All Forum Posts by: Jacob St. Martin

Hello Mitch, 

Congrats on your success! I would recommend looking at the return on equity in the different scenarios. Return on equity is basically taking the return on investment formula and replacing the denominator with your current equity rather than the money invested. This will show you if your money is working as hard for you as you want it to be! Then you can look at the ways to access that equity and deploy it into other deals and look at your new ROE in each scenario. It is hard to give more specific advice than that because the right answer depends on the numbers and what purchase opportunities you have. 

Feel free to reach out if you have any questions! 

Okay, I have some thoughts that somewhat depend on what your goals are but this is probably how I would structure it: 

There is two road blocks that I am running into when I am thinking about everything that you want to do: First, there are loan products for everything that you want to do but they are always going to want to be in first position. If you got a loan to purchase and rehab you couldn't then go get a building loan on that same property because there is already another loan on it. Second, lenders normally don't want to do one loan for two parcels because if you go and sell off one of them there is now less collateral against the loan. If they are willing to work with you on that then ignore this part but I would just double check that they know it is two parcels. 

I think the best thing that I can think of (assuming they don't care about you having one loan on two parcels) is to purchase, rehab all the units at the same time, immediately sell off the SFH to hopefully pay off a good chunk of the loan (which is possible because it is on its own parcel) and then rent out the duplexes paying down the loan as quickly as possible, which you could accelerate by feeding in capital from an investor or another source. Once you have that paid off, you can go get a construction loan. They normally will go up to 70-75% loan to cost but can you the land/other buildings on the land as the collateral as long as the value of those is more than 25% of what you are borrowing. Then you can build those and do whatever you want with them.

There may be a better way and I would definitely look into building loan programs in your area and not take my word for it because this is what I recall from my most recent conversation with new construction lenders and I am not 100% confident. Hope this helps! It isn't a super neat solution but it is really hard to build without a good amount of liquid capital. Feel free to reach out with any other questions

What current loan structure do you have on the property? That will likely limit your options somewhat but I would be glad to think through it and help out once you provide more detail

Hello Hunter, 

Congrats on your success as a sales executive and wanting to get involved in real estate investing! I don't necessarily have content recommendations. However, my biggest piece of advice for people with situations like yours is to house hack. House hacking might require a little more creativity in NYC than other places but the fundamentals are still the same. Almost always it will be the highest ROI thing that you can do with your money. My first deal was a house hack and when you combine rent savings, appreciation, loan paydown, tax savings, and in this case even cash flow, my internal rate of return (sorta like ROI but more detailed) was almost 300% annually. Not every deal is that good, I definitely got lucky on my first one, but still house hacks almost always will give better returns than other options.

Feel free to reach out if you have any questions or want to learn more about house hacking!

Hello Italy, 

Unfortunately there will always be risk when doing short term rentals, and things will inevitably get ruined or broken at some point. Expect that and plan for it! Airbnb does have an insurance policy in case a guest does trash a house but I will note that they are very much partial to guests and will normally not side with the host in a dispute unless you have really good evidence. There are a few things that you can do to help protect your listing, this is not exactly an exhaustive list but just a few things: 

- You can install a ring doorbell so that you have video evidence of who is coming in and out of the house. If the guests throw a party against your rules you will be able to show a bunch of people entering the house who weren't supposed to be there. 

- You can require that guests have uploaded proof of ID to airbnb in your settings. This prevents people from making a new account to throw a party, trash a house, get a bad review from the host, then just make a new account so that it doesn't matter. 

- You can require a refundable deposit/place a hold on their card just in case. I don't do this and I wouldn't necessarily recommend it but you can. 

- Have a smart lock. It is really helpful to have a log of when guests were going in and out of the house. This has helped me with airbnb disputes before

- Tell your cleaners to let you know if anything is broken or trashed and to take thorough pictures before touching anything. 

- I believe the other OTAs also have host insurance but not as robust as airbnb. 

- Send a message during the guest's stay checking in and ask how their stay is going. This gives them a chance to tell you if anything is wrong with the unit and if they do not reply or say that everything is going well, it will help you if they break stuff and/or try to get a refund later. 

- Honestly, I haven't had that much issue with people breaking things, I have had more people trying to fraudulently get a refund though. 

- Set aside a % of each host payout you get for future repairs replacing furnishings, expect it to happen, and then you will be prepared when it does. 

Feel free to reach out if you have more questions!

Hello Ethan,

I am an investor/agent in Charlottesville VA and I can confirm that college towns can be amazing! There are of course upsides and downsides to every market but I tend to find that college towns usually have solid fundamentals, companies moving to the area, population growth, etc. If you are renting to students you need to just expect them to be rougher on the house but anything close to the university in Charlottesville is usually leased up about 10 months in advance. Also in college towns there is often a segmentation of areas that are "college" and areas that are more for locals. Understanding those unofficial boundaries will help you identify who your most likely tenant base will be and cater to them.

If you have any specific questions I would be glad to answer!

Hey Jared, 

Welcome to BP! I am a STR investor and realtor in central VA and serve that area. I'd love to connect some time and help you through any questions you might have about STRs or the area!

I would personally recommend going with the full central air system. In a house of that price range people will view the minisplits as cheap even if it is just as effective. Also for only 10k more I think that central air does do a better job

Hello Darnica, 

So sorry to hear that this has been your experience with agents in central VA. Honestly, it was mine too. I have been an investor for several years before more recently becoming an agent. Most agents are not good investor agents. As an investor myself I know what you are looking for for, and I understand the numbers & principals. For my investor clients, part of my buyer representation meeting is getting to know your buy box and specifically how you analyze deals, price out rehabs, etc. Then I search through the market to target deals that could work, pre-vet them by doing some quick underwriting before I send them to you, and send them your way.

An example from a recent investor client of mine: 1/4 signed buyer rep contract, 1/11 sent them a list of 9 pre-vetted potential deals, 1/18 we toured 6 of them, 1/21 I went and toured one where the tenant would not let us in on 1/18 and took detailed pictures and videos, 1/22 under contract on that property for 57% of list price, set to close on 2/14. 

If that sounds interesting to you I would love to talk and see if I can help find you your next investment property!

 Use pricelabs, I also integrate with guesty for hosts which allows me to manage listings on airbnb vrbo and booking.com. Maybe you can also look into adding some fun amenities like a hot tub as well!