3 Year Experiences,Stuck on next step of my REI development

[Justin Bettano]

Hey BP Community. 

I have been involved in REI investing for 3 years.

Property 1: Rental Multi 

I started out with a 2 unit multi north of Boston. Which I currently still hold, and cash flow decently. Value comps are about 540,000 my debt is around 385,000. my monthly net CF I’d about 1,500 haven’t raised the larger u its rent in over a year due to wanting to retain the current occupants. 

Property 2: Fix and flip 

The second property in my REI journey was a 3 way partnership deal. On a Boston south shore single family. It was intended as a fix and flip, and our original exit strategy was reached. we bought with hard money then did a refi to convential because repairs became drawn out and rented for some cf to by is time. we ended up selling for 405,000 and our loan balance was 235,000. After taxes I netted about 40,000 after about a year of work and management.

Property 3: Primary Fixer upper / home. 

My gf and I bought a primary North of Boston. Have put some work into it, refinished bathroom, revamped landscaping, new front and back porches. Finished one of the bedrooms that was in dated and aged shape. This home I view as a place to live and build a family for now until opportunity presents itself. 

My gf and I have a household w2 income of 170,000, before my income from my rental property 

My ultimate question is what should I do. I’ve been thinking going the second home/ mid term/ str route. another thought I have is venture further into a rental property but I know with rates, finding a deal that would cash flow would be tough. 

Any pointer, expertise or discussion would be greatly appreciated ! 

[Jason Wray]

Justin,

I have properties in Boston, Dracut, and Nashua and Boston right now is tough to cash flow due to price point and taxes. Have you looked up around North Conway, NH if not take a look its a dynamite spot to jump into the STR world. All around Jackson, Conway and North Conway you can find some great SFR's, Townhomes, and smaller cottages that get a lot of traffic 365.

You have 5 main Mountains to Ski/Snowboard/Tube plus lodges all in that area as well as a great off the beaten path town filled with coffee shops, Bars, Restaurants, Ski shops, Outlets, Mall, and a  Main train station that goes all the way up into the White Mountains.  Plus its a non stop location for tourism Summer Camping, White Water Rafting, Rock climbing, 4 Wheeler/ATV, Hunting, Fishing.

Winter - Ski, Snowboard, Tube, Ice Fishing, Hunting, Winter Breaks away from the Heat etc. Great thing about that area if you are in Boston you can buy as a Vacation home with only 10% down and still rent it out.  

All year round North Conway and Jackson host monthly activities like Apple picking, Pumpkin carving, Host all the Major Holidays, Christmas, Thanksgiving, Easter, Mothers Day, Fathers Day, Halloween, Turkey Trots, Winter Ice plunges and more.  VRBO is a very popular go to for that area and its worth the investment.

Can always pull cash out of one of those properties because rates just dropped this week making refinances a lot easier on the wallet! Cash out refinance is the way to go since rates are lower than Helocs and its over a 30 year versus a shorter LOC.

[Nathan Gesner]

Quote from @Justin Bettano:

1. Learn how to manage better. You aren't raising rents because you don't want to lose your tenants? That's a rookie mistake. There are great tenants willing to pay market rate. By charging market rate, you earn enough that you can afford to maintain the property, which attracts quality renters willing to pay market rates. If you get behind, you'll start neglecting maintenance and/or attracting lower-quality renters.

2. The hard path is the one least traveled and most rewarding. Don't give up on growth just because it's hard.

[Justin Bettano]

Quote from @Nathan Gesner:

Quote from @Justin Bettano:

1. Learn how to manage better. You aren't raising rents because you don't want to lose your tenants? That's a rookie mistake. There are great tenants willing to pay market rate. By charging market rate, you earn enough that you can afford to maintain the property, which attracts quality renters willing to pay market rates. If you get behind, you'll start neglecting maintenance and/or attracting lower-quality renters.

2. The hard path is the one least traveled and most rewarding. Don't give up on growth just because it's hard.

Thanks Nathan! 

[Alan Asriants]

I don't think you should start to change strategies. You seem pretty educated in the field and can likely point out of a deal is good or not given the market conditions. 

Set your sights on acquiring another solid deal. It wont be the same as property 1 or 2 given the market, but maybe there is a solid opportunity you can jump on that is lucrative today.