All Forum Posts by: Tim Mieney

Hey all,

Just figured I'd provide an update. I decided not to move forward with the Cape Coral build. Had I found this opportunity in 2020, it would have been a no brainer. However, at this stage of the cycle I am hesitant to jump into New Construction, especially with interest rates on the rise and a recession now underway. My opinion, there are still deals to be made, but going with something more turn-key and conservative with solid numbers is the place to be for the next couple years. I fear that the BRRRR crowd is especially playing with fire at this time and I'd rather air on the side of caution than risk. Again, there are still deals to be done, but your underwriting needs to be more conservative.

We're currently under contract for a 12 unit townhome style complex here in Rochester, NY that will yield some incredible numbers once fully stabilized. The bank is giving us a 6 month, interest only period, so even with current undermarket rents, we'll cash flow nearly $2K/month after expenses, management and reserves (which we'll be using to further build our cash pool). 

Just my opinion, but I believe B Class and C+ (stabilizing to B Class) is going to be the sweet spot over the next couple years. 

Good luck ya'll. If you're a private lender reading this and you're looking to place some capital, let's connect!

 Yes, I forgot to mention that the build through R2R is 200sq ft larger. 

 Yep, they're solid in my opinion. Robert, from Whitestone seems like a good dude. Zoomed with him a couple weeks ago.

 Hey Heather. Yep, I spoke with Robert at Whitestone. Nice guy, very knowledgeable on the area and where it may or may not make sense to build. The biggest thing I've heard from other investors is that Whitestone subs out work whereas Beattie Development (the one building for R2R) has everyone in house. This may or may not be a good thing, depending on your opinion of subbing out work. R2R also has a 4/2 model that is currently about $20K cheaper than Whitestone's closest model, but I'm told the build price through R2R (or moreso Beattie) is about to jump up $15K. As annoying as it is to move slow, I'm still taking my time and learning all I can about the opportunity, about Cape Coral and trying to weigh all that against my expectations/fears on the overall RE market in the next 12-18 months...

 Hard to know the entire situation without knowing the tenant, but it sounds like you've got a needy tenant on your hands. Tenants will complain their way to new stuff. I had a tenant complain nonstop about a sliding door. It was always something different with the door and he would not give it a rest. I had our contractor go over and inspect the door, install new hardware, make sure the door was sliding properly and I even inspected it myself, nothing wrong with the door. After we told him the door was fine and we wouldn't be replacing it he put gave us a 30 day notice and he moved. Our new tenant has no issues with the door and is paying $100 more in rent :)

 Absolutely. I think one thing investors need to be mindful of in these times is, even if appreciation does continue, rents will always lag behind. If you have a market appreciating at 3% annually, your rents will not be able to sustain that same level of appreciation. I think 1.5-2% rent increases year over year is a safe metric to use in most markets, but every market is different. I've just noticed on some of these Pro Formas from various companies that they're putting their appreciation on value and appreciation on rents at the same level and that's just unrealistic. 

 Rent to Retirement is offering this in Cape Coral, FL. You can personally build one house yourself and take advantage of all the potential equity. I'm strongly considering pulling the trigger and doing a couple builds at once.

 It is definitely hard to argue with the trend, which has consistently been in our favor, even prior to the last two years. I feel relatively confident in the overall market there at this point. Even in a downturn, renting should still be in high enough demand that we could at the very least break even, and that's assuming some pretty bad circumstances... I'm trying to poke holes in the investment and the biggest cons are basically rising interest rates and market volatility. But the pros vastly outweigh the cons. Not doing something because something bad might happen has never been my MO, but I'm trying to do all I can to make an informed decision. I've been asking everyone I can about Cape Coral overall and so far, the worst opinions are still far better than where I live in Western, NY...

@James Wachob We'll catch up again soon. I'm still compiling my findings and researching markets. If we like Memphis enough, you'll be my first call.

@David B. 100% with you on this. Appreciate your insight.