All Forum Posts by: Sean Hudgins

I am looking for some current operators in Sandbridge to chime in on this one. I have a client who is actively looking in the area for a vacation destination and STR (fellow BP Member). I am also extremely interested in getting into the market there in Sandbridge myself. One thing that I can see in our MLS is rental projections and sometimes live rental numbers for homes that have been rented in 2024. But I'm really more interested to hear from a current owner what they actually see coming back to them. There are a couple of larger management companies out there that have a majority of the market share, and they are usually the ones listing the properties, so who knows how accurate those projections really are?

Another question I would love some data on is what the numbers look like for the condo communities that are out there. Do they perform well? I see a problem with a lot of saturation in that area, and I can imagine that it is very difficult to stand out, and anyone that does operate one of those condos, would you do it again, or would you try to get a house next time? 

My general impression of the area is that you tend to be better off getting the more expensive homes, as they usually house more people and have significantly higher rental projections. Is this what you're seeing out there in the real world? Do you notice a sweet spot both in property size/vicinity to the beach?

Very interested to hear your numbers!!

Congrats Mark,

As Hamp mentioned, getting a management company involved before you deploy is a very smart move. When I was still active, the only time I would consider self-managing was when my tenants were college buddies and shipmates. Get that management company nailed down now, as they should have better marketing strategies so you can take those off your hands, and it allows you and the management company to align and manage expectations from day one. 

If you're going to stick to self-marketing the property, get those photos. You can try sites like militarybyowner.com and the groups you mentioned.

best of luck to you!

Igor,

I have helped several investors purchase properties in Norfolk and the surrounding areas. What kind of properties are you looking for? Hampton Roads, in general, is a great place to invest, specifically for a coastal area. It has been fairly undervalued and is starting to gain some traction and catch up to other coastal areas. Each city has different advantages and disadvantages, so depending on what kind of asset your looking for will likely guide you to which specific area you are going to be looking at.

Alex is in a good position. I would echo what @Jaron Walling said about selling on a step-up basis. 4k a month on $1m in equity is a 4.8% return on equity. He would be safer in a savings account at that rate (I know what you're thinking... appreciation, though). There are way better returns to be had in the market for a similar amount of work.

The only other thought regarding keeping the property is what the condition of the property is and if he could upgrade it and get a significant increase in equity position before he sells. 

He needs to decide what kind of investor he wants to be; if he wants a truly passive investment, then he should probably stick to the stock market. If he wants to put in a little more time and get a little more out, he should consider out-of-state investing, maybe some STR investments.

 Kensington is a great area—very trendy and close to the restaurant district off Colley Ave. The closer you can get to Colley, the better off you are. But for small to medium multi-family homes, it’s hard to beat that area. Park Place is similar but a little less popular, but still a good area. Depending on the deal, I would not shy away from either neighborhood.

It's also a great spot for mid-term rental with the Sentara campus right there. 

I feel like our rents were pretty behind for a while and they are finally catching up to other coastal metros. Thanks for the info!

@Jay An I Love the goals and the position you have put yourself in financially to achieve those goals. That first house hack is going to be huge, and with the VA loan can be done without cutting into that 350k. If I was you, I would be keeping a close eye on the Green Run area of Virginia Beach; it has both single-family and townhomes; I own a townhome there, and it cashflows well though it should since I bought it at the beginning of COVID. I also just sold a townhome in that neighborhood to a military investor from CA. You can cash flow with some properties and a decent chuck of money down, and the properties are right in your ARV range.

ADUs can be tough in this area as our governments have not adopted many of the ADU guidelines that the West Coast has. It can be a great option if you are going to home share (Airbnb) or you build a connected ADU and do more of a rent-by-the-room strategy.

Build out your team as you network, and I would encourage you to try and make one of the first couple of deals something with a moderate rehab; it will teach you a ton about the contractor industry, and the sooner you can find reliable contractors, the further ahead you will be able to get.

Feel free to connect at any time, and hopefully, I will see you at one of the local meetups.

I guess I don't see why a big data company can't create the MLS System; Zillow already pulls the info from all the existing MLS databases, so I find it hard to believe that a statewide system cannot be made because it's too much information. I know I hate that if I am doing transactions a bit north of where I am, there is another MLS, so I have to play a game with those in that MLS to get the info I need.

I'm really curious if this will be the genesis for Zillow or some other company to become a nationwide or, at the very least, statewide MLS. I think the NAR and their MLS system, in general, are garbage. Where I am, we have a private MLS that is not run by the NAR and mind you; it has a fee structure similar to that of a NAR-run MLS. But They don't require you to be a part of the larger organization and spend hundreds of dollars on top of MLS dues for NAR dues (which may not go up in 2024 but you bet they are going up in 2025 to pay off this $400M).

I would love to see a company that can create a state-wide MLS separate from NAR, and I wouldn't be too sad to see NAR go away completely.

@Joe Baier and I would be a little concerned about your projected rents. You are looking at more than doubling the rents that are currently being collected. Now, I know you are looking to rehab, which will help get the higher rents, but I'm not sure I completely agree that you will be able to get those numbers just based on what they are renting for now. I would caution that though HUD may have a market rent price for the City of Norfolk, there is a very drastic difference based on the actual location in the city. Section 8 may be an option as their vouchers are less concerned with specific locations in the city.

Another point I want to bring up is your equity position. Yes, you have equity going in, but you also have $120k in renovation costs; what is your expected ARV and equity position after you spend the $120k, and does that $120k take into account the holding costs to do those renovations?

As others have said, if you're going the SUB2 route, I think you should have some really clear conversations with the seller. I would personally have a backup plan in place if the notes are called or anything goes south with the Mortgage companies.

Feel free to reach out if you want to talk. I would definitely get really solid on your expected rent numbers before you pull the trigger.