All Forum Posts by: Shawn McDonnell

Quote from @Vincent Sottile:

Visiting Delaware, will be in the Dover Air Force Base area. Interested in possibly purchasing a first home that could potentially become a rental later on. Any suggestions on nice areas to look? Thank you! 

I would recommend the Milford area. Reasonable prices, strong rental market, low property taxes, vibrant downtown. Would be happy to discuss with you.

Hi Devon, it sounds like you are zoned AR-1 which would not allow for three dwellings(main house and duplex) but it does allow for a garage apartment(up to 800 sq ft) with administrative approval. See code: https://ecode360.com/8883922

One way around this is to apply for a minor subdivision. If you have access to central sewer, you could do 1/2 acre lots. If you don’t have access to central sewer, then you could do 3/4 acre lots. I am going through this right now with a client. We are subdividing his 4 acre parcel into 4 separate parcels.

@Lynne Burke you’re welcome!

Quote from @Lynne Burke:

Hi all! 

I'm looking for a local STR photographer for my new property in Rehoboth Beach, DE. I'm looking for someone with experience doing photography for STR vs selling. I have a few recommendations, but some of them come with caveats on how I can use the photography and I'd rather not have that hassle.

Hi Lynne, we use Michael Rhue, 302-245-1806,for our photos, both listings and STR(see link below). Our STR has been featured in numerous publications/travel blogs with these photos. You can use his photos however you like. Let me know if you need anything else. Good luck!

https://abnb.me/B8tYVW8wJpb

Jeff, I specialize in second home/investment properties here at the beach. If you would like to chat about how I can help, I would be glad to set up Zoom meeting. 

Investment Info:

Single-family residence other investment.

Purchase price: $140,000

Bank owned single family home, 4 bedroom, 1.5 bathrooms in rough condition. Cosmetic renovation on the home. Made half bathroom into a full bathroom and turned one of the bedrooms into a laundry room/utility room making the house a 3 bedroom, 2 bathroom. Having 2 full bathrooms and a dedicated laundry room made it a more desirable rental. We also made it pet friendly which allowed us to get a higher rent.

What made you interested in investing in this type of deal?

House was only 20 years old, simple rancher, on a great lot in an up and coming town. Was in bad shape but it was almost all cosmetic so we could renovate it pretty easily and not have to spend a lot of money.

How did you find this deal and how did you negotiate it?

MLS. Cash offer, quick close, no contingencies.

How did you finance this deal?

Private money lender.

How did you add value to the deal?

Renovated home. Converted half bath to full bath.

What was the outcome?

After renovation, we refinanced into a 15yr fixed loan. Put a long term tenant in place. Cash flow is $200/month

Lessons learned? Challenges?

We slightly underestimated the renovation cost. We still were able to pull all of our money back out but barely.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Pete Green with Atlantic Bay Mortgage did our refi and he is excellent.

Investment Info:

Single-family residence buy & hold investment in Milton.

Purchase price: $181,000
Cash invested: $25,000

2 bedroom, 1 bathroom cottage on sub dividable lot. Renovated home, added a master suite in the attic making it a 3 bedroom, 2 bathroom. Refinanced into 30year fixed. Put long term tenant in house. Cash flow is $300/month. Sub divided the lot into two lots. Going to build a house on the new lot to have another rental property.

What made you interested in investing in this type of deal?

House had great potential as a rental, lot could be sub divided creating an opportunity to build another home. Town it's located in is set to experience significant appreciation growth in the next 5-10 years.

How did you find this deal and how did you negotiate it?

MLS. Used an escalation clause and waived all contingencies.

How did you finance this deal?

Conventional loan.

How did you add value to the deal?

Renovated house. Added bedroom and bathroom.

What was the outcome?

Excellent cash flow and long term rental with low cap ex. Opportunity for second rental on partitioned lot.

Lessons learned? Challenges?

House was built in 1952 so there were some issues with electrical and plumbing which cost us some money but we were prepared for that having a lot of experience with older homes. COVID also hit right after we settled so we ended up doing some of the project ourselves since we had the time.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Pete Green with Atlantic Bay Mortgage is the best mortgage broker here at the beach.

My wife and I own a STR in Rehoboth Beach, Delaware and have many friends/clients who do as well. So far, we haven't seen many cancellations between Memorial Day and Labor Day. As long as they loosen the travel restrictions prior to the Memorial Day I don't expect much to change. That said, our rental is a single family home which I think is better protected since renter's can stay at the home and not have to be around anyone unless they want to. I could see there being more of an affect on hotels and condos where there is a larger concentration of people.

@Katrina Gillrup I think it's crucial to have a relationship with a contractor before you go under contract on a property. And always have the work done by a contractor as opposed to DIY.  As mentioned, your time is better spent finding more deals. Every hour you spend on rehabbing could be spent finding and analyzing the next deals.  Also, It will take you more time to do the work than a professional. I think this gets over looked a lot of the time when people are considering doing the work themselves as opposed to hiring a contractor. They have more manpower(bodies) and are doing it every day so they are gonna be able to work faster. This saves time on the project which allows you to move on to the next one sooner. Doing the work yourself will hold you back and keep you from reaching your potential. 

The best way to find a great contractor is to find a great local Realtor. A great Realtor has spent years cultivating relationships with contractors and will be more than happy to share them with you.