All Forum Posts by: George Mevawala

@Christian Nachtrieb thank you! It’s actually a full time short term rental property. So I furnished it because we yield higher rents off the furnished rentals than non furnished. I’ve got a fleet of 17 full time vacation rental properties now.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $171,000

Cash invested: $35,000

Value add 2 bed/1 bath townhouse where we added an additional half bathroom downstairs. The unit has just been totally remodeled with over $35k spent on features including all new furnishings, paint, new stainless steel appliances, roof, new kitchen, cabinets, new electrical lighting throughout, new light up vanity mirrors in bathrooms, new washer & dryer, and new flooring throughout.

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

I saw an opportunity to invest in a value add property that met my code. I managed to get it for 24k under list price, and budgeted just over 30k to transition this into a fully loaded STR property. It was a complete gut project, but I am very pleased with the turnout and the cash flow we have seen in this first 6 months.

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

I found it on the MLS and toured it immediately within being on the market less than 12 hours. I went in strong on the offer, but when it did not appraise at contract price, I was able to negotiate it down with the appraisal & BINSR items needed.

How did you finance this deal?

Traditional conventional financing.

How did you add value to the deal?

We acquired at 171k put roughly 35k into it, and we are now sitting on about a 240k product. We have seen about 35k in appreciation or roughly 16% in less than six months. The strong & stable cash flow makes this a win.

What was the outcome?

The outcome was just under 3k a month in cash flow ( averaged out on a 12 month performance basis). Strong STR performance located strategically in a very lucrative area of town.

Lessons learned? Challenges?

I have learned that no matter how hard we may plan, there will always be unforseen issues and expenses with remodels. However, if the outcome is income in the long run then just to keep it moving and not get so upset.

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

I negotiated this entire transaction.

@Prince Zachariah welcome to BP! Definitely one of the most resourceful websites you will ever find for like minded investors from all over the world. I kind of consider it a much more valueable version of a  Linkedin for anybody interested in gaining knowledge on different types of investment properties and many different strategies.

I am a Texas native, but have lived in Arizona for the last 12 years and grown my fleet of successful investment properties out here. However, I have owned properties in Texas and definitely can give you some advice from my own trials and tribulations. What part of TX are you currenlty in?

Texas can be harder for investment properties to pencil ( not all the time, just depends where you are located) with higher property taxes it can be harder for every investment to pencil. I owned two 4plexes in College Station ( where Texas A & M is located) that were value add plays and unfortunately after deploying all the capital into rennovating all 8 of the units  ( even after maintaining 100% occupancy) the rents just did not provide enough cash flow due to the high property taxes & insurance. The win was in the acquisition price, as we saw some good appreciation after selling them both 3 years later. For a college town, we were expecting much better results comparing it to a city like Tempe ( where Arizona State University is located and all my AZ investment properties have pulled minimum 8% annual cash on cash returns).

Now do not let this discourage you, just try and find some nice opportunities that you can have "instant equiy" after adding some value/ remodeling. You want to assure you buy something that has upside potential. Also run the comps and find out the current rents in the area you are targeting. At least assure after all your expenses you will break even ( hopefully cash flow).

In Arizona where I currently live it is a complete different ballpark. We have very low property taxes and pricing is still relatively affordable even with our boom. So just about anything you invest in as a long term investment should be a 6-8 cap all day. My properties see much higher returns as I go the STR ( short term rental) route. Hope this helps and feel free to reach out for any questions!

Best,

George 

@Matt Morgan I was thinking the same exact thing... What he does not realize is that my 17% annual cash on cash return is for a property that I paid cash for lol. The financed plays with 20-25% down are more in the 28-35% annual cash on cash returns. However, I am not a fan of investing in California whatsoever. That whole Coachella Valley/ Palm Springs area is destined to become the next Lake Tahoe with short terms being banned... I am hoping that is not the case  as I think Palm Springs is an absolute wonderful destination to visit, but lots of indicators are pointing in that direction. 

@John D. well glad you're doing well bud. Happy as a clam out here with my system and the growth I have seen in my portfolio in the last few years. We have a fleet of 16 fully furnished STR properties now, so we stay busy.

@John D. numbers look tight? Pulls in 17% annual cash on cash returns, I am not upset with those numbers at all, where are you investing ( very curious to know). Long term rents would fetch $1,450-$1,500 a month unfurnished.
@Francisco Garcia Jr a community called Scottsdale Parkway Townhomes, they rarely come up on the market, @Ryan Swan no I stay away from Hallcraft. Never had any interest in venturing into any of those units.

@Brad Johnson the big question is are you selling the property furnished or non furnished? How I have done it is listed the property as a fully furnished STR property and also included the previous year's annual performance, so I can attract as many investors as possible that invest in short term rentals.. I have never had a problem selling a fully furnished vacation rental and will always strategize & consider all offers as close to/ full list price and give the furniture as a "bonus". Or you can sell all the furniture on a separate bill of sale. If future bookings are to convey, make sure to make a written agreement and handle outside of escrow ( if financing is involved), or it could cause some serious problems in getting underwriting to clear the loan to close for the buyer. These are just a couple things to consider from my previous experience. For platform management, you can work that out with the buyer if they are willing to keep it on as a vacation rental.. Now from a buyer's perspective from my end, I have also taken inherited bookings before when buying a STR property and honored them and just blocked those dates once fired up on my platforms..Goodluck!

@Michael Anderson I just sent you a message. I am a local Realtor/ Investor in the Scottsdale market that specializes in both investing & selling short term rentals and has a fleet of 16 vacation rentals. I also help my client's find vacation homes that meet my strategy and transition them into extremely lucrative properties. On average, my properties see annual cash on cash returns of 28-36%. Feel free to reach out if you have any questions or I would love to be of any assistance.

Investment Info:

Single-family residence buy & hold investment in Scottsdale.

Purchase price: $195,000
Cash invested: $25,000

It was a value add opportunity to buy a 2 bedroom/ 2 bath condo that needed some TLC with breathtaking views of Scottsdale. I acquired the property and complely remodeled ( new floors, new granite, paint, bathrooms, tiled chimney, hardware, doors, sinks and furnishing.) The unit is currently worth around 250k and is another succesfull STR property.

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

It was a value add opportunity that hit the market, and I was able to secure it in under 48 hours of being on the market.

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

I found it on MLS, and loved the location and views.

How did you add value to the deal?

Complete remodel.

What was the outcome?

Both appreciation and upside potential.

Investment Info:

Single-family residence buy & hold investment in Scottsdale.

Purchase price: $156,000
Cash invested: $176,000

Value add STR property located in Scottsdale, AZ that has been operating since late 2016 and has produced over 30k in annual gross rental income ever since going live. It averages over a 90% occupancy rate each year, and has been both an appreciation and cash flow play. Currently worth around 230k market value.

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

I saw an opportunity based on the location, and price point.

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

It came on the market, and I was one of the first investors to tour it.. I negotiated very strong as we were a fast closing and very strong initial offer.

How did you finance this deal?

No financing.

How did you add value to the deal?

New floors, kitchen, bathrooms, carpet upstairs, appliances, patio, furnishings and paint.

What was the outcome?

Became a popular STR property that has continued to stay booked since going live. We have seen roughly $50,000 in appreciation ( 30% return ) and also yielded very strong cash flow.

Lessons learned? Challenges?

I learned to take my time with all my future investments. We did really good on this first investment based on timing, but also now take more time with my designs and finding the right contractor.