All Forum Posts by: Zachary Farris

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I am looking at a 4 plex which was built in 1995 and needs some work. Mainly flooring, paint, baseboards, exterior paint and additional repairs to one unit (estimate for those repairs were already given by a contractor). I plan to use a rehab loan and use my own money for the down payment. I am hesitant to do so, and know a lot of investors use other people's money. I just don't know how to go about securing the down using OPM, nor am I familiar with how that would change my expenses. It would be nice to keep my cash, as I believe this property will need a new roof before I have saved up enough from the profit of this property (built in '95 and will likely need a new roof in a few years if it is a 30 year comp). Please give me some guidance, and let me know if I am going about this the smartest way. Thank you,

-Zach

Thank you for the replies. 

1) I did calculate at 50% of what airdna projects, and that would cover expenses and generate a very small profit.

2) I like the idea of buying the 2nd property and refinancing down the road to buy a 3rd. I guess I was more curious as to if paying off the mortgage on the LTR in 5 yrs would allow us to grow faster by saving over 100k in interest. It seems hard to find deals right now. 

3) I'm 35 and have 15yrs left in my career where I'll retire and collect a pension. We don't want to move into a fixer. We built our current home and its only 3yrs old. We have a 2.5% interest rate on our primary home. 

4) Our goal isn't necessarily to generate a lot of cash flow now. A small amount would be nice, but ultimately, we want to have extra money to travel, etc when I retire in 15yrs. So, it would be nice to have several assets that would generate cashflow down the road. 

Hello! My wife and I bought our first long term rental in March, 2023. It is currently Grossing approximately $500/month (net is $220). Its financed with an 10yr ARM at 5.25%, currently. Our primary home has a 2.5% interest. We are looking to expand, however we are finding that very difficult due to the current market. We have considered options such as long term, short term, and BRRRR. We started looking more seriously into short term and found a location which a friend is successfully renting short term (he has a lower interest rate than we can get now).

We have $90,000 to invest. So, my question is: Do we put our $90,000 down on a short term rental that (based on my friend's occupancy) would yield approximately $2,500-$4000 gross cash flow, or do we take that $90,000 and pay down the current rental. By making a lump sum principal payment on the current rental, we would save $126,973 in interest and own the home outright by 2030 (assuming we did not make any other principal only payments). We could probably own it outright by 2028 with additional payments each month.

My biggest concern is AirDNA is not real accurate. Looking at short term rentals, AirDNA gives a really high occupancy rate, however my friend (who is a super host on airbnb, all 5 star reviews) says that info is inaccurate, according to his bookings.

Any advise would be appreciated! Thank you.

-Zach and Karen