All Forum Posts by: Dominic Mazzarella

A young member of my family asked me how to start his real estate career and, unsurprisingly, I suggested that he started by house hacking. For him, it would mean renting the spare bedroom of his 2-bed condo short term. He later asked some good questions about the cleaning and I couldn't answer since I've never house hacked myself so I'm asking here for him.

He's very busy so he needs to get the cleaning done professionally. So:
- When a guest leaves, does he need to just get his spare bedroom and bathroom cleaned or his whole condo?
- Can he charge the guest the cost of the cleaning of the full condo or should he charge much less just for the bedroom and the bathroom?
- If he could charge the full cost, he could get his whole condo cleaned often and have the cleaning paid by the guest but that could be prohibitive for the guest who'd only pay for a room rental, especially if the stay is very short.
- If he can only charge part the cleaning cost for the spare bedroom and bathroom, does he need to clean the rest of his condo at his own cost every time there is a turnover, considering that, at the extreme, there could be a turnover on a daily basis? Or does a guest expect that his bedroom and the bathroom will be spotless clean but don't expect that the rest of the condo is 100% spotless clean at all times given that my family member lives there?
- If, at times, it makes sense to only get the spare bedroom and bathroom cleaned, can he find a cleaner/company to do that, as it might not be worth it for the cleaner to travel for such a small job?

Thank you!

If he’s only renting out the spare bedroom and bath, I’d say just clean those areas between guests unless the rest of the condo is used or shared. Most guests won’t expect the entire condo to be spotless if it’s not part of their stay. As for the cleaning fee, he can charge what it costs to clean the areas the guest used. Charging for the whole condo might seem excessive unless it’s getting cleaned too. And yeah, sometimes it’s tough to find a cleaner willing to come out just for one room, so he might have to pay a premium or coordinate with someone local who’s flexible.

1 Vote

Quote from @Jacob Krum:

Hi a few months ago my sister and I found a private lender who gave us a 5% interest rate granted we put 30% down on the property and pay it off in 7 years. We fixed it up some and now I estimate we have about 40% equity. With the current loan terms we are cash flowing -120 each month due to the 7 year pay off period. Should we refinance or push through given the good interest rate? My sister and I both have good full time jobs and can support. However, I'd like to find another deal. Would it be a bad idea to refinance and put that money to the next deal which we would BRRRR? I told the private lender of my idea to refinance and pay him back immediately and then take out a new loan with him for the next deal. However his response was for us to just keep this existing loan and put our refi money to the next deal. What are your thoughts, is one option better than the other? Thank you in advance!

If you're comfortable with the monthly cash flow hit and your goal is to scale, pulling that equity out and putting it into a BRRRR deal might make a lot of sense, especially if you're confident you can force appreciation and refi again later. The lender's suggestion to keep the existing loan and just use your refi money on the next deal isn't a bad idea either, since it preserves a good rate and avoids a reset. Really just comes down to your risk tolerance and how aggressively you want to grow.

1 Vote

Newark, New Jersey

Quote from @William Peacock:

Where can I find the data for vacancy Rate in my area. I invest in the Phoenix AZ metro area.

For vacancy rate data in Phoenix, you might want to check out Census.gov (specifically the Housing Vacancies and Homeownership report), or sites like HUD's data sets or even the U.S. Postal Service's vacancy data. CoStar, Yardi Matrix, and some local MLS systems also track this stuff, though they usually cost money or require access. You can also call a few local property managers. Hope this helps.

0 Votes

Phoenix, Arizona

Quote from @Jay Scott:

I am working with an owner who is behind on his mortgage. He does not want to sell for at least another 2-3 years. He owes approximately $2.2 MM, which includes his back payments. ARV is $3.4 MM - $3.6 MM conservatively. Primary residence. Property needs some updating, but otherwise minimal work required. Hot neighborhood. Located in Miami. He and his wife went through some health issues, but he is getting his business back on track now. He wants to refi, but can't due to credit being in low 500's. In addition to being an Investor, I also work for a Private Lending Company that does extremely creative funding deals. We recently rejected this only because the underwriter wanted to see more equity. If he wanted to sell, this would be easy. I would do it myself. He is very firm on not selling right now. I am thinking maybe a Loan Mod? I took the last 5 years off from Real Estate, and am just getting back in, so I am still familiarizing myself with the current market. Anyway, I welcome ideas. Thanks!

