All Forum Posts by: Joey Banasihan

Hey @Josh Anderson - good questions, I think it just comes down to your long term goals. STRs has some really cool tax advantages (which will take some work) but it is a high rist and high reward strategy. If you are want to park you money and let it grow, and keep doing it over and over to build a nice portfolio, BRRRR is a great strategy. Regardless of what you do, the important part is you always need to plan for being able to cover the cost of the interest of the money borrowed via HELOC. MY wife and I the same thing you are doing, primary home, fix it up and move to the next one - thats how we got to four rentals doors, and investing and helping others invest in a high appreciating market like Boise has really helped us do this every 2-3 years. Anyways, happy to chat more, just DM me!

Hey @Christopher Rubio, turnkey properties are fine but you lose out on all of the equity gains, and in that price range your appreciate is probably minimal - so any cash flow you have has a good chance of getting eaten up by maintenance issues, a water heater replacement, or more.  If you want to learn about a different way of doing turnkey, where you keep all of the equity, and has the chance to Brrrr the property so you can repeat the process, let me know! Our does this for out of state investors 30-40 times a year.

Hey @John Nocera, long distance BRRRR is a great way to build a real estate portfolio. Whether you use a HELOC, or cash out refinance, it just depends on the each property/situation. The biggest part is taking action and not waiting on the sidelines for the "perfect" opportunity. Our team helps 30-40 clients each year with brrrr projects, many from CA, happy to chat more if you want to learn more!

Hey @Brent Breault, its exciting to hear! Depending on what market you are looking to invest/flip, when you find a team you are wanting to work with I would lean into a local hard money lender and build a relationship there. Nothing against national hard money lenders, but each market can be so nuanced and will underwrite deals specific to that market.  Just a thought, good luck!

Hey @Kathryn Lewis, if you are looking to start investing into real estate and STR is your primary strategy, it is important to recognize that this strategy is high-risk, high-reward. It is a hospitality business first, real estate business second, so you would be focusing on the experiences and amentities at your property and constantly thinking about what aspects will beat out the competition around you. Every market has its nuances and saturations, but folks in our market that are doing well are purchasing and building STRs in the mid-luxury market - $600k+ homes with more than 4 bedrooms, etc. But if you are looking at this strategy through tax advantages, have you dug into the STR cost-segregation strategy? After speaking to a CPA, depending on if you qualify for that approach, most of the time the "cash-flow" you gain from the property are peanuts in comparison to the savings you get via taxes. We've helps a few dozen clients do this strategy over the last few years and they've found some great success. Lots of pieces to this real estate puzzle but taking action will always provide returns.

Hey @Brandon Lee, I would say neither - it is how people are defining what investing in real estate is and taking action. Most newer folks in the investment space I have encountered what immediate results so they can quit their jobs as soon as possible - they think real estate is like a money vending machine, rather than a physical asset to invest in and let your money grow over the next 15+ years. The more folks can see the long term play with real estate and defining their goals around that, than finding/negotiating deals is not that difficult. 

Hey @Brice Peterson, this is exactly what I do and I am up to four investment properties so far! I love this strategy, its not flashy, it takes time but its a great way to build a trail of rentals and build a lot of equity along the way.  

Couple of thoughts: 

-FHA loans are great, sometimes they can be a hassle when you find a property that has a lot of equity upside, but just takes some good negotiations from your agent. We have used both, especially in competitive situations we have leaned towards Conventional 5% as sellers dont often want to deal with FHA.

-I think you should definitely always be looking for two things with strategy, a 10% discount below market value or 10% equity that can be built through renovations as a starting point. This gives you a lot of options having that extra equity for down the line.

- Refinancing while it is your primary is a lot cheaper - you may not always get the perfect rate or the perfect BRRRR, and that is okay, but being able to refinance at a lower cost and and lower your monthly can save you alot.

The most important thing is taking action - most of the deals we jumped in did not look great on paper, but after putting in sweat equity, letting time be yourfriend, rents going up, and being able to pull a HELOC on each of the properties, after 5 years we have cash flow and of a quarter million in equity built to be able to use when needed. Just take action, you got this!

Hey @Jason Deveau, which ever one gets you to take action and purchase your first property. CoC is fine but its a measurement based on a very specific set of data - and any of those pieces could and will change (cash invested, interest rate, mortgage, maintenance, rents, etc.). My first properties I believe had a negative CoC when I got them, and now they are well above 18% - but the amount I money I made and the things I learned would had been completely lost if I had looked at CoC. Find an area that has had consistence appreciation and rental growth over the last 15 years, work with someone who can help identify value add opportunities, and then jump in. Hopefully you find one that helps you get started!

Hey @Erica Morrison, we know this strategy pretty well - we've helped about a dozen clients (have 2 two right now) purchase properties, turn them into STRs, and connected them with a property management commpany to help ensure they meet the required hours/tasks needed via their CPA. Definitely run this by your CPA, but besides the required steps to obtaining RPS, the unit just needs to be put into service and have a booking by the end of the year. The tax savings are awesome, Ideally you identify a property they will at least break even, and then several years down the line after the accelorated depreciation, you could consider 1031 exchanging the property into a new STR and repeating the cost seg. again (verify with a CPA). You got this, good luck!

Hey Nicole, yeah I have heard and seen less traffic as well - some a speculating that the current administrations cuts within a recent big bill is forcing places of employment, specifically hospitals to restrain from paying premuiums on travel jobs and focusing on staffing positions. Of course there are a lot of other industries using furnished rentals but that is what I have seen and felt in my local market where hospitals are a big economic/industry driver in our area.