All Forum Posts by: Brandon Stevens

Congrats buddy looks great. 

8 month later, Tyler how has it all worked out?

Ok lets simplify the question to, they just want to retire in 5 years, I'm pretty sure they have access to more than 300k, so lets say 500k, and they want to own a couple nightly rentals that they can also stay in in the off season...what your plan using any method. 

This was just a question they posed to me because we now live off our rentals. My response was, as stated above, i assume vacation rentals are a success if they break even, but they like the idea of having a couple they can visit. 

What might be a realistic strategy to get them there or close to there. Maybe it takes 10 years maybe it takes more capital.....

Thanks for your replies thus far, I believe they would certainly be open to financing. I did not mean to imply they would only use the 300k to do cash purchases. 

I also believe they would live in their home midwest city for 6 of the months, and would be open to having more than the 3 properties. Just trying to see if there is a way through just vacation rental where they could travel and supply a certain yearly income. 

For people in this space, or in RE investing in general..how would you answer this question...

A couple wants to retire in 5 years, they would like to use short term rentals to supply them with 60-80k a year to live on. They have 300k they can begin investing with.....can they get there? 

They would be happy to live in the rentals in the off season if needed to facilitate the plan and Ideally would like to own a lake house, house by the ocean (in town), and a home in their midwest city. 

If not, would bringing another couple in with a similar nest egg be able to make it happen or would simply more money upfront be needed?

What are your thoughts, I didn't have an answer for them other than well most vacation rentals I think are considered a success if they just pay for themselves..... :) but maybe there is a strategy out there...

 Thx for your input Andrew. Funny you bring up the roofs. Most of my former life was spent as an insurance adjuster and the lead to the first investor came from a former colleague working in the area after a hail storm. Long stpry short, the owner is anout to get new roofs on all 9 buildings...at least a150k cap improvement based on my ballpark measurements. 

A walked the property again today and noticed a small coin laundry area, some additional deferred maintenance and evidence that a lot of the tenants appear to be long term. The units have little outdoor areas in which the tenants are apparently able to decorate how they wish, lets just say its easy to see who has been there a while and that most of the the tenants are older.

The owner also pays the water so im hoping between that, the low rent, and deferred maintenance that there is some real value add opportunity depending on what he thinks its worth. 

I hope to be gettimg some better financials this weekend. Ill let ya know. 

Because this is always everyone's favorite game on here :)

I came across a lead yesterday while looking at another property in the area (about 40 miles south of Louisville, KY)

I went to take a look at the property and I liked it, for the right price of course. 

I spoke with the owner who lives in Florida and the only information I could get out of him at this point was the following:

56 units

Built: 1988

Combination of studio, 1 bed, and 2 bed

All 1 story units.

The property was in good condition, recently painted, no major deferred maintenance I could see although I could see spending 50k to address some minor issues. 

%100 Occupancy (Skeptical I know, but a prior dead listing from 5 years ago did say they had a waiting list and inspection of the property led me to believe it was at least pretty close to that)

Monthly rental income: $24,000 ($428/unit), Annual rental income ($288,000)

I'd have to look into the exact market a little closer but I think rents could be raised at a minimum of $25/unit/month.

The prior listing also stated it had an 8% cap (again 5 years ago)

Owner said his mortgage was $8,000/month (96k annually)(Not sure if this includes taxes or insurance)

Tax rate 1.1/thousand

The owner stated he makes 56k a year off of the property after he pays everything including his mortgage. 

Thats all I got, but he asked that I call him back to talk more about it. 

Given the provided information, what is a ballpark you think this property would be worth??

Thanks for your time in advance. 

If you cant find it in Etown ya definitely wont find it in lexington :)

But like @jimwilcox said depends on your long term goals. If you are risk adverse a heloc would probably be the safest. Try to get 30-50k out to play with and id look for eirher single or mutli family value add propositions in which you could get your money in to either flip or refi after 6-12 months to get your $ back out. Id probably stick to etown or one of the closer surrounding cities to minimize your competition. Set a goal buy two a year, something like that. 1st call id make would be to your banker tell him what your plan is than talk about how ya get there. Gl

That is a good idea, one of our complexes is mostly graduate students, they are the best best when it comes to college rentals. More mature, less damage to the property, and they stay longer. This allows you to get the best of both worlds, high college rents and more mature longer tenants. I would definitely work to stay in that space if you can make the numbers work. Certainly sounds like it might  work, especially if ya ca get in it with only a little $, you can always work to pay it down ad refi 5-10 down the road to up your monthly cash flow. We of course just always hate that that $350+ never goes away. I usually just pay it up front each year at ours so i don't have to feel bad about paying it every month :) But if you push some of that off onto tenants for utilities that will help. 

DM me who your using for your refi after 6 months if you dont care. 

I own a number of condos in town including a number around campus. i'd say you are right on the edge of whether it makes sense or not from an appreciation play. Certainly will not be a cash flow play but thats the norm around campus. I would be trying to pass at least $150 of the HOA back off onto the tenant for utilities...because your so close to whether it makes sense or not I would double check all of your figures, in condo communities landlords will be quick to undercut each other especially when it gets close to the school year and your not going to get most college kids to pay much extra for your unit being nicer than anyone elses in the complex.

What about summer months? With so many new apartment complexes offering 9 month leases its not as easy to get year leases anymore, so now you have to account for 3 months of HOA and 3 Months of mortgages at a minimum each year into your figures, then what if you can only get 1k a month instead of 1200, that $2,400 less a year. This doesnt even account for a possible assessment from the association which is expected at some point.....You see how there could be a 5-7k swing on any given year.......Im all about getting into any property with very little of my own $ but I'd run and rerun your numbers on this one very closely before pulling the trigger.