If he’s set on not selling, maybe explore a subject-to deal or some kind of shared appreciation loan where you help bring him current and structure a payoff or equity share when he sells down the road. If he’s got strong equity and is just short on credit, there might be a creative solution there that doesn’t feel like a sale to him.

1 Vote

Quote from @Hayley Chan:

I'm looking to purchase an RV that my family will use some of the time but MOST of the time we will have it listed on AirBNB. As far as Assets I'm wondering which is better overall for liability, income tax purposes, and write-offs:

a) own the RV personally and rent it out to a separate LLC that I create, which then the LLC uses the RV to host AirBNB stays

b) purchase the RV as an LLC asset and rent it out via AirBNB from there

If you're planning to rent it out most of the time, I'd lean toward having the RV owned by the LLC from the start. Keeps the liability separate, and it makes things cleaner for taxes and write-offs. If you use it personally now and then, just track it carefully and account for the personal use. Option A feels a little overcomplicated unless you've got a specific reason for that setup. Probably worth checking with a CPA either way, but I'd keep it simple and just run it through the LLC.

1 Vote

Denton, Texas

Quote from @Evan Thomas Andriola:

This past week, I closed on my very first property! It feels good to be off and running after being on the sidelines for so long....I have a lot to learn because this journey is clearly just getting started, however it feels good to be on the board.

For those curious, the property is a duplex in 44102, 3/1 in each unit.

Im still looking to connect with more Cleveland investors so feel free to message me (especially fellow 44102 owners!)

Congratulations Evan! This will be something you remember for the rest of your life. Good luck on your next deal.

0 Votes

Cleveland, Ohio

Quote from @Devin James:

Quote from @Dominic Mazzarella:

Quote from @Devin James:

In Q1 of 2022, when interest rates were rising, our future primary residence came on the market.

The seller wanted cash or seller financing at 4.5% interest, but we couldn’t pay cash.

I realized that to win the deal, we needed to make it more attractive to him.

So I offered 5% interest—which, at the time, felt crazy because just 4 months earlier, rates were around 3%.

But the deal still worked well long-term, and after talking with the seller, it became clear that he actually preferred financing over cash.

Deal-making is about structuring terms that make sense for both sides.

Would you have done the same?

Being creative can take you so far in this space. Good move. And yes I would do the same. Worst case scenario you might overpay in financing for a bit but there's always the chance to sell or refi in the near future. I say this without knowing all the details of your deal. I'm assuming it's a good one and worth the trouble.

Exactly , looking back the 5% isnt so bad haha

Oh in hindsight it was a fantastic move for sure!

1 Vote

Quote from @Varun Chawla:

The insurance is very cheap at 10-15 a month and says it covers up till 10k. Although, I am concerned this may be one of those things that never pays out, so wanted to see what other people who have used it have to say about it

Interesting. 10k will only go so far if it's a private system for certain property types. And I get your concern about them never paying. Definitely read the fine print.

1 Vote

Kansas City, Missouri

Quote from @Michael Lipsey:

Hey everyone!

I was curious if there was anyone in the local area that has any experience with storage unit investing? I am eager to find my first deal and get started. There are a few on market deals right now.

Do you want a local deal because you want to be close by to do the management yourself? If not, I'd say just look for a good deal further from you. There could be some homeruns in another state or other TX city that beat your local plays.

But I definitely understand if you want to do the management yourself to save money. I've owned self-storage and it's a great business to get into.

0 Votes

Austin, Texas

Quote from @Devin James:

In Q1 of 2022, when interest rates were rising, our future primary residence came on the market.

The seller wanted cash or seller financing at 4.5% interest, but we couldn’t pay cash.

I realized that to win the deal, we needed to make it more attractive to him.

So I offered 5% interest—which, at the time, felt crazy because just 4 months earlier, rates were around 3%.

But the deal still worked well long-term, and after talking with the seller, it became clear that he actually preferred financing over cash.

Deal-making is about structuring terms that make sense for both sides.

Would you have done the same?

2 Votes

All Forum Posts by: Dominic Mazzarella

Dominic Mazzarella has started 7 posts and replied 262 times.

Post: How to organize and charge for the cleaning when renting a spare bedroom short term?

Post: How to get to the next property

Post: Vacancy Rate for SF

Post: Interesting Deal. Feedback Welcome!

Post: LLC or self-owned AirBNB RV trailer?

Post: Closed on my first deal!

Post: I Negotiated to Pay a Higher Interest Rate on My Home

Post: Question About Sewer Line Insurance – Worth It?

Post: Storage Unit Investments

Post: I Negotiated to Pay a Higher Interest Rate on My Home