All Forum Posts by: Ernesto Hernandez

You can pull historical rental data through Zillow Data. I wanna say it goes back 15-20 years down to the Zip Code or City, whichever you prefer.

I see where you're going with this but the number of PM firms is irrelevant in my opinion. You're probably chasing the number of homes under property management as a ratio of single family homes + apartment units. 

i will say there is definitely a labor shortage which is causing prices to rise as it relates to repairs of any kind but that too is subjective. I invest there myself and in conversing with PM's, they too state that the good people have never been busier and frankly don't need to compete for much work. You could pull the number of licenses and hope you have access to historical data to confirm there are in fact fewer of them though that may not be available. 

Maybe an agency like Angie's List has a database of market rates which could also point to a somewhat linear increase in the cost of labor as well. 

I'm no realtor, but since I have a minute ...

1. Do not try and sell them yourself, hire a pro. A good realtor with a strong presence in the community with a proven track record of moving homes in your neighborhood is who you need to be paying.

2. Pictures are dark.

3. What are the comparables going for?

4. The market dictates what your home is worth. Maybe go lower than. You want to attract offers, take the most qualified one and see if they'll come "up" to your number. 

Love it. 

What's your cash out refi strategy?

Great job. 

It's entertaining to see so many people come in and assume so many variables about Airbnb.

Noiseaware is a decibel meter you can use to detect and squash noise if it exceeds your pre set boundaries. Great way to put your LTR tenants at ease. 

There's another service that isn't coming to memory that detects cigarette and marijuana smoke. Another great selling point for your LTR.

STR guests don't have tenant rights. You can get rid of them the night of IF they cause any trouble.

Several nights a month the unit will be vacant. Good for the LTR guest as well 

Smartbnb uses AI to auto respond to messages guests may have. Not as time consuming as a newbie to Star's would imagine. 

Not all cities tax Airbnb yet. Detroit may, I'm not sure. That costs is paid by the guest anyway. 

If STR is plan A and you can still cash flow with am LTR as plan B, it's a fantastic strategy.

You can pay about $5-$10 for a set of comps and arrive at your own conclusion. 

About $30 for a desktop opinion by a realtor/broker.

About $250-$300 for an appraisal/BPO which involve physically driving and sometimes entering properties.

Market rate for completely hands off, no energy in the deal private money is about 8%-12%. 

If you are willing to riskier and assume some of the upside or downside, then you could restructure and get creative. 

But if all you're doing is lending and trusting, the aforementioned range is what I see.

I'm surprised by the lack of assistance you're getting.

I would specifically seek the advice of active investors in the area you are targeting. Remember that most people on BP don't actually invest. Was it 99% that don't? Real number. 

So while opinions are all fine and good, I would specifically track down good and bad experiences from people who are actually doing it. 

The barrier to entry is much higher in parts of the U.S. and raising money isn't going to help your returns. Good luck trying to cash flow in the Bay Area on anything under a quad plex. 

Learning to invest and doing so in Real Estate is good. Don't let negative, unhelpful advice deter you. Imperfect action is still better than no action.

I live in San Francisco and invest in Indianapolis. I actively network with other folks who are actually active there and am able to leverage their mistakes and nuggets of sound advice and it's been immensely helpft. 

I'd be happy to help with any question you may have. Shoot me a PM. 

What rates and terms were you hoping to find?

I'm 3 BRRRR's and want to be as helpful as possible.

Before you do anything, get pre qualified by your cash out Refi lender and define YOUR criteria. There's BRRRR'S that you can't recoup all your cash in but will cash flow well. Some you'll get all your cash out but won't cash flow much. Some are a little of both. Get CLEAR on what you want. If you told me you wanted a BRRRRable property I'd still have to clarify exactly what type.

1. Find a buyer's agent. 

Sure, or wholesaler.

2. Find a home. (70% or less than ARV)

Not necessarily. The existing ARV delta is irrelevant if you don't know your rehab cost.

3. Review comps and make sure ARV is accurate.

Don't run your own comps. I don't care what guide you see online. You can't run accurate comps without MLS access. Leverage your agent, by a CMA or a BPO/Full Appraisal if you want to be extra certain.

4. Make an offer to purchase with inspection contingencies.

Never buy anything without an inspection. 

5. Once accepted, have inspector and contractor evaluate property.

Once under contract or committed via EMD, then inspect and get rehab bid.

6. If rehab is within budget (rehab+purchase price=70% of ARV) make an offer.

7. If rehab is NOT within budget, change offer to whatever makes the numbers make sense in above equation.

You will have a PM so make sure your PM is a broker and they can also give you their thoughts on comps. 

I would also advise that you find a rehabber as soon as possible. This labor market is tight and finding reliable, coherent rehabbers is harder than you would imagine. See if you can find a PM who can handle rehab and find out what their markup is. It ranges from 0%-20%. For rent ready turns you probably don't need a GC. GC's are needed for flips but in many cases not for BRRRR'S. A handyman may be able to execute the updates as well. GC's come at a premium.

An easy way to pre screen rehabbers is to ensure they are licensed and insured and get their cost per square foot on paint and flooring. When you speak to 5, you'll already have a feel for their pricing. If they don't know this number, they probably haven't been doing this long enough.

My single biggest piece of advice is: Model.

Find someone already doing what you are and earn their mentorship at all costs. Add value, bribe, carry their golf clubs. You're first time in the cave, find someone who already knows their way around in the dark. 

David's book is awesome but I also suggest J Scott's rehab book. If you don't learn to speak the rehab language, you will be a deer in the proverbial headlights when you review a bid. 

Good luck.