My 4th rental property is now under contract

Chandler, Arizona
House Hacking
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My 4th rental property is now under contract

Jarrod Ochsenbein
Rental Property Investor · Oregon/Arizona · Member since 2023 · 124 posts · 79 votes

    I don't post a ton on here, but wanted to start posting more in an effort to share, network and learn.  I started investing a little over a year ago and have earned almost $160k gross so far with 3 Padsplits.

Next year if I do nothing, the 3 current properties should earn about $200k gross.  The net this year is $36k and next year it should be over $48k with these properties.  

My 4th property is under contract now.  The main house will be house hacked for the first year and will turn into a co-living.   It has a full studio casita out back that will be an LTR.


I plan on buying 3 or 4 investment properties this year after I learn more on the co-living marketing and rent collection side of things. I am using rent-redi for this house since it comes with BP pro.  Since I have been using Padsplit for my first 3 investment properties I don't have the skills built yet for marketing or rent collection.  This property will be my first and I will be learning as I go! :)   At least I have the systems and processes in place for the co-living model.

Just thought I would share a little of my first year experience.   

Happy Holidays

Jarrod

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Nicholas L.Pro Member
Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
1y

@Jarrod Ochsenbein

congrats.  i know i could probably look at your other posts but since you posted...

-are you buying with conventional or DSCR financing? or something else?

-how many bathrooms per resident have you found to be successful?

-how is management split among you, PadSplit and any other third parties?

-any major differences among your 4 properties?

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  • Nicholas L.Pro Member
    Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
    1y

    @Jarrod Ochsenbein

    congrats.  i know i could probably look at your other posts but since you posted...

    -are you buying with conventional or DSCR financing? or something else?

    -how many bathrooms per resident have you found to be successful?

    -how is management split among you, PadSplit and any other third parties?

    -any major differences among your 4 properties?

    1Reply
  • Jarrod Ochsenbein
    OP
    Rental Property Investor · Oregon/Arizona · Member since 2023 · 124 posts · 79 votes
    1y

    I am buying conventional for primaries and DSCR for the rest.

    I think 3:1 ratio is the max I would go.  I do have a house that is 4:1, but it works due to peoples schedules and mostly male occupants.

    Padsplit manages the member acquisition and rent collection and I do the rest.  Maintenance, disputes and anything else pretty much falls on me if I want to have a successful property.

    The major difference is my first one is in Glendale, next 2 are in Phoenix and the 4th one is in Chandler.  Phoenix metro is essentially East Valley good, West Valley not as good.  It is more expensive to buy in Chandler, but I have been moving East this entire time and every time I go a little bit more East I find the tenants are that much better and life is just easier.  My Glendale house still performs well, but it just seems to have a bit more on the member management side than the rest due to the members I have been exposed to.  I have improved my vetting skills quiet a bit in the last year, so things are more stable now.

    1Reply
  • Jake BakerBusiness Member
    Flipper/Rehabber · San Diego, CA · Member since 2020 · 1k+ posts · 694 votes
    1y

    @Jarrod Ochsenbein

    It's great to hear that you are succeeding with the co-living model. I recently purchased my 2nd co-living BRRRR in Jacksonville, FL. Things are going well so far - I am using Grant Shipman's model (LivingSmith) instead of padsplit, which works great for me.

    How nice are the neighborhoods you invest in? 

    What kind of insurance do you use? A lot of insurance companies do like the co-living model.

    [email protected]
    BookkeepingRE - Bookkeeping for Real Estate & Service-Based Businesses58 Reviews
    WebsiteView Page
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  • Jarrod Ochsenbein
    OP
    Rental Property Investor · Oregon/Arizona · Member since 2023 · 124 posts · 79 votes
    1y

    The neighborhoods are C+/B- areas.   

    I use Steadily for insurance.

    I went to Grant's class and did Sam Wegert's 5 day think a while back.

    Is LivingSmith a property management company?  I am guessing I missed that part and it is Grant's PM co. 

    0Reply
  • Jarrod Ochsenbein
    OP
    Rental Property Investor · Oregon/Arizona · Member since 2023 · 124 posts · 79 votes
    1y
    Quote from @Jarrod Ochsenbein:

        I don't post a ton on here, but wanted to start posting more in an effort to share, network and learn.  I started investing a little over a year ago and have earned almost $160k gross so far with 3 Padsplits.

    Next year if I do nothing, the 3 current properties should earn about $200k gross.  The net this year is $36k and next year it should be over $48k with these properties.  

    My 4th property is under contract now.  The main house will be house hacked for the first year and will turn into a co-living.   It has a full studio casita out back that will be an LTR.


    I plan on buying 3 or 4 investment properties this year after I learn more on the co-living marketing and rent collection side of things. I am using rent-redi for this house since it comes with BP pro.  Since I have been using Padsplit for my first 3 investment properties I don't have the skills built yet for marketing or rent collection.  This property will be my first and I will be learning as I go! :)   At least I have the systems and processes in place for the co-living model.

    Just thought I would share a little of my first year experience.   

    Happy Holidays

    Jarrod


     Hit $160 right after I posted this. :) 

    0Reply
  • Ify (Bobby) Anizoba
    Specialist · Atlanta Metro Area, GA · Member since 2020 · 38 posts · 23 votes
    1y

    @Jarrod Ochsenbein Response:

    Hey Jarrod,

    First off, congrats on your success with the pad-split system! It’s great to see how creative approaches to house hacking are working well for you. I’m really interested in learning more about your experience.

    I’m curious about the potential downsides and challenges you’ve encountered with this system, especially when it comes to picking neighborhoods. Are there specific factors you look for in an area to make sure it’s a good fit for this type of rental setup? It seems like location would be especially critical with pad-split (and similar systems), but I’d love to hear your thoughts on what to watch out for in terms of zoning, safety, or demand.

