All Forum Posts by: Stephen Johnston

Investment Info:

Single-family residence buy & hold investment in Ocean Springs.

Purchase price: $150,000
Cash invested: $20,000

Small, unique 1 bedroom/1 bathroom SFH. Bought as a long term rental and converted to STR about a year later.

https://airbnb.com/h/bayoubungalowosms

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

Wanted to just get started and was familiar with the area. I also really like that the house was very unique.

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

Found on the MLS and contacted listing agent. It was listed over a holiday weekend and I think a lot of buyers were unavailable.

How did you finance this deal?

Small local community bank

Lessons learned? Challenges?

I learned how to get financing for an investment property.

I use 20% of purchase price. Meaning if the property can generate 20% of the purchase price in gross revenue it would be something I'd look into more. I think the numbers could work if you went as low as 10% but I would want a lot more certainty.

In short, the more risk or uncertain the properties expenses or income I'd want it to be closer to 20%, if the property has more certainty or easy to analyze expenses then I think a number closer to 10% could still be successful. 

An example of uncertainty would be, flood insurance, a hurricane area where insurance cost fluctuate substantially, taxes, city regs,etc. 

 yes I do, shoot me a message!

@Chris R. Gallo the 30 day min is true if you do not have a STR permit. Right now the permits are capped at a total of 75 with about another 25 on waitlist! The city is no longer taking applications to be added to the waitlist. I think there's demand for long term rentals, a lot of the rental supply has been converted to STR or sold to people relocating to the area.

My advice would be to pick an area and make a list of every lender you can find (big banks, community banks, credit unions etc) and just start calling. 

Something like this, "Hello, this is XYX Bank. Yes, can I talk to someone about getting a mortgage? I'm closing on a property soon and want to understand what mortgage products and terms you currently offer. (side note: each bank has a menu of mortgage products that they offer and regularly change depending on how they want to make changes to their loan portfolio.) 

A lot of these will be generic canned answers and the person you are talking to won't really know what they are talking about but others will be incredibly insightful and give a full detailed response and you will get a masters class in the topic. Some will do all the talking and tell you everything, even to questions you didn't know to ask (this is valuable) other you will have to pull the answers out of them and ask tons of questions. After a few dozen calls you will get a picture of who offers what product and what products are available to buyers. 

I recently did this for a house I purchased in Biloxi, MS. Created a spreadsheet with every lender I could find from NOLA to Mobile, maybe 50 total and just started calling and taking notes. It probable took me a week, but I learned so much that I never knew before! I actually needed to do it to find a lender for my purchase, but it's such a good exercise that I wish I would have done it much sooner. Let me know if you have any questions. 

Investment Info:

Single-family residence buy & hold investment.

3bd/3ba home and using as a vacation rental. So far we are beating the Airdna revenue projections!

Incredible feedback everyone! Thank you all very much, I really do appreciate it! 

It's interesting to hear the feedback based just on the photos (which is what all guest will do) and compare it to the impression that we have after spending time in the space. Like the art for example, we LOADED the house with art (95% from local artist or of local scenes) like to the point we were afraid that we were over doing it! But I'm realizing that it's not coming across based on the photos/angles. 

The jumbled photo order is definitely a mistake on my part!

Thank you all so much!