All Forum Posts by: Tandi H.

@Kathy Hansen - wow, sounds like they loved your place, congrats!

@Paul Sandhu - looks like a dude den, for sure!  : )  I see something about "House Rules" on the fireplace, might I ask what that says?

@Kathy Hansen - Thanks, that's what I was thinking too.  Have you ever had personal items lost, stolen or broken?

Hi all-

We have a AirBnB guesthouse that is doing well on our property.  It's small and affordable, so we get mainly single travelers, which has been nice and quiet.  We've enjoyed meeting new people and it's a pretty quick job to clean and turnover.

We are now considering renting out the main house, our home, during a big event (Balloon Fiesta) that happens annually here in Abq.  It is a 10-day event.  We have not rented out our home before.

Questions that are coming up for us:

1. Should we list the booking on AirBnB as a full 10-day event rental?  Doing that would narrow down the possible renters, but it would also remove the need to completely clean and turnover the house partway through.  Or should we list it that way now, and we can always change it later if it doesn't book?
2. How much personal stuff should we remove from the house?  Do we need to empty the closets, or just part of the closet?  Do personal photos need to be taken off of walls?  
3. Is a STR lease recommended by others who have been in our situation? Or what kind of protections have you put in place? How do you vet guests beforehand?
4. How far in advance do people usually book for these type of big events?  How soon do I need to have the listing ready...still working on getting great photos of each room, and we are still doing some redecorating.

Thanks!  

Within three blocks of my home.  Great to be able to walk the dog and check properties at the same time!  Plus its easy to quickly respond to any tenant issues.  And they know I'm nearby, which is reassuring for them, as well as letting them know I'm keeping an eye on things.

I'd appreciate advice in how to structure this specific kind of deal:

- Current owner is a neighbor/friend, who is 75 and wanting to get out of two duplexes in the near future (4-12 months).  My husband has done handyman work for her and says the properties are in decent but not upgraded condition.  She's owned them for 25 years and they are her retirement asset.  1950's construction.

- The two properties are next-door to each other.  Each duplex unit is a 2/1.  So total four units of 2/1.

- Properties are a couple blocks away from our house. We own our home, a SFH, and a duplex, all in the neighborhood.

- They were appraised at $260k each about a year ago. She said she could be flexible on price though for the right people.

- She says they are cash flowing (three units, as she occupies one) about $24k a year.  A 2/1 in a duplex in our neighborhood could rent for $900-1200/mo depending on size, condition, yard, etc.  

- Owner lives in one unit, and would like to stay in it till her death - when that happens is of course a big question mark.

- She's had a lot of people after her to sell them, but she likes us a lot. She wants to sell them to people who she likes and who will keep up the properties.

- She wants to enjoy things now as who knows how much time she has left.

- She's going to spend the next few months selling a bunch of stuff stored in the garages before she considers selling the properties. So the timeline to start the deal is a few months off at least.

Questions: 

1. I was recently laid off, so I'm not sure what kind of loan we could get.  Maybe if we did a large enough down payment we could still get a loan, based on my husbands income (which fluctuates) and our other rental income?  Or based on the income of the properties themselves?
2. How would you structure an owner financed deal for this situation? Currently I think we could do a down payment of 100-150k (upper end would be a stretch). Another idea is we could potentially sell our SFH house, which might net about 80-90k. I think she would take a partial cash offer, if we could pay off the rest in a short amount of time. I don't know, maybe if we could pay it off in 5 years?
3. How does her indefinite occupancy play into the deal?  

I would like to give her several options to work with.  

@Llewelyn A.

@Ben Leybovich

@Brent Coombs

Wow Llewelyn, thanks!  I will get the book you recommended, and start my research.  

Thanks for all the inputs.  I have an inkling now of how the "what's the cash flow" perspective may not be effective in evaluating properties.  Excited to delve into this area.

@ Llewelyn A. -

You posted this on another thread:

"Mike, Jay, like both of you, I buy based on Internal Rate of Return (IRR) Analysis, not on calculations that only tell you what the current year return gives you.

I met a few BP members recently and showed them how large the Returns are and it's quite shocking. Those investing in Cash Flow ONLY calculations versus the overall return such as IRR don't realize how much money they are leaving on the table.

