All Forum Posts by: Richard Elvin

I guess I would look up what the furniture would go for on CL, FB marketplace, Offer Up and go from there.

The "heat" towards arbitrage is that the arbitrager can always walk away without any recourse for the homeowner, which is exactly what is happening. It creates, as the OP stated, hardship for the landlord, but not the arbitrager, "...I knew the hardship a vacancy would have for them...".

It's nice to see the OP is working on reducing that hardship! I commend them for that!

As far as the cleaner, I'm not familiar with charging for a referral, maybe that's a thing, but if I considered someone a great resource I'm going to refer them. I would also refer someone that is a great resource to any of my friends without charge. 

Just my 2 cents.

@Patrick K. I'm not a big fan of the model, however, I love numbers. :)

Here's how I would evaluate: (all numbers are random, just for example)
Setup cost divided by the lease term. $36,000 setup, 36 month lease term = $1,000/month

Add all monthly expenses so you know what is expected outflow. 
Setup cost $1k/month, + lease $3k/month, plus insurance $1,250/month, plus utilities $350/month, plus maintenance $150/month, etc, = $5,750 expected outflow/month

Then take expected income $7,500, subtract expected outflow of $5,750 = $1,750/month expected incom

Multiply $1,750 times lease months (36) to get gross expected profit ($63,000) and subtract setup cost to get net expected profit ($63k-$36k) = $27k 

To get total ROI multiply monthly expected expenses by lease term, add setup cost, then divide gross expected profit by the result (($5,750*36)+$36k) = $243,000

ROI $63000/$243,000 = ~26% or ~9%/year.

All numbers made up on the spot for visual display of calculations. Again, this is not something I have any interest in, so I would definitely want to fine tune my equations before building a spreadsheet to calculate.

Off the top of my head, this is how I would evaluate arbitrage. I hope it's helpful as a thought exercise at least.

@Tiago Montoya I'm not an expert, but have spent a significant amount of time and energy researching tax liens/deeds in my state and the state adjacent to me. (TN and GA)

I'm not sure how the software you've referenced would add value? What did they promise it would do that you can't do yourself? If it's supposed to do due diligence for you I would suggest that it is worse than useless. The software will not be harmed if you buy something that devastates you financially. Investing is risk, knowing what you are risking and assessing if the return is appropriate to the risk you are taking is crucial. 

Auction.com is free and has event notifications if you want to know when/where auctions are held. 

If you are wanting to know resale value, zillow.com's recently sold listings can give you direction on that. It's part of due diligence to know for yourself, not some software's opinion, what a specific property is likely to resell for. (If you are looking to flip, you didn't mention what your strategy is)

Best to you in your endeavors!

@Carlos Ptriawan @V.G Jason I agree with you. This is terrible advice and goes specifically against what the OP gave as his "why" on debating paying it off, "...at this stage of life as burning gas in the RV [is] far more appealing than more debt...". lol

I think what @Bill B. said is a good option, removes the worst of the interest while retaining reserves.

@V.G Jason 100% agree with not investing on the basis of an STR, which is why I've been looking outside the city, inside the city there's a premium for the STVR permit. I'm underwriting everything for LTR and paying a premium isn't helpful.

The other, I would say bigger, issue is that Chatham county specifically excludes getting an STVR permit if they HOA is against STR's. Trying to figure out if a house is in an HOA, and then sleuthing for the HOA docs, then reading through the legalize, is very tedious. It makes deciphering the STR rules look easy. lol

@Michael Baum I've researched Savannah extensively as that is my #1 market if I go the STR route. The tourism adds a lot of value to the local economy, so I don't see an outright ban happening. That said, my searches are setup outside of the city of Savannah as what @Julie Gates said about adding 20-30% for the STVR certificate is true and it also makes the property sell quicker, neither of which is ideal for an OOS investor.

@Katie Konner Search these forums for "arbitrage" and you'll see there are a few that advocate for it, a few are cautious, but will do it with thorough due diligence and well vetted arbitrager's, but most of us that have landlord experience are opposed. 

Personally whomever would want to arbitrage one of my properties would have to have an excellent business plan. They would have to be capitalized well enough that they can sustain the lease even if things don't go as well as hoped and have assets I could put a lien/judgment against if things go sideways, these would either have to be in there personal name or in whatever LLC they're signing the lease with. They would have to sign a personal guarantee as well. I would require a clear lease with detailed expectations of who is responsible for repairs that was for a minimum of 36 months, with rent escalating annually.

Even then I would most likely go with a good property manager vs some random person. A property manager takes their cut off the top, so the better the property does the more you make. An arbitrager's business is somewhat adversarial in that they want to rent for less than they'll make and then they pocket all of the difference vs taking a cut and you pocket the difference.

Several of us have written ad nauseum about why this is usually a bad idea for the property owner. Again, search through these forums and you'll find there are very few, but there are some, landlords that feel this is a good fit for them. Most of the people making money off of arbitrage are the youtube guru's promoting this as the next "get rich quick" scheme. The property owner is the one left with lien's/judgments against their asset if the arbitrager racks up fines from the city/county or gets sued for negligence.

Is the property they're asking about in Charleston?

I'm not in the STR world, so take anything I say with a grain of salt. :)

Overall I think it looks really good. 

Two minor things I would improve on: Accent lighting for the outdoor space and a night time picture showing it off. Maybe with some people in the background so your prospective guests can "see themselves" having fun there. 

Second, the picture overlooking the city at night is really nice! It showcases the view really well. Picture 41 (at least currently) has more of the balcony railing than it does the view of the mountains. I think you're trying to show that this is the view from the balcony, but I would recommend that you caption it with that, and just show the unobstructed view in the picture. I would also add a few more pictures of views from the balcony. Just my two cents. :)

Best to you!

@Will Sifert I think this is the 1 out of 100. 

It's almost always the map, not the structure, that is off, however, last week I put in an offer on a rehab house that the legal property description was, "the East 7 and 1/2 feet of lot 3, lots 4-6". lol.  Lot lines and houses from the very early 1900's.