    Also, I’ve traditionally rented out units the regular way, so I’m curious how screening tenants works for you with the pad-split (and similar) model. Are there any unique considerations or red flags you look for compared to the traditional rental process? I imagine there’s a different dynamic with tenants sharing common spaces, so I’d love to get your insights on how to manage this aspect effectively.

    Thanks for sharing your experience, looking forward to learning more!

    0Reply
  • Jeremy Horton
    Rental Property Investor · Somewhere over the Rainbow · Member since 2021 · 1k+ posts · 1k+ votes
    1y

    Glad it's working for you 

    I slowed down on RE for about the past year and a half 

    S&P 500 is up 27% YTD, NASDAQ 100 up 32% 

    0Reply
  • Jarrod Ochsenbein
    OP
    Rental Property Investor · Oregon/Arizona · Member since 2023 · 124 posts · 79 votes
    1y

    Thanks Jeremy

    0Reply
  • Jarrod Ochsenbein
    OP
    Rental Property Investor · Oregon/Arizona · Member since 2023 · 124 posts · 79 votes
    1y
    Quote from @Ify (Bobby) Anizoba:

    @Jarrod Ochsenbein Response:

    Hey Jarrod,

    First off, congrats on your success with the pad-split system! It’s great to see how creative approaches to house hacking are working well for you. I’m really interested in learning more about your experience.

    I’m curious about the potential downsides and challenges you’ve encountered with this system, especially when it comes to picking neighborhoods. Are there specific factors you look for in an area to make sure it’s a good fit for this type of rental setup? It seems like location would be especially critical with pad-split (and similar systems), but I’d love to hear your thoughts on what to watch out for in terms of zoning, safety, or demand.

    Also, I’ve traditionally rented out units the regular way, so I’m curious how screening tenants works for you with the pad-split (and similar) model. Are there any unique considerations or red flags you look for compared to the traditional rental process? I imagine there’s a different dynamic with tenants sharing common spaces, so I’d love to get your insights on how to manage this aspect effectively.

    Thanks for sharing your experience, looking forward to learning more!


    Thanks Bobby. Yes it is a different animal. My buy box is C+/B- 2000 sq ft or better, no HOA, no Pool, 2.5 bathrooms or better and plenty of parking. I first look solely at parking, since I do 8 bedrooms. If there isn't parking I don't even look at the house. The layout and the bathrooms are the next consideration. The master bedroom has to have a way to share the bathroom. I either jack and jill the bathroom or add a hallway blocking off the bedroom portion to that bath to allow access for the rest of the members.

    Screening tenants is initially Padsplit.  We call renters members due to the legal structure.  What you would call a lease, I call a member agreement. Think of it as a gym membership where you get access to the gym.  When Padsplit presents them to me as a potential member I have several questions for them.  I discuss every house rule.  This in itself drives off about 10% of the potential candidates. I don't look at this like loosing a member. I look at it as saving the rest of the existing members and myself headache.  I would say each section has it's own set of criteria I don't budge on.  Buy Box is set, class neighborhood is set (C+/B-) and rules are set.

    It is working well and I don't have most of the drama the other hosts I talk to have. Part of this is the quality of the house. I charge a completive market rate while providing a really good service.  I update the kitchens, floors and bathrooms to granite or quartz.  Stainless steel appliances, cleaning service every other week and I am johnny on the spot with repairs.

    As a result my vacancies are not that bad even with a model designed to be somewhat transitory.  Generally if people are in town they stay with me till they have to go.

    Everyone wins.

    The downside is if you get a bad apple in the house it can and will spoil the entire bunch. This is why it is critical to vet members up front.  If you don't it will bite you in the ***.  I encourage anyone reading this and thinking about co-living to pay attention to this part very carefully. If you bend on this to get a member in because you want to fill the place it will bite you.  In my opinion it is not worth it.  Twice now over the course of a year I had it happen to me. It is flat out not worth the headache, impact to other members and having to find new members anyway to fill all the spots that left because you wanted to fill a single room. 

    Another down side is just in the first year or two.  Lending is a fun one.  This requires more than I can type here in this reply, but essentially there can be more moving parts unless you do it in a sequence.  

    Anyway thanks for asking.  I think I will use this question as the topic for my next youtube video.  I am ReiJarrod on YT.  I don't think I can post links on here, but could be wrong.

     Merry Christmas!

    Jarrod

    0Reply
  • Mason WeissBusiness Member
    Realtor · Phoenix, AZ · Member since 2021 · 523 posts · 239 votes
    1y

    Congrats on the wins @Jarrod Ochsenbein! I do a meetup in Mesa and would love to have you share your success story with others trying to do the same sometime!

    [email protected]480-818-7745
    0Reply
  • Jarrod Ochsenbein
    OP
    Rental Property Investor · Oregon/Arizona · Member since 2023 · 124 posts · 79 votes
    1y
    Quote from @Mason Weiss:

    Congrats on the wins @Jarrod Ochsenbein! I do a meetup in Mesa and would love to have you share your success story with others trying to do the same sometime!


    I would love to. I will be down soon if the inspection goes well today, which it should be perfect given it was a full gut remodel.  

    0Reply
  • Nick Caravaggio
    Contractor · city of vaughan, ontario · Member since 2011 · 14 posts · 1 vote
    1y

    hi Jarrod, congrats on the 4th purchase! I really feel this is helping people find affordable rentals. do you acquire these properties off the MLS ?

    do you add bathrooms and convert the garage to rooms as well? do you have issues with the city if there are cars parked on the street or lawn?

    once again thanks for sharing your success.

    Best 

    Nick Caravaggio

    0Reply
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