All Forum Posts by: Rafael Norat

Hey BP Community.

I have a property currently under contract with 10 day inspection period. We are using an FHA 203K loan. Does anyone know if the ARV appraisal results are usually available within the inspection period?

My concern is that the ARV appraisal comes in lower than expected AFTER the inspection period and we don't have an out close at that point. The property isn't worth the investment without the rehab loan.

Thanks.

Rafael

@Jason DeMauro

Hey Jason and great planning! If you have a financial advisor on your team, game plan with him or her and see if there is a semi-liquid vehicle these funds can be placed in. Obviously you don't want to be caught with a need where you can't pull these funds at that time. However, its probably best to have these funds set aside your 1st year untouched though to at least have that time to gauge how your properties are actually performing. If after that 1st year you see a surplus in Capex and Vac buckets, then maybe pivot and seek that vehicle. Its similar to when lender escrows your tax an insurance funds and then adjust quarterly or yearly based on the actual needs. Hope that help! Reach out any questions. Can you recommend you a good financial advisor that I work with.

@Kyle Mack

Hey Kyle and congrats for getting started! Sounds like either way you can't lose.

It all depends on what your goals are and how you buy. Do you want to raise $100k capital in 2 years or $1000/month passive income? I think if you define your goals first it will help you better define your path.

@James Casey

I think keeping the lockers inside and working towards getting the drivers to actually do their job correctly would be the better move. Outside may create greater theft issues, no? Do you have cameras inside? Maybe send a video snapshot of the drivers leaving packages incorrectly and reinforce that you will be seeking reimbursement for any theft?

@James Casey Sign of the times James! I imagine there's isn't a set requirement written for the delivery drivers to actually place in the lockers. Would they need combinations? I'm sure you've already expressed your concern to the delivery companies about package theft and the need to place the packages in the lockers. Other than that, not sure what else you can do. We have several STR units at apartment complexes with similar drop-off issues but rarely does anyone's package get lost. I would escalate the matter and report the package theft to them. I'm sure eventually they would instruct there drivers to process accordingly. Especially if they feel there's a liability concern which they may be responsible if they neglect the drop-off instructions. Hope that helps!

@Alicia Marks

Hey Alicia! What I always understood when getting started at any venture is to not wait till you have 100% of the answers to actually take that 1st step. "Go as far as you can see, then you'll see more from there than you could see before. As they say,  avoiding paralysis by analysis. And then having people around you seeking the same, "water seeks its own level". And finally, adding value to someone with more knowledge to help your journey as well.

But the biggest thing I overlooked and would tell myself is to have good checklists with everything I do to make sure that whatever I do would has a good structure. Yes, it doesn't sound sexy! But it would have avoided old pipes cracking in units because I didn't just change out the plumbing upfront and paid for it in the end. Contractors skipping out because I didn't vet them well. Tenants with 6 dogs in the house because I didn't do quarterly inspections... And so forth..

So, I would tell myself.. Create a checklist with every major part of my process so its repeatable and sustainable. 

The Checklist Manifesto by Atul Gawamde. Great book!

Love this question!

I don't think you should avoid becoming friends with a tenant, but a business line of conduct needs to be well established and never bent for specific cases. If you find yourself doing so, then you're either treating your business as a hobby or you're rules and regulations needs to be better defined. Otherwise, you open yourself up for too many issues.

I've never given my personal number to any tenants, nor do I ever tell them that I am the owner. I am a very empathic person, and will always listen first to understand the tenants viewpoint. I can tell you I've heard it all!!!! But ANYTIME I've had issues, its been because I haven't followed my system or something was not well defined. Not because I knew the tenant well.

@Nick Premer

Hey Nick! Your local municipality (zoning department) will be able to give you the short term rental guidance. Reach out to me. When own and manage Air BNBs. Dallas is a great market of course.

@Vince Liu

Hey Vince! Unfortunately in the current marketplace overbidding is a regularity. If your offer made sense when you put it in, don't worry too much about trying to create something that may not be in there. Just fill up your deal pipeline and stick to your criteria. Keep an eye on the cap rates as well. Most areas are 2-3 cap less than what they are historically. Someone sent me a Houston 200+ unit deal at 3.5%.... 3.5%!!!!! That's historically at least 6 cap+ area I would imagine. Seems like this 6 unit deal may be in the same boat. If the 6-unit doesn't appraise for $1M, the buyer will have to make a decision on how to proceed. Seems as if you already have a backup offer in, no? If so, just let it pay out and then adjust your offer accordingly if they come back to you.

@Bryce Clark

Hey Bryce and congrats! That's a good problem to have. Investing it all in one focus area (STRs,...) may not be the best play depending on your overall goals. There's a lot of flux in regulation changes near and long term to flush out. Have a investor associate converting larger scale motels into affordable housing with number in your ballpark. Then of course syndications are out there which may will yield returns but limit your control and involvement as apposed to other ventures. Regardless, I would definitely look at diversifying within your current restrictions.