Jacksonville Investor – Subject-To + PadSplit Conversion Project

[Kevin James O.]

Hi BP Community,

I’m an active investor here in Jacksonville, focused on creative financing strategies (Subject-To acquisitions) and value-add conversions 

My latest deal is a Subject-To property we’re renovating into a 7–8 room PadSplit. I’m targeting strong monthly cashflow once stabilized.

I’m here to connect with other investors, private lenders, and local partners who are active in the Jacksonville market and interested in learning more about creative strategies. Always happy to share what’s worked for me so far and hear how others are structuring their deals.

Looking forward to building with the community!

— Kevin O., IKAN LLC

[Chris Grenzig]

I second what @Basit Siddiqi said, Padsplit is very hit or miss right now. One of my concerns too is how big is the market for rent by the room for tenants? A lot of investors have been trying it and still are trying to increase their revenue and make deals work that they bought in years past or new ones, and at some point there is going to be more supply than demand. 

Maybe that threshold is 50 more rent by the room listings, maybe it's 5, maybe it's 100,000, I have no idea. However, my suspicion is that the market for rent by the room is not a huge percentage of the overall renter pool, and the more people look to do it, the less you'll be able to charge and thus the increased work to do rent by the room won't justify the smaller increase in revenue versus other types of lease options. 

I'm not saying this to say anything negative against your specific deal, you, or the idea of padsplit in general, we just saw something very similar happen with furnished mid term rentals and short term rentals and we've had a lot of conversations with owners the past 1-2 years about taking their short term rentals back to traditional rentals because it just didn't make sense anymore.