All Forum Posts by: Scott Hibbert

In November 2020 I invested in a syndication deal called Woodmere Reserve with Lucas Miller.  It is a 200 unit apartment building in Montgomery, Alabama.  I am curious if anyone else on this forum invested in it as well?

I am becoming concerned that it is a scam as I have not received a single distribution and they have stopped sending monthly updates since June 1st 2023.  They were supposedly under contract to sell the property but the buyer fell through in June 2023.  

I still have not received my K-1 for 2022.  Last year they sent K-1s in June.

Any advice on next steps is welcomed.

Thanks

@Melissa Richard I haven't had any issues and neither has my old landlord/roommate when I rented a room before buying my current house.  I've wondered if there have been fewer people looking for rooms for rent because of Covid but I don't have any proof of that. 

I bought my house last February and all of my roommates have moved in during Covid.  One of my roommates is a nurse and works in a hospital but didn't work on Covid patients.  I had Covid in February of 2021 and isolated myself to my bedroom, bathroom and office that are all conveniently located in the basement.  None of my roommates cared that I had Covid.  I basically had a mild cold.  If a roommate tried to sue for getting sick, good luck winning that one in court.  Also, these are people that are renting a room in a house, they clearly don't have money to hire a lawyer for such an unreasonable reason.  However I do recognize that it is possible and the sue happy legal system here is crazy but it's a risk I am willing to take.  All roommate scenarios can turn sour no matter how living together started.  The higher cost of separate dwellings is generally why people have roommates in the first place.  They can't afford to live by themselves.  I would live by myself if I wanted to waste $30,000 a year on housing but I would rather have roommates and invest or enjoy that money on more important things in my life.

@Everest Harkey I post my listings on craigslist and Facebook Marketplace.  I give a detailed description of the house, the amenities, some background on the current housemates and what we are looking for in an ideal roommate.  I ask for a detailed response to questions like tell me about yourself, and any social media links they care to share.  When someone responds with "Is this available?"  It shows me they are lazy and didn't care to take the time to read my post.  The tenants/roommates I have selected have generally responded with a well thought out message about themselves and anything related to the post.  Then I have a phone call with them to get to know them a little better, ask them questions about their lifestyle and employment.  If that goes well then they come and see the place in person and we sit down and talk some more if they are still interested in the room.  At this point you can tell if you click and get along or not.

An easy default to ask yourself is "would I want to go get a beer with this person". If the answer is yes then you have probably found a personality fit.  I still run full background and credit checks to make sure they check out.  Calling references is also a good idea.  That could be a past landlord or roommate.

@Tanner Pile Tell them that rent is priced based on comparable rents in the area.

It has nothing to do with how much your mortgage is. Maybe you put 5% down and have PMI. Maybe you bought it cash and don't have a monthly housing payment. Either way rent price is a matter of supply and demand.

I’m currently house hacking in Arvada and live for a profit of $200/month in my own house. But when the rented master bedroom bathtub leaked through the ceiling, I paid to fix it.

My roommates know I’m the owner from the very beginning and we get along great. If anything breaks I pay to fix it right away unless it was human carelessness.

Good luck with your house hack! I prefer to find the right roommates/tenants and will wait for the right fit. I currently have a vacant room for June because the new roommate couldn’t move in until July but he was the right fit for the house personality fit. It cost me $800 in one month of vacancy but way better than having a bad roommate.

I bought my half of the duplex in Arvada a year ago.  Recently my neighbor mentioned he might move and asked me if I'm interested in buying his side.  Both are pretty much identical.  I bought my half with 5% down primary residence and rent the extra bedrooms.  I am now considering buying his half with another 5% down primary residence purchase and moving into his side.  My lender says the underwriter will most likely question why I am buying the other side as a primary and might ask me to put down 20% as it appears to be an investment.  I am curious if anyone else has heard of this or has any experience with primary residence purchases where the underwriter questioned the motives?

Thoughts?

