All Forum Posts by: Scott E.

Mortgage rates have been adjusting downward since ~Oct-Nov of last year. Sure the federal funds rate is projected to rise a few more times, but that does not tell us what will happen with the 10 year treasury.

Ha! I love it. Thanks for sharing. 

If those pumps are functional, you shouldn't have any concerns around flooding. Just make sure to get them tested and inspected.

Regarding the remodel, 1-2 months sounds very optimistic. In my market, a remodel as extensive as you are describing would take 6-7 months. And that is not including the time it takes to get drawings, engineering, and permits (Not saying a permit is necessary for the work you're doing. But if so, that adds months to the timeline).

I'd get a couple more opinions on remodel. Bring out a few general contractors and have them give you a rough budget and timeline. After you get 3 opinions you'll have a better idea on what to expect.

In most markets short term rental supply is high. And a big issue is that a good amount of the supply is from new 'investors' chasing what they thought was a get-rich-quick scheme. So the market not only has an unbalanced supply and demand, but there is also a heavy supply of mediocre properties, set up by new investors.

A flood of mediocre short term rental properties on the market not only creates an unbalanced supply and demand, but it's creating another problem. Guests are getting over airbnb and opting to stay in hotels again. I've seen several reports on this, and I personally have chosen to stay in hotels on my past couple of vacations. If you have just 1 or 2 bad experiences in an Airbnb, it's only natural to consider staying in a hotel on your next trip.

The downsides to Airbnb for guests:

-The nightly rate is comparable to a hotels nightly rate

-Airbnb often charges a bunch of fees that drives the price up even more

-The cleanliness, quality, furniture condition, smells, etc is inconsistent from one home to the next

-As a guest you're stuck with a long list of chores to do when you check out

-A lot of neighborhood residents across the country have voiced criticism of short term rentals. So as a guest you sometimes feel like you are "walking on eggshells" in an effort to not upset the neighbors around your property.

Hotels on the other hand have great quality control, you get room service, there's usually a bar/restaurant on site, etc. Makes me wonder if over the next ~5 years we will see a shift back to hotels which are a much more controlled environment for guests.

Full disclosure, I have 3 flips I'm working on right now and I very well may be forced to convert them to short term rentals when I finish the remodels (in the event I cannot sell). So this is not an anti-airbnb post. I'm just curious about others perspectives on the topic.

I don't think I understand the question. No savvy investor or developer will pay above market value for a deal (Unless it's a sub-to investor, but that's a completely different conversation)

I'm just saying don't use the 70% rule because no local luxury flipper or developer is going to have ever heard of the 70% rule. That is just an arbitrary rule made up here on the forums to help new investors get a general idea on how to run numbers.

Instead, if you were presenting a wholesale deal to them, either present a full underwrite of the deal. Or let them underwrite the deal themselves and decide if it makes sense.

To find the luxury buyers, just call up luxury agents in the area. They all have cash buyers that they work with and will be happy to connect the dots if you have a good deal under contract.

And as far as running the numbers, ignore any of these "rules" like the 70% rule. Luxury developers are sophisticated. They can fully underwrite a big deal in 10 minutes. So if you use '70% rule' language that's going to go in one ear and out the other.

Good advice! Unfortunately in my market the only reasonable backup plan to a house flip is convert the house into a short term rental (long term rental numbers just don't pencil out). 

It's hard to stomach the thought of doing a beautiful remodel, only to have a bunch of short term tenants go in there and slowly trash the place. But it's better than selling for a loss.

Most investors out there go as minimal as possible on landscaping (at least out here in AZ). They throw a bunch of rock down and call it a day. Just look at a few flips for sale or recently renovated rentals and you'll see the trend.

I on the other hand always go nuts with landscaping. In a place like Scottsdale, or in San Diego, people generally spend a lot of time outside. So I like build in as many things to do outside as possible, and make it look nice. Just a few examples:

-Covered patio

-Pavers vs bare concrete

-Swimming pool

-Hot tub

-Gas fire pit

-Raised garden beds

-Putting green

-Dart board

-Artificial turf (with corn hole)

-BBQ

-Umbrellas

-Ample seating

This is my long winded way of saying, you are not over doing this. Make it nice, and your listing will stand out amongst the competition. Just also be sure to make it as low maintenance as possible.

Based on this list, Barbara is a no brainer to me for a BP event.

 -Alex Hormozi: Rock start marketer but he has zero do to with real estate. Not a good fit.

 -Elon Musk: Genius and visionary and  but dull personality and has zero to do with real estate. Not a good fit.

-Barbara Corcoran: Real estate mogul who got started in real estate and now runs a $5 billion dollar real estate business. Plus she has a nice personality and great stage presence.

 -Tarek and Heather El Moussa: TV house flipper and TV real estate agent (and to be fair I'm a fan of 'Flip or Flop' and 'Selling Sunset'). Probably cool people but I don't think they will add as much value as the other candidates on this list.

-Gary Vee: He has nothing to do with real estate. All he will do is drop F bombs and scream at the audience to post more content on their social media. Not a good fit. 

-Mark Cuban: Probably the most well rounded entrepreneur on the list. Also very well spoke with great stage presence. But again he has nothing to do with real estate.

Says who? Rates are literally dropping as we speak. They are currently at an 18 week low.