All Forum Posts by: Timothy Church

@Juan Monge Thanks! Let me know the next time you are down. I'd love to walk you through it.

The best part about having a steel-framed structure is that none of the walls in the interior are load-bearing. I drew up the floor plan of the upstairs for my personal space and efficiency apartments. I'm ready for walls to start going up!

To be honest the deal wasn't advertised well. The only reason I was able to find it was due to an old plywood sign they had in front of the building but behind an overgrowth of plants. I searched online for specifics of the deal and there was no online presence for it. I was finally able to get through to the realtor who had it listed and went from there.

The gentleman who had owned it had passed away and given it to his grandkids. It was a situation where they didn't realize what they had. 

So here is the demolition up to its current state! We still need to do the demolition of the back offices and kitchen. Unfortunately, they are concrete/plaster walls. The demo of this area will be much more difficult. We are hoping to have the demolition complete and cleaned up within the next week and a half though!

DEMOLITION!! More pictures to follow!

I decided that I would like to keep a chronological record of my current project and share it with everyone. So here it is!

This is my new building on the corner of 27th and Market St in Galveston, Tx. It was originally built in 1957 for the ILA (International Longshoremen's Association) to be used as a lodge for their #1453 chapter. It is a mid-century modern building consisting of metal-framed structure which is enclosed in terra cotta hollow tile bricks. It had the lodge upstairs with 2 offices, a kitchen, and bathrooms. The downstairs consisted of an apartment and 3 commercial spaces.

The previous owner purchased the building from the ILA and transformed the upstairs into a massive model railroad museum! It was an impressive sight! Here is a virtual tour of the upstairs showing all the work he had done.

Here is the plan!

This project is going to be a commercial house hack/BRRRR project. The upstairs will be divided into a personal residence as well as 2 apartments. Downstairs will be made ready for the 3 commercial tenants and I will be using the downstairs apartment as an office/hang out space. I purchased the building on October 10th for $310k. At that point, the appraiser said the as-is value was $510k!! He also said after build-out but before performance (ie tenants) the building would be worth $850k. My current renovations budget places the rehab at around $315k. I am going to try to get the value up to the level of being able to refi and pull out all my cash.

While this is happening, I will also be renting out spaces to tenants. I will have the 3 commercial spaces available first. These spaces range from 845 to 1040 sq ft and will be rented for between $1,000 to $1,200/month. There will also be two Airbnb apartments upstairs which will be catering to tourists coming in for event downtown as well as cruise traffic. They conservatively should bring in $1,500/month each after expenses. Between these spaces, I should be able to bring in roughly $6,300/month. Currently my burn rate for this property $5,000/month before utilities for my spaces! 

I'll be posting regular updates to this thread with photos of what is happening and the plans! I will be posting quite a bit now to catch up on the last month. Would love to hear everyone's thoughts!

Good afternoon!
I am an investor and property manager down here. I'd be happy to give you an overview of the market to see if it is something that might interest you. Feel free to text me and we can set up a time to talk. It makes it a lot easier than a bunch of long emails. If you have any particular questions that people might want to know, feel free to ask them here and I'll answer them.

Have a great day!

@Leisa Neal

I'd be happy to! If you'd like to grab a coffee next time you're on the island, we can sit down and talk about the market. The more I talk real estate with other investors the less I bother my wife with it!

@Leisa Neal

It really depends on the situation and how you present things. Going for a higher number of guests is a good way to be able to pull in a higher rate but how you do it can dictate what kind of guest you get. For instance, there is a big difference between making a room into a bunk room that can sleep 4 guests and adding a bunk bed to a dining room! If you have a large enough room, I have done two queens with full beds bunked over them in a built-in setup. It is in a property that primarily gets used for family reunions and larger events and it works perfectly for that!

As far as what you provide for guests, there are the bare basics but there are also a lot of small one time purchases that make a large difference. A spice rack, wagon for beach toys, and luggage racks for the rooms are all small one time purchases that make a big difference for the guest.

With pricing, using a dynamic pricing tool and adjusting prices based on occupancy works wonders. While your rate does drop, it opens you up to more potential guests. I currently have a traveling nurse who is staying in one of my 2 bedrooms for 3 months because the rate worked! As far as bad guests, they come at any price point. Recently had a guest who paid over $300/night for a west end property and was by far the worst guest I've had!! Your house and its state tend to be what attracts the correct guest. If you run your prices dynamically, you can help to keep a higher level of guest!

I would recommend getting things set up and stabilized through property pricing. Afterward, if you feel that you are attracting guests that are a bit rougher on the property or not to a quality you would like, make improvements to the property to drive up the price as you move forward.

Since you are still in the shopping stage, I'd recommend looking towards 3-4 bedroom properties. The number of 2 bedroom rentals on the island has risen and caused the rates to become more competitive. Once you have 3-4 bedrooms you are typically dealing with 2 families or couples and can pull a higher rate. Don't be afraid of smaller properties with more bedrooms as long as the layout works. I have a 4 bedroom that is only 1150 sq ft with a great layout and it has become one of the best performers!

I currently manage an Airbnb that is a 3/2 in Pirates Beach as well as have sold a few over there. I'd be happy to walk you through the various expenses. If you want to PM me we can email back and forth numbers and get them nailed down.