All Forum Posts by: Curt Neider

@Joyce Martin

Grab 3-5 quotes on each as mentioned. Heck, grab 10 on each of it helps drive the cost down. Splitting to separate meters can cost an arm and a leg if you aren’t careful.

I paid $35k to have the electrical meters split up on a commercial condo conversion I did one time. I’ve always wished I would have just been persistent and kept looking around.

@Anthony Barone

Following...

@Richard Audet

It varies depending on the lender and product. Often, the more info you have will help tell your story and may be able to help get you better terms in some situations.

Reach out and ask for the requirements. Then treat it like a sales pitch and provide what is asked and more.

@Jordan bowley

@Nick Barlow

Why not just do a max cash out loan on the first and roll the equity in cash into the next property? On both of those size properties there are a lot of 30 year fixed products that can combine to do what you are trying to do.

@Jordan Bowley

Portfolio loans are pretty typical. Rather than wasting time running all over town for meetings with lenders that spend 95% of their time doing auto loans and heloc’s, pick the right lender for you for the long term and build a plan for future properties at the same time.

Also some non-attorney brainstorming for you. You can still use a single purpose LLC for each property and do the structure you are trying. Just have your regional LLC own each SPE. In the same way that you are personally protected through that structure, so is the regional LLC which can be used to guarantee each loan or a portfolio loan.

The good news is you have equity to work with!

@Erin Spradlin

A huge factor is the property style/value/area that you choose to invest in. I also think a big hidden factor is who the landlord is personally. It isn’t for everyone and some people create their own problems for themselves. I’ve had a few pretty bad tenants over the years and the biggest benefit for me was my attitude about them and the situation. Kind of customer service attitude?

If you hate fielding texts or calls at random times about little issues, hire a property management company. It doesn’t change all of the benefits of owning real estate.

Good post Erin. I bet you and yours are good landlords based on your experiences.

@Johnny Lau

The main issue in my mind is the law of diminishing returns. (Maybe the wrong name? Law of large numbers? I didn’t audit this thesis.)

When you are starting out, you have less money and more ability to focus on a project. If you are BRRR'ing correctly and can get all of your initial cash out of each deal, hypothetically your ROI on each deal goes to infinity. As you continue to grow, at some point cash is no longer your issue but where to find good deals, managing rehab, etc.

I’d like to hear if I am wrong, but you will never get the same type of returns?

I'd also like to chime in that you can own as many SFR rentals as you want. 10 is a limit relating to conventional loans so you just have to switch lending partners/strategies at some point.

@Jingru Sui

I can personally see a lot of benefits to being on both sides of these deals. In either case, it comes down to doing a good job at what you do.

STR arbitrage doesn't have any of the appreciation, tax benefits, etc. that comes from ownership but it also doesn't come with the initial financing investment or rehab. There are a lot of people on here that don't have an appetite or respect it, but everyday property management firms fall into the same scenario.

As an owner of rentals, it would come down to who the management partner is. I personally like the idea of having my units professionally cleaned and inspected multiple times a month (if not weekly.) All of the wear and tear items I saw in the thread are no different than those found in long term rentals at move out time.

I think there is a market for what you are looking for and it's no different than a developer bringing in a hotel management company or apartment leasing team to run a property. I can also think of advantages like not having franchise fees, national branding issues, rent escalations can be built in to long terms leases more easily since the lessee is a professional, your property is faster and more quickly to adapt to which STR platform is working at any given moment, the lessee is more likely to be financially capable of paying for damage to the unit, etc.

I think if you got to a high enough unit portfolio, developers would entertain the idea of having you run entire properties or even doing build to suit with you as a partner. A comparison would be condo projects that slowly transition into time share properties and then into hotels.

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I didn’t realize I had so much to say! Good luck! I’m glad as a community we worked through the initial negativity.

@Michael Lowe

They just don’t understand. It’s as simple as that.