All Forum Posts by: Dan Maciejewski

What I know is that a second home requires you to live in it at least 14 days out of the year.  I have had lenders say that there are advertising restrictions, and others say there aren't.  Some, like @Tammy Bjorge above, say there are no restriction on Property Management, but there is a limit to how long you can rent it for.  Basically, nobody is on the same page!

At the end of the day, you'll have to talk to your lender(s) to see what they offer.  And read the terms yourself.  There are investment loans that go down to 15% down payments right now, so, depending on your cash, the question may be moot.

Or, you may be able to just get a non-conforming loan from a direct lender and ignore Freddie/Fannie requirements!

I always advise to come visit an area so you can have a feel for what it looks like in reality.  A lot of people change their minds about areas that look goon online and on the spreadsheet.  Simple things like the construction type or grocery stores can turn people off. 

Are you planning to buy a home to rent to your friends, or to use them a a base to scout for investments?  Long term leases aren't looking as good as they did a few years ago, but it always depends on your goals.  I have plenty of clients that are mainly looking for tax advantages, so they don't care as much about cash flow as others might.

Both Hillsborough and Pinellas have a lot of established areas that are good and up and coming areas that should pop in the next few years, depending on your risk-tolerance!  

As far as doing it long-distance, most of my clients this past year or two have done it.  You'll just need to find someone with expertise in the type of investment you want, then trust them to do a lot of the legwork.   

 You're welcome.

You can't tell the difference, unless you know the buyers.

To be honest, there isn't a difference -- retail buyers are retail buyers.  You can run the same numbers -- you should be able to estimate rents and expenses, you can can see what cap rates they "would" be selling for.  That can inform your clients as to the opportunities at retail.

You can ignore the assessed value, so you should be running a CMA on everything you look at that you think is interesting.

For your original questions, no negotiation with the lender; the final judgement amount is final.  The person judged against should have tried to negotiate that.

And you can mail, call, and/or doorknock to try to help.  You will probably need to build a relationship -- people don't just trust someone that cold-approached them.

And in my experience, people that are being foreclosed on have other issues in their life.  Happy, successful people pay their mortgage.  They will need more than just, I'll buy your house under market value and pay off your judgement.  They will be out of work, have some medical emergency, be supporting a family member, etc. . .The problems to solve will inevitably be more than just real estate.

The easiest way to check Cap rates or ROI is to see what people are buying right now.

Costs and rents are fairly consistent in an area, so you know the NOI (after some research). Then you just divide the NOI by the purchase prices (in most areas, this is public record). This will give you a cap rate for the property. Do it for all properties of whatever asset class you are looking at and you will start to see a trend. That's the prevailing rate of return that investors in your area are accepting.

The more you know about the properties, the easier this will be. I track all listings of my preferred asset classes, give them a quick once-over to see if there's any surprises (updated last year, hasn't been updated in 20+ years, making sure rents are at or near market rates, etc. . . ), and see when they close and what price, seller concessions, repairs that were done during contract phase.  Basically know your market.  I drive mine, so I see when roofs are replaced, termite tents go up, sometimes see electrician vans in the driveways, stuff like that.

If you're wholesaling, I would expect you to give me a cap rate of around 6% as-is in my market.  Retail is selling around 4%, so if you're giving me that, I could just shop on the open market.  

Call the city -- from what I have heard, kids don't count in occupancy per bedroom, but the city will know their rules better.  Some have square foot limits, etc. .  .

In this market, I would be surprised if even 10% of pre-foreclosures are underwater.  The last I checked, it was 5% of people in forbearance, and not many of them were in pre-foreclosure.  I guess if the owners/occupants are destroying it like they were during the crash, then the value would be significantly affected.

How are you valuing the properties?

It's definitely doable.  I have a lot of clients that are doing very well with vacation rentals / AirBNB / short term rentals.

You do want to have an idea of your vision of what you want your place to look like and your ideal guests.  Then you can choose a manager that shares that.  Or you communicate it to an experienced agent (one that deals with short term rentals) and they can guide you a bit.

Doing anything long-distance is riskier than in your backyard. There's less opportunity for you to experience your property and fix things before they become issues. And that could even be things like the landscaping needs to be better on the east side, to the A/C drips a bit when the humidity is high. But, a good manager get good reviews and the guests should feel more free to talk to them and share their experiences. Guest Satisfaction Scores are a very important metric to track in a STR.

A good manager will have good cleaners, too.  Cleanliness is second only to location.  If you look at negative reviews, almost all of them will mention cleanliness in some form.  If you self-manage, you will need to find great cleaners, and I would be my own inspector until I trust their inspectors.

I am in a very transient / tourist-driven market here in Pinellas / Tampa Bay and my partner has been in hotel management for decades, so we can tell you all about how guests think and what they expect.  Cleanliness is number 1 once they are in the property!

That's basically all I've been selling on the buyer side this past year.  Always willing to discuss strategies and what the current market looks like!

Q4 is available -- the stats are up to the minute; you just need someone with MLS access to run the reports.

You have a great point, BUT, the agents that are doing well, are doing pretty well.  And I know a few agents that sell 14 million in their 1st year.  I also know many many more that never sell more than 3 houses a year. 

You do need to commit and be a great, knowledgeable agent to do well.  Everyone assumes they will get houses thrown at them to sell once they (finally) pass the 100 question multiple choice test.  That's not the case.  But you can do very very well if you understand that this is a sales job, and act accordingly.

And yes, most agents are not eating off their real estate sales!  The scary part is they don't need to, so they act like they don't need to.  I've seen too many bartenders tell people that real estate is their "side hustle."  When I was recruiting I scared more people away than I recruited!