All Forum Posts by: Zachary Beach

@Patrick Giblin that's not a deal unless your ARV is way low and your rehab Budget is very high normally it is the other way around.

@Travis Fisher couldn't you just get the 35k as line of credit. I feel like this plan is a pretty short sided way to save a few thousand and then pay an extra 1.2k a year after your camping trip so you break even in a few years then start lossing on this idea. Plus As others have said LOC's get pulled all the time I know someone that had one pulled less than two years ago. The banks can pull them just because they are having liquidity problem or your credit or job status changes. Plus you are missing out on the money that the 115K could bring in. There are tons of people myself included that would pay way more than you are saving for a loan if you didn't want to go the stock market way I wouldn't blame you with a 18 month hold time. Or you could buy another that needs a rehab bit would be able to rent now and Brrrr it later and get paid the rent now. Paying off the house to spend more to get a LOC seems counter productive. With 4,500 podcast surely you have heard of better ideas. Least risky options is probably a CD and you break even in 4 years from the extra cost of the LOC. Do you have another income source like a pension or something? Are you going to be traveling the world or staying in one area? I would go travel if I was doing this I have been to 24 countries now but would love to do more. We two small sons it a bit of a challenge at the moment for me. Good luck in whatever you decide.

@Billy Bailey my wife and I started our own management company because we were fair from impressed with the ones up here. We only did our own properties for the first two years but now offer our services to other people.

@Michael Elefante that's awesome sounds very similar to my wife and I. We flipped and brrr'd into STR's in one year and had enough cashflow to be financially independent in one year. Now two year later after taking two small retirement we are back at it and with the increase of rent from COVID two of our rentals make more cashflow Profit than are cost of living for the year each! Not even counting Appreciation. Well done to you guys!

@Brian Pouliot we don’t do cable in our places and the are top properties in a market with thousands I believe we would make exactly 0 dollars more having it.

@Fernando Enrile I invest in BIG bear California about an 100 miles from downtown LA and 150 miles from San Diego. Basically a different state from Northern California. It's a ski and lake town in the mountains with nature, hiking, mountain biking, fishing boating, rock climbing Etc. we where already doing extremely well but even better now. We have had super high inflation and even higher rent growth on properties that already had some of the best cashflow in the country. We have had over 20%CoC and 20% appreciation plus now markets rents are up 58% and my properties so far 2021 are up 63%. The inventory is almost to nothing because it's all being bought up super quickly. This time of year weekends are over a thousand dollars a night. I have been paid 1.9k for one night on Property I bought for 196K 2.5 years ago almost one percent rule for a day! They also still positively cashflow every month of the year with crazy numbers for winter and holidays seasons. We do a lot better than average about 2-3 times as much revenue as 50th percentile for comps because of our management including having the highest revenue of any property for 6 or less guest for the whole city.

@David A. I just answered Sarah about the idaho units so check that out for the big bear ones we manage depending on the financing there are currently deals for over 20% IRR without appreciation. If Covid prices keep up even over 20% CoC passively after management. Think over 10+cap rate with 3% loans at 80% LTV that's a return of 38% with no appreciation. And over 20% CoC. I will say getting property is hard right now there are ten times the buyers and properties for sale and weekends are renting for well over a thousand per night. And week days are sold out also. Part of that is that are properties are top performers including 1 in big bear city for 2019 for 6. We revenue about 2-3 times what the other management companies and the 50% percentile do. I will say that LTR's being bought this year I agree with your statement in most good areas it's hard to get 6% CoC with management passively.

@Sara W with my Idaho units when we bought we where about about 20% IRR without appreciation. It was around 12% CoC plus some loan pay down and tax benefits. with appreciation it has been much higher. I will also say that I haven't gotten any there in about 3 years and there has been very high appreciation so the type of deal we got is probably gone. It was at 1% rule when we got it but now they are selling closer to .7%. Even with about 15% rent increases. With appreciation it is much high as we have had over 60% appreciation in the 3 years and we did a high level of leverage. I wouldn't invest in LTR's if there is no appreciation play the yield is just to low for what I can get. I very low 2% yearly appreciation increases the return by 8-10% and if you are willing to-hold 20+ years then it would be unwise to not include it in your calculations. I would suggest only putting calculating the worst 30 year period for your market in the last 100 years as what you calculate for a prediction.

@Joey Hart you say you recognize your first deal won’t have amazing returns. Why? Don’t limit your goals because of people with limited knowledge or skill limit themselves. Go where you have an edge. In my market my edges include being able to get substantially higher rents for the same properties about 2-3 times as much. Being able to renovate decorate and furniture in ways that are both more liked than average and cheaper. Recognizing the true value a place has and being able to creatively look at a property and find the best how not the how not.

Good luck

@Fernando Enrile consider California we have some of the highest appreciation and total IRR rates in the world and with STR markets in California (if managed optimally the cashflow over  maintenance is better than any markets I have heard of.) be where people want to be not where they don't want to be. This has been a good year no doubt and not every year will be as high but my California properties have had over 100% return on equity in the last year and both rents and appreciation are still getting hotter. Rents are up 58% in my market and they were double digit cash-flowing properties before that.