I don't blame them because it's just so easy to do those other simple calculations such as CoCR and to think that's the only thing you really need to know.

The problem is that you don't know what you don't know until you learn something sophisticated and then you realize that the stuff you learned before just wasn't good enough to achieve MASSIVE returns.

I think the best kept secret is these more sophisticated calculations such as IRR.

The problem is even if I let the secret out of the bag, there will probably be 90% of Investors that will say it's too difficult to understand. And I agree! It really is difficult because it requires a mental and business shift of paradigm.

But like everything, if you put in quality work, you can get quality rewards."

Can you go into more depth about IRR?

I found this article to be helpful in understanding IRR: https://www.crowdstreet.com/what-internal-rate-ret...

Am I on the right track?  I guess I'm not seeing what is so magical about this formula yet...or why it "requires a business shift of paradigm"?

Thanks

Taos Mesa brewery (in Taos, NM) recently opened up an "vintage trailer hotel" right next to their brewery - what a fun and unique concept!

https://hotellunamystica.com

I'll be staying in "Thelma" soon... : )

@Will F.  You don't hear much about it because the economy of ABQ is static.  The military and government jobs provide stability, the lack of large industries or major resources avoids boom/bust cycles, population growth is slow, but not decreasing.  Not a ton of change or dynamics here.  Just a slow upward trend.  I wouldn't expect much RE appreciation in ABQ, unless something big changes.  It's a poor state, with education and crime issues.  It has a low population and is mainly rural.  ABQ is physically isolated by at least 6-8 hours driving from any other large metro area (Denver, Phoenix are closest).  NM is also culturally different than other US states.  The general mindset is rather provincial - small frame of reference, behind the trends, and traditional.  That's part of what makes NM unique, even "quaint" to folks from other parts of the USA.  

If I'm sounding negative, here are some positive aspects:  the climate is great, access to outdoors/sports is excellent, and the city isn't sprawling.  It's easy to get anywhere in the city in 20 min or less, traffic is relatively light, the international airport is good.  The pace of life is much less hyper than most big cities.  Lots of local food, unique and authentic local culture, and low cost of living.  No extreme heat, no hurricanes, no tornados, no earthquakes, no floods.  I'm thinking that retirees, daunted by the heat, sprawl, and costs of AZ, will start to see ABQ as a better alternative.  

@Anna Mayer - yes, I think you would be able to get a nicely furnished place rented by mid-term tenants like you mentioned.  The main thing would be choosing the right part of town.  For less than $200k it could be tricky to find a desirable neighborhood.

Many people feel the UNM/Nob Hill area is the "coolest" area - it has a walkable, historic business district with lots of great restaurants, breweries, bars, coffee shops.  It's also walking distance to UNM and UNMH.  I know of several AirBnBs that rent to movie people longer term in the neighborhood.  It's also close to Kirtland Airforce base.  

If you are looking at the UNM/Nob Hill area, definitely don't go east of San Mateo, that's the war zone.  Maybe not even east of Washington.  South it depends, I prefer not going much past Garfield but that's flexible.  North you can pretty much find nice areas up to I-40.  West you are bordered by UNM and downtown.  The area directly south of UNM is the student rental ghetto (not well maintained properties).

The Uptown area (Coronado mall) is another area that seems to be popular and has amenities (mall, restaurants, Trader Joes, etc).  It's cheaper than Nob Hill.  Everywhere more north and east of Uptown is pretty much your "anywhere" suburban sprawl.  The foothills on the mountain side of Tramway is a higher end area and has good access to hiking and biking trails.  Feel free to PM me with anything you'd like a local opinion on!

@Will F. - Abq is slowly growing, and a lot of growth is happening in the west side (Coors area).  I don't go over there often but that is the only direction the city can really grow.  I have the sense that most of the new construction on the west side is relatively low quality - i.e. looks like typical suburbia and doesn't last all that long.  Housing prices are cheaper over there so many people are taking advantage of that to get their first home.  I think it depends which end of Coors your property is on - the farther south, the rougher the neighborhoods.  Farther north has older developments and nicer homes.