All Forum Posts by: Richard E.

regarding the crime thing, when it comes to BRRRRs, i would tend to trust my boots on the ground more than a crime map. And if you don't have boots on the ground in any given spot that you trust more than the crime map, then it might be time to get new boots on the ground---

That said, good BRRRR deals are indeed not that easy to find anymore, from public sources (and off market deals as always aren't that easy to come by)

There are companys out there that do mailer blasts that promise really high response rates based on proven metrics. I am going to try one, i will email you their info (i know a couple people swearing by them, i have never used them personally though, im just about to start)

Fellow LA Investor Here. and yeah LA is super annoying but it all becomes worth it when i get a heloc on the place i bought in 2017 (and overpaid for by about $40k, as I had lost out on a bunch of deals and bought this out of sheer frustration) and i am now buying 2 properties (In Indiana) and BRRRing them, all with nothing but that HELOC money---- that's what LA is good for imho.

I'd quit if, no matter what I could think of, i couldn't think my way into 10% returns no matter what i did. At that point id shove everything into vanguard probably and call it a day.

@Michael Hyun

FYI the thing about yosemite, is, per local property managers, well over 1/2 of the people are foreigners who come there, so that market is strong to the point of international renown (as opposed to just a local spot). So that is a positive. Problem there though is that, every agent ive spoken to tells me they havent sold a house to a primary homebuyer in like over a year- all are STR investors. So that saturates the market, and drives up prices due to everyone on the bandwagon. But now that rates on 2nd home loans particularly are through the roof, these things are tougher. Its hard to see how values arent going to take a hit. (And im in escrow of course, before i thought of all this - lol) sigh.

Listmates,

I am getting real tired of paying a million premiums, and extra payments for fire, flood, str, and whatever else, The payments constantly seem to be due, autopay doesn't always work, and its overall just really annoying to deal with all of it. 

I get that these are quality problems to have, but i am wondering if there is like a one stop shop, where i can get a master policy maybe that just covers everything, with a minimum of payments.  This is all just alot to keep up w/ otherwise.

Wondering how everyone else deals w / it, and if anyone has any insurance "master plans" they recommend? I got referred to Arcana insurance but they don't write in CA and I think they don't write for STR's. (Forget exactly but they were not the right fit)

any help/thoughts appreciated.

Thanks for the responses. I am looking at the STR as basically the same as any rental at this point. It is not generating the typical "hand over fist" STR income (or this one wont). It will generate what a very good long term rental will generate (but i will have it managed so it hopefully won't be a headache, then if i self manage i can increase the income alot, which i may do once its established)

So because I am looking at STRs at this moment as more long term investments, I am alot more concerned with how the values of the markets are going to hold up from an appreciation standpoint.

When I first started doing STRs i was paying $200k for a place that would net 2k a month maybe. In that scenario, i truly don't care what happens to the property value (within reason) so i never even asked the question of "whats the market going to do".

Now im paying 500k for a place that squeaks out $1200 if its lucky, which is fine by non-str investment standards, I feel the STRs kind of need to meet the same standards and more long term stuff, e.g. they have good long term appreciation/growth potential.

Just not sure if vacation-only markets are the places to go for stuff like that.

Hi all,

I am a little curious what veteran STR people think about the current market- specifically, VACATION ONLY MARKETS. By vacation only markets, I mean places where basically nobody is moving for a primary residence, and prices are totally driven by vacation rentals.

My actual example: I am looking to buy a place near yosemite National Park, offer is about to be accepted. The facts are these:

----I am being quoted over 6% for 2nd home/10% down loans, which I have used in the past to buy STR Properties;

---Rates for 20% down loans aren't tons better; 

----House Prices are through the roof, all time highs

----Every house in this market is being bought as an STR (meaning this market is not a primary home buyer market/people are not moving there to live, prices are driven solely by STR buyers)

I am just wondering if the veteran STR investors are shying away from these types of vacation only markets, due to the rise in rates and prices, waiting for those markets to cool off (since it seems like they should, since STRs will be making less and houses and loans are harder to get- or if people are still just going on with business as usual buying STR's in places like gatlinburg, port st joe, etc. (e.g. places whose prices are driven solely by STR sales) with prices and rates as high as they are, and assuming it'll work itself out.

