All Forum Posts by: Duane Richards

@Bill B. makes some good points - if I were warranty-ing my own purchase, I could likely live for a few days without A/C etc. while the warranty takes care of business. But with renters, particularly STR (they're only in the home for 3 - 14 days, and a warranty claim will likely never be resolved in that time window), you have to act quickly.

@Brad Jacobson I just had my first experience with a home warranty, and it's on a STR in Florida we purchased back in August. My PM is great, but it's really hard for him to coordinate repairs (we've had two calls on a refrigerator) and times with guest stays. The HWA (Home Warranties of America) warranty covers a lot, but I pay $100 each time I want a technician out. Once paid for, the repair labor, part, etc. are all billed to HWA, so that is nice. However, we only get to work with their preferred vendors, and the current one we are dealing with out there is OK, but very difficult to communicate with.

The example here - our large french-door refrigerator keeps tripping the breaker, so the guests have to go flip it back on or their food spoils. The strange thing is, it doesn't trip all the time, so the repairman said it needed a new compressor. They replaced it once, but the breaker kept tripping. I had a larger breaker installed (it seemed small to me to run a large appliance like that), but that didn't help either. Calling HWA, I wanted them to pay for a replacement fridge, but they needed a written explanation from the service provider. The service provider said they repaired the appliance and all is good, even though I told them the breaker is still tripping.

Well, to make sure our guests still have good food to come home to, we bought a new fridge (I can't get HWA to pay for it), and we are still trying to fix the old one, now out in the garage. But following a second $100 call (two separate incidents according to them), they are replacing the compressor again, which I am guessing won't solve the problem. Either way, I'm glad I haven't had to pay for the parts or the repair, but you can see the difficulty here. Ours is an unusual scenario, and I keep hoping the A/C unit will go out before our warranty expires so I can get a cheap replacement :).

Hope this helps!

Hi @Chase Kunz, we currently have 6 units in Utah County, all LTRs that we manage ourselves, but we also own a STR home in Florida (it was a jump into a new market) fully under PM. I know from the amount of red tape with cities, especially ours in Cedar Hills, they have certain restrictions on STRs, along with any HOAs, if you are part of one, so just make sure you won't get "caught" in a situation that may become untenable. However, there is definitely potential for greater cash flow from STR, if you can manage it well or find good PMs that will remove the day-to-day hassle for you.

Would be glad to discuss our experiences in FL, I know it's a different market there, but dealing with PM interviews, supplying and furnishing, HOA, etc. has been a very learning experience.

Hi @Kimberly Kelly, welcome to Bigger Pockets! My wife and I are pretty new to the investing scene, but have gone in head-first, if you know what I mean. After acquiring our first property in April 2020 right during the COVID quarantine, we went a little crazy. Since then, we have helped my son get into a condo he owns and rents out by room while living there and going to school. We also have helped our sister-in-law figure out how to house hack a new home in Utah County and finish her basement to offset her mortgage payment. I honestly think your house hack option is a good one, but I wonder if you're passing profits for the rental to your partner, I assume the only benefit for you is the added investment capital? 

We've never really done a partnership more than co-signing with my son, but we've been talking to a lot of people and would be glad to share what we've learned. Feel free to reach out with any questions!

Hi @Shawn Green , I'm a long-term rental investor currently and am now looking to move into a STR market, also in Kissimmee/Orlando, primarily because we love vacationing there and want to have a unit that we could leverage for our family as well. Just curious if you've had any luck?

@Serena Kim I'd be interested in touching base with you about your property management strategy out there, as we have systems in place for our SFH rentals (long term) and self-manage them all. But remote management seems a bit more tricky, especially with higher turnover for STR. I've looked into Evolve Management (evolve.com) and they seem pretty good for a 10% fee, but I'd want to do more research on them and other PM organizations before fully committing to one.

I've been told that financing condos out there can be difficult (condo vs fee simple), and I do see that some listings have only "cash" terms listed, but there are a few at least that claim conventional is an option. Is anyone familiar with the restrictions? I believe they are likely imposed by Freddie/Fannie due to the large % of investment units vs non in each development. If conventional isn't available, and we don't quite have the $$, are there other options for financing?

Also looking for a good real estate agent willing to help us explore the market. I know things are crazy down there, but a few of the questions I have are difficult to find the answers on my own.

Thanks!

Hi @Julia Preciado, I'm a long-term rental investor currently and am now looking to move into a STR market, also in Kissimmee/Orlando, primarily because we love vacationing there and want to have a unit that we could leverage for our family as well. Just curious if you've had any luck?

@Valentina Naumenko I'd be interested in touching base with you about your property management strategy out there, particularly as we are investigating neighborhoods and types of units that fit our budget and are known to us from our various trips there. 

I've been told that financing condos out there can be difficult (condo vs fee simple), and I do see that some listings have only "cash" terms listed, but there are a few at least that claim conventional is an option. Is anyone familiar with the restrictions? I believe they are likely imposed by Freddie/Fannie due to the large % of investment units vs non in each development. If conventional isn't available, and we don't quite have the $$, are there other options for financing? 

Also looking for a good real estate agent willing to help us explore the market. I know things are crazy down there, but a few of the questions I have are difficult to find the answers on my own.

Thanks! 

@Tupu Folau, I'd love to touch base with you on Utah County investing. We just closed on our 6th property here and they are all cash flowing very well. I've seen deals come through the MLS that I can't act on due to my capital now being tied up in other places, but I continue to look and see how I might be able to fund "just one more deal!" Just today, a duplex came up in American Fork that should cash flow at least $600/mo if your rate is good enough. The trick is coming up with the 25% down :).

My wife and I are also looking out of state and have seen some really good deals in Jacksonville, Fl, and are working with a good RE team there who also has a good PM group we like, if you're interested.

Feel free to ask any questions, or reach out to me directly. Good luck on your journey!

Thanks, @Dan Rowley. I was contacted by FIG with some openings for a few of their investments a little while ago, but I was not in a position to capitalize on them. I'm following them hoping to get an alignment on opportunity + capital :).

I'll definitely let you know what I find in the local markets!

@Dan Rowley, just curious, how have you found your cash flow per unit? Based on their pro-formas and proposed downpayment, rate, etc. it seems we get about $200 per unit, which is a decent target. Unfortunately, it also means we invest and carry a construction loan for a bit of time (12 months or so, opportunity cost for other investments). We've been getting around $300-500 per SFH we've been purchasing, so the large downpayment and longer carry time before returns so we haven't jumped yet. I still follow their projects and get their email updates regularly :).

Would be really interested to pick your brain about your experience with them.

Hi @Angelika Roerig - welcome to Utah! My wife and I are new investors that got started about a year ago from a conversation with a couple of friends. We closed on four units this year in the height of COVID - opting for new construction to begin, in neighborhoods we knew well, after researching rents and knowing we could cash flow in those markets. 

Our next step at this point is unknown for us, as new construction drains your capital very quickly. We continue to see deals coming up that would work (largely because of the amazing interest rates and increasing rents in specific neighborhoods), but may have to wait for our current investments to appreciate enough for a refi. 

We're very interested in the BRRRR method, as entry is much lower, but we don't have the contractor experience or contacts for that kind of investment. It sounds like that would be a method you could excel at. I think making contacts with like-minded folks here on BP, and heading to the Utah REIA will help get your husband some contacts, and give him a chance to spread the word about his skills.

Good luck, and feel free to reach out any time!