All Forum Posts by: Anthony McEvoy

@Kristina Kuba Safe? I have never seen that suggested. Is that for in the rental property? If so, any suggestions on what would be great for this type of use? I have seen them in hotels... I just never paid attention to brand names.

@Nathan Buck - Is it furnished?  Have you set up the accounts where it will be listed (i.e. Airbnb, VRBO, etc)?

@Robert McCormick - I wouldn't overthink it... assuming you didn't travel a significant number of miles out of the way.  If you really want it to be that exact, then take your trip there and double it.

When I tracked mileage, I used a spreadsheet and it eliminated what you are asking.

@Nick Morgan - I obviously can't prove the numbers but you are looking at it correctly.  The risk/reward is not something I would be interested in.  1% for maintenance and reserve is low.  Think about what something costs to replace it... for instance, a hot water heater or any of the kitchen appliances or bathroom fixtures.  Not to mention more expense items such as a roof or HVAC.  Depending on the revenue the property produces, I usually do not go any lower than 5% of the revenue.

There are reasons you may still wish to purchase but you should be aware of the risks.  Perhaps this property is in the path of progress and it will appreciate.  I personally do not play the appreciation game.  Alternatively, what opportunities exist for a short term rental?

@David C. - Tax-Free Wealth by Tom Wheelwright

@Tanner Woolley  Check out www.restmethods.com

@Tanner Woolley

There is lots of information and tools out there on short term rentals to help maximize the profits.  Everything from furnishings to ambiance to pricing structures.

@Ryan C.

Or pick a couple banks. It will help you understand who really has the best offer. From my experience, smaller financial institutions are typically the most flexible. They may not want a larger down payment but may be interested in your cash reserves or where you would pull money from (HELOC, partner, another business, etc.) if you had a decent repair to tackle.

Don't forget there are other creative financing options that do not include a bank.

@Nikolas Engel - A value add expense is a capital expense (capex).  Capital expenses show up on the P&L as depreciation (an expense that is taken over multiple years).  It is not that the expense is non-recurring - you would hope that you don't have to continually fix holes in the wall.  It is the fact if the expense adds value or part of the day to day operating expense.

The Net Operating Income will be calculated on the Profit and Loss Statement.

Search and browse www.investopedia.com.  There is a lot of information that will help link these different concepts together.

@Jeremiah Struble

Profit/Loss Statement from the last 12 months (also known as the trailing 12), last year's P&L, and rent roll/occupancy with lease start/end dates.

Then ask what improvements have been done over the last five or ten years and what needs to be done in the next five years.

These are decent conversation starters if you can get all of the answers.  Hopefully, you can see if they are financial occupants vs physical occupants (non-payers), the turn over expenses, the maintenance the building requires based on the mechanicals, who is paying the utilities, etc.  I also use it to get an idea what insurance will cost.