All Forum Posts by: Max Householder

Take a look at Shelter Insurance. They will write a policy based on property value rather than cost to rebuild so you can see significant savings. For some of these older brick buildings the replacement cost would be astronomical and thus the premiums are quite high. There are pros and cons to going this route, but I'd rather be able to pay off my loan and walk away in the event of a total loss rather than pay the extra premium every single year for the ability to pay twice what the building is worth in order to rebuild it.

I use Eric Brand with Shelter and Bill Newhouse has been recommended to me as well.

We just closed on our 2nd property which includes a garage split into 4 storage units each with their own roll-up garage door on one end and steel door on the other. The previous owner had been renting them out separately, i.e. not to the apartment tenants. We would like to continue to do so for added income as here in St. Louis City, storage in these older properties is quite limited and there seems to be a solid demand for extra storage units. 

Does anyone have any experience renting units like this? I'm looking for tips, best practices, a lease/document you use, do you typically shoot for 6-12 month leases or just month to month from the start? Do you run a background or credit check or take a deposit?

Two of these units are leased but the tenants have not paid in 2-6 months so I am also looking for insight into storage unit tenant laws and how I go about evicting their stuff for non-payment? Any comments are welcome. Thanks BP!

I live and invest in St. Louis. The statistics can be misleading because the city proper is a separate political entity from the county and surrounding metro. Yes, on the whole the CITY population has been in decline since the 1950s, but many neighborhoods, especially in South City are seeing population growth (63116 for one) post-Great Financial Crisis and there is a lot of revitalization and investment taking place.

The city of St. Louis is only 60 square miles out of 360 sq. miles that makes up Greater St. Louis. The Greater St. Louis metro has seen steady population growth over the years, even if the stats on the city proper are much gloomier. Greater St. Louis

St. Louis County has been extremely stable/slowly growing for decades. The population in St. Charles County to the northwest has more than doubled in my lifetime. Jefferson County (south) and Franklin County (southwest) have seen steady growth for decades. Madison County IL has been had a steady population since the 1970s.

There is plenty of opportunity in St. Louis, you just need to drill down your target area, sometimes to a single street or a few blocks, more than in some markets that see growth/decline more broadly across a larger area.

I've read/listened a lot about MH parks and it definitely seems like a great investment for the reasons you outlined. As far as the limited supply, I think eventually cities will come back around to allowing MH or tiny home type communities because the demand is growing already and the shortage of affordable/starter housing will need to be addressed at some point in the near future. As far as St. Louis, I'm sure there are many parks "hiding in plain sight", but most I have noticed are on the outskirts of the metro area, like communities along I-70, I-55 or I-44. That might make management more difficult depending on where you live in STL.

Personally, I would avoid floodplains altogether. Most residential properties in the city are well out of FEMA flood zones except in places like this property that abut the River Des Peres which is the spillway for the city sewer system. There are so many other areas nearby that are at less risk of being re-drawn into a flood zone that it seems simpler to just avoid them altogether IMO. $800 per year is a big expense. Unless you're getting a screaming deal such that the extra $67/month won't put a dent in your return, I would just move on and look for another one.

I focus on south city nearer to "the hill" which is relatively high ground. If we ever get flooded out down here, the region will have much more serious issues than FEMA coming along to re-draw their boundaries!

A house-hack is a great way to start, especially when you're young and your life is more flexible!

Hey Brent, don't feel bad about not wanting to spend big bucks on a college degree when you don't know what you want to do yet. While you figure things out, live small and save money. A $10,000 savings account will open many more doors and opportunities for someone with an entrepreneur's mind than a student loan balance.

Check out ESI Money. His formula is based around Earn, Save, Invest. If you do those 3 things you're well on your way. Also check out the Wealthsteading Podcast. His first 10 episodes are a great foundation for how to look at investing for the long haul and becoming the millionaire next door, also based on principles of earn, save, invest. I also love Radical Personal Finance, especially his early episodes. Mr. Money Mustache is a great blog to read, especially this post: The Shockingly Simple Math Behind Early Retirement. Read as much as you can and listen to as many podcasts as you can.

I went to college and it was a lot of fun and I actually do (loosely) use my degree for my job, but these days I probably get a semester's worth of knowledge every month from listening to podcasts and reading books that interest me. It's never been easier or less expensive to learn than it is today. Eat up every ounce of free knowledge you can and then you'll know where to go when it comes time to spend a few hundred or a few thousand dollars on an online course or a certification or something to get over a short term hurdle, if you even need to.

Best of luck!

I second all the responses so far. Stay away from this area. South city is a good rental market for small multis and some older SFR. Affton/south county is a good place for SFR rentals. I've seen many people who say they do well with SFR rentals in parts of North and Central St. Louis County, but you really need to know which areas to target and stay away from. The local municipalities landlord laws can vary as well and make a big difference.

Probably best to find some boots on the ground to guide you. St. Louis is a very fractured market which means there are as many opportunities as there are landmines.

Look up @Chet Hileman with F&B Financial. His team is great to work with and they can definitely help you figure out your options and work with you on how to get approved if you're not there yet.

I can definitely see the allure of cheap properties in smaller town Missouri. There are definite advantages and disadvantages. Many small towns rely on few employers, so you're at risk of population (demand) drying up if jobs move away. However, you can probably scale quickly, at least in terms of # of units, and become a relatively big fish in a small pond if you can put the capital together or do enough BRRRRs. If you put out a good product and word goes around (as it does in small towns) that you're an A+ operator, I think you could have a reliable stream of renters.

Seems like the key would be to choose a small town with multiple employers and/or in the path of progress. Out where you are, O'Fallon and Wentzville etc. used to be one stoplight small towns and now they just grow and grow as you head west. Maybe look for towns in southern MO with similar characteristics that are close enough to the bigger towns down there like St. Gen or Desoto or close enough to Arnold/south St. Louis that people could commute.

Once you pick a city/town, then I think it would be a matter of sticking to your numbers so if you see zero or even negative appreciation, your cash flow will be so good that it won't matter over time. I definitely wouldn't want to get overleveraged in a small town because there would be almost no other buyers to bail you out if you had to firesale.