All Forum Posts by: Sunil Kurian

@Duarte Marques

Sounds like you're going into your choice with eyes wide open in terms of expectations. You pay more of a premium for reducing risk and the need for your actual labor...but for many of us who are primarily w2 employees, it can be worth it. Barring a macroeconomic generational event... don't expect to get fabulously wealthy off of just one turnkey property, but it does get you in the game. (Think "basehit" vs "homerun")

My main advice if you are choosing turnkey, is to spend time vetting your provider. There are some that are excellent in all phases from selling you a quality property with well done reno to providing great property management after acquisition. Some providers struggle with some or all of these tasks.

Wish you much success.

@Madeleine Musante

You mention BRRR but I think there is alot of additional information needed that would be important in order to provide the best guidance here in terms of market.

- what type of returns are you looking for? Is cash flow more important than appreciation.

- what level of neighborhood would you be willing to take on? (A, B, C?)

- what are your preferences in a property? (SFH vs condo, 1 BR vs 3 BR, sq footage, age, HOAs, etc?)

- Are you willing to self manage the reno and property management or would you need help with those tasks?

-What other externalities might you be personally wary of in a market? (Landlord tenant laws, geographical weather patterns, local economy, crime, etc)

There are hundreds of metropolitan areas in the US and these are just some of the questions where the answers may sway the advice....

One more point I'd add is that regardless of where you invest, familiarize yourself with the "seasoning requirements" around refinancing to pull your money out. If you are on an aggressive timeline to refi and purchase your next property but refi is your only source of investible capital...this could slow you down a bit.

@Emily Schneider

Finding a property: Beyond just MLS, what abilities do you have to identify potentially great investment properties? Do you have geographical expertise in some way?

Investor mind- What do you consider a good deal in your market? What deals in your market should be avoided?

Expertise in negotiation: How fast can you get offers in? How responsive are you in live negotiations? Do you have an example of having negotiated a creative investor friendly deal?

Are you well connected: What does your rolodex of appraisers, property managers, mortgage folks, and inspectors look like? Do you have trusted contractor contacts you could leverage if something comes up?

@Jex Leiva

I used to own and live in Bradenton so here are my two cents...

That general area has alot of competition from multifamily apts, condos, and townhome communities. Your price point puts you in direct competition with them for the same square footage but in many cases they can outdo you with alot of fancy 'bells and whistles' to attract good tenants (pools, gyms, common areas, included utilities). It's also worth noting that it is the holiday time...so you face the challenge of it not being the optimal time of year for a tenant to be moving

As has been mentioned, consider lowering the price point a bit or being creative overall in the deposit/transaction costs to get them in the door.

Last thought - The location of your property is so close to Sarasota beaches, IMG Academy, the SRQ Airport, several golf courses, and 15 minutes to Manatee Memorial Hospital. Have you ever considered a short term or mid-term rental? With a little work, the potential for cash flow could be greater than what you project for a long-term tenant.

@James Kim

I read your post as having 2 real questions:

1) Is there a monthly dollar amount paid to the HOA that would preclude doing a deal?

And 2) Would the existence of an HOA make the home less attractive to buyers?

In answer to #1, I think every deal stands on its own so if the net after all expenses meets your goal...then there is not necessarily a set monthly dollar amount to consider. HOWEVER , I'm not sure that this may be the only question to consider. Another big issue is one of "control". Aside from cost, the reason many investors avoid HOAs is the level of control they exert over your property, and as a result, the control you lose as an investor owner. Most HOAs have the ability to change its dues annually (unaccounted costs). Most HOAs will govern the tenants use of the unit more strictly than you might (I've had many letters from overzealous HOA officers enforcing bylaws and threatening fines). Most HOAs will dictate the type of exterior repairs and maintenance that is allowed (paint colors, lawn ornaments, timing for lawncare). Did I also mention that most HOAs are empowered to require "special assessment fees" for common expenses that you probably havent accounted for in your proforma? (Roofs, landscaping, parking lots). As someone who has lived in HOAs, there was alot I loved about it...but as an investor owner, maybe there is a deal worth doing but do I would only do so with eyes wide open concerning the above risks.

As for what may be more attractive to a potential buyer, it depends on who you'd project selling to. Many investors will have concerns buying your property for all of the reasons above...so it is possible that the potential buyer pool is limited to only owner occupants. That said, I've also known of some master planned communities (especially in Florida) that are seen as extremely desirable by owner occupants expressly because they do seem to have a really well run HOA. Perhaps that demand more than makes up for the lack of owner-investors...

Alot to think through - wish you luck!

@Marcel Bracamontes

@Marcel Bracamontes

In a short time you have made it to the point where you have ~$1300 in profit/month and a total of $135k in equity. Amazing! Sounds like you hit a home run in your first 'at bat' which is enviable. Some investors chase cashflow and others chase appreciation...sounds like you've accomplished both right imout of the gate - congrats.

Heres how i would suggest looking at it. You actually have 2 assets you need to consider. The house is one asset here but the 3% financing itself is another. I've heard of several lenders who offer products that allow you to tap into the equity of your rental WITHOUT messing with the existing mortgage. Be careful in how you do this because the interest rate might be variable...but that would be the move to make without losing either asset. it's worth looking at.

That said, you are in a good spot even if you do nothing. It certainly wouldn't be losing to stay put and patiently save up cash over time for another purchase.

@Sol Naim

As others have noted, this is probably because the zillow algorithm has just done an intake of your purchase price. If we are to assume that your purchase is the most recent in the local area...I'm sure the algorithm is also weighing it more than older comps.

Don't worry though. Zestimate is just a ballpark estimate. Assuming you refi your property after the rehab, a certified appraiser will give you a more exact representation of value. Wishing you luck that it is as high as you hope!

@Wilson Feliciano It might be helpful to talk to a local insurance agent who can advise you regarding the specific flood zone level, recent history, and even give you a potential trial rate quote.

Surprised that I haven't seen turnkey providers here as a suggestion for a newbie who is also rich in capital. There are many good ones with a presence on these forums who can provide you with a ready to go investment property that will cash flow for you on day one. The good providers will spend time to walk you through their different markets, their acquisition model, and the systems/processes associated with their in-house property management teams. Can you make more return on capital doing your own BRRRR? Probably. Will you pay a mark up having not done the whole BRRRR yourself? Most likely. However if you are just starting out, don't want the hassle of figuring it all out yourself, and want to learn from the proven systems of those who do it every day...then it's a solid choice to consider. There is nothing wrong with "hitting a single" your first time at bat...

@Nathan G. Couldn't agree more.

She's had a great long run damaging your property while paying under market rent. You should aim to run your property as a business and, unless your business here is charity, then she needs to accept the new terms or move on.

Showing kindness would mean going beyond your contractually required time to allow her ample time to find a new place. Though not required, it would be totally admirable and something you could do to respect her long relationship with your family.