I am balking a little at my decreased ROI I guess, and wondering if its smarter to hedge ones bets in a market with a better exit strategy - maybe a market that isn't quite as lucrative on the STR side, but is a real housing market where people actually want to live also. (like Orlando, maybe joshua tree) This way if STR buyers dry up, the market will still hold its value.

Just curious what the bigger STR people are thinking on these sorts of "vacation only" STR markets, as I find myself doubting them a little. Mainly because, if I am doubting them for myself, then I figure so might other STR investors be, and therefore, since these markets are dependent upon STR investors to continue to drive prices, then demand is going to dry up and prices will come down.

hope i made sense. its kind of late for me- any thoughts/opinions appreciated.

HI there

I have not found a lender that will let you take a 10% vacay home loan and take title into an LLC directly. If anyone knows one, I would love a personal message regarding that.

Typically you can always just take title into your name and transfer it to the LLC. If the LLC is in CA and you are the only member, the liability protection isn't as great as you'd want it to be. If there are multiple members, it gets much much stronger.

CAVEAT, this may be a violation of your loan agreement so should look at that. Any title transfer may be a violation, and honestly all sorts of stuff is a violation. (Example, you get a primary home loan, then move out and rent it out, that's also a violation). Neither me nor anyone I know has seen this ever result in lender action, if the mortgage is always paid- but i suppose it could happen.

The other problem with this is that, in terms of having assets on the record, once it goes into your name and is recorded even for a second, people looking you up will be able to find that property, for ever and ever. And then they can just track it right to your LLC and know you have it.

Hence taking directly into the LLC is kind of nice. Liability protection though, honestly, dont rely on the llc ESPECIALLY if you self manage. Get a big insurance policy if you have a really high net worth over and above the one that airbnb/vrbo provides.

Esteemed listmates,

I am new to out of state investing. Been looking in a few markets, and now that the crime map has been abolished from all the real estate sites, i began looking at other resources where I could find it, and the question kind of occured to me:

What resources, or combination of resources, is best to use for looking at a neighborhood, from out of state? Like for example, i have a city in mind (memphis TN) but as alot of cities are, Memphis is a big place with vastly different neighborhoods.

So my question is- are there any tools that our of staters like to use- neighborhoodscout.com for example, is one- to evaluate specific hoods for purposes of basic deal eval? I know my agent will know, but I don't want to pester her for every place i am just pointing and clicking on.

Any more experienced out of state investors have any resources and/or processes to share that they use to evaluate hoods from far away? The abolition of the crime map was just kind of the straw that broke the camels back, leading me to realize that i don't have many great tools for neighborhood eval.

Listmates,

In a brrrr scenario, assume one partner finances everything. Other one gets the deal, and oversees the project and basically does everything, but puts in zero dollars.

Question: what is a fair percentage for the "sweat equity" partner vs the financier?

Is there a general rule or guideline anyone jas here?

Any experience/insights appreciated!

Richard E

Ill add to what the above poster said- my biggest mistake was letting tenants push me around, demand things, ask for special treatment, get discounts, etc.

the #1 thing I have absolutely found is: The people who ask for extra things or special treatment, and especially the ones who ask for discounts- tend to be the worst. they are the ones that complain and ask for money back, and make the implication that they will leave bad reviews otherwise. 

I'd say #1 mistake is, giving in to demands of entitled guests.

(NOTE, this does NOT mean that, when something goes badly, that you shouldn't compensate them, im a firm believer in giving discounts when some sort of lame thing happens (e.g. hot tub craps out and guests cannot use something that they were seriously looking forward to, and things like this- but when they ask in their initial message "would you consider taking less" - absolutely never. Im ok w staying empty rather than having a bad guest)

"Act as if" someone said, about success. Act as if your Bnb is great and that you have something that everyone should be thankful to have, rather than something you are desperate to give away for cheap- and then it'll be true. (or something like that)