@Derek Hutson I have one on my house in Boulder. It works great. It is a Phoenix Aerocool pro series. I have also lived in a house that had an older swamp cooler. It worked but on the really hot days, it just couldn’t keep the house very cool. There are multiple variables that could cause this but don’t expect it to work as well as central AC.

There is a bit of maintenance you need to perform to keep it operating at its best but it is all very simple.

I would buy another house with one.

@Chris Lopez @Craig Curelop I’m curious what you are seeing in the non-investor primary home purchases? Are you seeing the same traffic of those buyers or are they holding off? Maybe they are worried about layoffs or hoping for cheaper prices in the summer or fall?

Do you think that anyone will learn a lesson of living beyond their means or paycheck to paycheck will register once they feel the impact of whatever the result will be of this pandemic?

I work in corporate America and have co-workers in their early 30's that are paycheck to paycheck because of their lifestyle choices.  They rent a nice apartment, have a car loan on a nice vehicle, maybe student loans and at best a small amount of money in a savings account that never grows.

One of these co-workers has texted me asking if I think we will see layoffs.  I told her to plan on layoffs this summer after we have reported the next two quarters to Wall st.  My approach is plan for the worst and hope for the best.

Is this the wake up call for most of America that living a consumerist lifestyle is not sustainable and that they need to serious change the way they manage money (or lack their of).

They don't use budgets, they think promotions and raises is the answer to finally have a little extra money. 

Or whenever this whole thing is over and people return to work, will they return to their old ways of going out and spending every dollar to keep up with their fake instagram world?

I received an email from Ally Bank today since I use them for my savings account.

They wrote

"suspended fees at Ally Bank.  For the next 120 days, we're waiving fees for overdraft, excessive transactions for savings and money marketing accounts"

"Deferred payments for Ally Auto financing.  You can defer your payment for up to 120 days.  During this time finance charged will accrue, but you won't be charged any late fees"

"Deferred Ally Home payments.  if you're facing financial hardship due to an interruption in your income, we can defer your Ally Home payments for up to 120 days. During this time finance charged will accrue, but you won't be charged any late fees"

I realize this doesn't cover investors who aren't facing hardship but it's a step in the right direction if millions of people might get deferred rent.  The snowball has to keep rolling to the next group to keep it all from collapsing.  But who knows.

@Amanda Young I like the idea of multi-family but have found it harder than it sounds in books and podcasts.  I lost out to a number of bidding wars in Oakland, CA over the last 2 years before relocating back to Denver with my employer.  I like to watch how properties sell in the Denver area by favoriting them on the Redfin app.  While doing this I would say that most single family properties sell around list price with some landing below and some a little above.  When I see a good multi-family, it usually goes under contract within 3 days and sells for more over list.  For example a side by side duplex(each 2/2) where the garages shared a wall was listed at $450k and sold at $520k.  Recently a fourplex was listed at $650k and is under contract in 2 days I believe.  I will be alerted when it's status changes to sold but I am guessing it will be a good amount above $650k.  I spent 3 years trying to buy a multi-family with the ideal set up of living in one unit alone while collecting rent from the other units.  Next week I am closing on a 4bed/4bath house and will rent out rooms.

As for short term rentals.  I used to Airbnb rooms in my house in Boulder.  While I had some really good months in the summer, the winter was pretty bad for bookings.  Income swings of thousands of dollars.  The part I hated the most about it was that it becomes a 24/7 on call second job in customer service when the toilet paper runs out, they don't read the instructions to use the front door keypad, the house isn't what they thought it was going to be, etc.  I felt like I always had to check my phone for notifications to chase another 5 star review.  I also travel a good amount for my job.  I assume it is easier to manage for someone who doesn't travel or hires out the cleaning and communications.  On the positive side: Airbnb felt like a great way to dip my toe in and if I didn't like it, I could turn off my rental and honor any bookings I had.  I'm happy I did it and used it as a learning experience before converting to long term rental which has been good consistent income 12 months of the year with great tenants.

I agree with @Chris Lopez and find something that is a base hit, get in the game, make mistakes and learn from them.

Best of luck!