allowing extra animals with increased rent? Basically you're saying the animals will cost me more in property damage than what on-time rental payments will bring in?

Hi BP community,

I purchased a SFH in a Columbus, OH suburb. Got 2 tenants to rent the house for slightly above market.

Their credit is awful, but their income is solid so I went with it. I allowed one dog in the lease and they never mentioned other animals.

My handyman went to repair the shower today and reported back that there are in fact 2 dogs and possibly up to 3 cats.

The tenants have only been in the house for a month, but have paid their 2nd months rent on time and are otherwise low touch.

The property is older and not updated, but I’m obviously concerned about what the excess animals will do to the house’s condition.

I don’t want to sour the rapport I have, plus the rent is very solid, but this is a huge red flag. What else are they not telling me?

Thoughts on how to handle this? COVID times makes eviction nearly impossible so I’m treading lightly.

- Peter

@Ondrej Brown Thanks man! The AirBnB option is tempting, but is a bit much to manage since I won't live in same state as the house, and I will have to shell out cash to furnish it so I'm leaning towards yearly rental. 

 One thing I suggest is checking AirDNA for good AirBnB data on your market. Will give you really good insights into how much you can expect to generate. If you PM me I'll send you the one I got for my market (showing about $1k/mo for my property). 

Congrats on the house hack!

It's very worth it. My suggestion is to consider the pros and cons of your 2 options.

1.  How much of your free time and personal space do you value in your house? The AirBnB route gives you the option to have stretches of time where you have the whole house to yourself, yearly roommate tenants are there the whole time.

2. One is less predictable income, the other is more stable steady income though (although AirBnB may have higher upside depending on your market). 

Good luck and looking forward to hearing about your success!

- Peter

@Brenden Mitchum excellent points, Covid is definitely looming concern here, but I didn't want to stop me from grabbing what appears to be a good deal. 

Great point on keeping it flexible so I can pivot. The "College Rental" concept was solely because the city has a popular liberal arts college in it, so I'm assuming a lot of my rental demand will be students, but I think I could also find some solid post grad tenants, young professionals, etc. 

Thanks for the advice on adding the bathroom first, I hadn't considered that and will focus on the bathroom. 

Hi BP -- I'm in the process of closing on my 2nd real estate deal (central Ohio). I have several directions I can go with this property and wanted to ask your opinion. 

Property

• SF Home 3BR 1BA 
• $125k cash deal
• ~$500 closing costs 
• -- $6,000 for new furnace (most likely as it's end of life) 

1. Standard College Rental

• - Cash out refi with a 30 year fixed, get 70% of my money back (possibly more as I'm buying it under market value) 
• - Rent to local liberal arts college students for $1200/mo and (according to the rental calc) cash flow positive around $300/mo 

2. BRRRR 

1. - Spend another $5-6k sprucing the place up with new pergo flooring fixtures
2. - Spend additional $20-30k adding a 4th bedroom to the back porch area (I'm a noob, so not sure how well I'd do price wise first go around) 
3. - Refi at the value of an updated 4BR comp and pull out 70% of that
4. - Rent for a likely higher cash flow (figure around $500/mo) 

3. AirBnB Rental

1. - The college and bustling little downtown has provided a decent AirBnB market
2. - According to AirDNA report I can average about $1100/ mo doing short term rentals (good occupancy rate and solid demand) 
3. - There is intrinsic value here being that my brother lives 20 min away (I'm in NJ) so my family can use it as a place to stay when they visit him. 

Overall, I'm happy that I'm under contract and barring any crazy inspection issues, I think this is a good deal in the fastest growing county in Ohio. Would love your feedback! 

@Kevin Lefeuvre low rates! I’m in contract on a turnkey MF property and my cash flow is looking WAY better than their initial pro forma given the huge rate decreases.

@Mark S. Any update on your experience?

Austin - that is awesome! Congrats on your success, I'm happy to hear someone has had success in that market. Would love to connect on the phone and pick your brain for 20 min later this week or weekend. My brother is a police officer in Dublin and former military as well and he's also my business partner for our BRRRR strategy. Who knows, maybe there's a way we could do a deal together in Columbus at some point?

Hi @Adam

@Adam Fansler I'm looking for a GC. I would like to close on my first BRRRR property in the next month, but the obvious large variable is the rehab cost. Looking for an honest contractor, doesn't have to be the cheapest, but I need quality work done as close the estimate cost as possible. Also open to agents if you're good at finding these type of deals in the Columbus area.