Little I knew that the Puerto Rico rental market is on FIRE...
We where faced with the challenge to rehab or not a property we own free and clear in Puerto Rico. I am originally from there... This is a class C+ neighborhood in the Carolina area near a regional hospital. The economy is lagging there and real estate is under pressure. Unemployment is rampant at 14%, population is eroding and banks are not approving loans.
We had a tenant in place for 3 years that decided to move one. Since they never complained we never did any repairs (I know shame on me). For this reason I knew things were going to be - ugly. A decision needed to be made... Stop our Miami operation and go or not. The property was going to sit vacant so screw it - I flew in. And oh boy, this thing needed everything; severe water leaks on roof, major pressure washing, painting (inside/outside/ceilings), replace plumbing, electrical, appliances, landscaping was a joke, etc. etc. I estimated around $9k to bring it alive. This project was too much for me or even 2 people. I needed a 4-5 people crew! Pronto... I felt defeated.
But I learned from my local intense South Florida market (and here in BP) that if you want to stay relevant you have to go out there, fight the noise, and get the business. So for 2 full days I knocked on doors and asked around if anyone knew of reliable people that could help me. Two full days went by and nothing. Then a good friend of mine raised his hand and said "yes, I have a crew. they will be there at 8am ready to go"... The next morning they were there. Outstanding work these gentlemen did. They took care of everything. The property was ready and with the "For rent" sign in 5-days. Total spent $6k. I have it all in a spreadsheet with local prices and labor cost.
To my surprise the property received 25 calls, 12 appointments and 4 offers in just 3 weeks. It literally flew off the market. My underwritting was intense: good credit, clean criminal records and solid income. I was floored with the amount of veterans and federal assistance recipients that are shopping around in Puerto Rico for rentals (good quality families). Banks are not approving and these people just don't care to purchase a property at the moment.
This crew is now doing all the maintenance so no need to go back to handle Tenants, Toilets or Trash... Before leaving I stopped by La Placita (hangout social spot near San Juan) and met with an old high school friend. I shared my story and he said hit me up I didn't know you were investing - I am a portfolio lender! I almost felt off my chair... You're probably thinking exactly what I am thinking after this encounter ;-) 😊
Economic conditions are not the best down there now but make no mistake, the island is not going to disappear much less it will be abandoned completely... People will need a place to live. Lessons learned: 1) do not neglect your long distance properties, 2) constant networking is paramount. People do change careers. Some become portfolio lenders. 3) don't be afraid to hit the pavement and knock on doors. 4) where there is a contraction in a market thrust your gut, be calculated and expand into the market. 5) repeat 1 through 4 and purchase another property. Pics below. Saludos
Painting...
Pressure cleaning...
Roofing and leak repairs...
Interior walls and ceilings painted...
House rented...