All Forum Posts by: Paige Kelsey

@Neal Collins I have six vacation rentals in Colorado Springs and have done what you are talking about there. I agree the money is great! I hired someone local who could do the boots on the ground and could handle all the stuff that can happen. ie the calls in the middle of the night from the guest "who saw a ghost" lol to the ones that have flooded the toilet. What I learned in the process is that this is NOT an ordinary management company.  I did this as the owner while I was there but now moved here to  Vancouver/ PDX  and hired it out. For the record, it is not what I do now but wouldn't mind doing this again- I actually love it!  Either way, hiring my boots on the ground I did learn a few things. 

- A traditional rental management company will not work. You need someone who can answer a guests concern right then. I had a bunch of management companies but when I called it would go to voicemail- the last thing you need is a bad review - Quite frankly, if you get a bad review..... You deserve it. Guests need a great stay! Make sure you get responsive and call them   

-You need someone ideally who has done this before. Since I wasn't there, I didn't know that touch up paint needed to be done or the bath mat looked all worn and tattered and should have been replaced 4 months ago.

-Make sure whoever it is you get has a back up or 5. People go out of town. They get sick and you have a turn and the washer dryer breaks of folks smoked weed even though you have a strict policy against it and you have a family checking in at 3. What I found is that it can not work unless you have someone who can have a team of folks to MOVE and that means in the Sec!  

I also considered going long term with my rentals- No way can I come close to what I make with them as short term rentals. I would look for a great fit or consider selling as a vacation rental biz  but that's just my two cents for this am.

All the best!

Paige  

I actually like it given that they went is guaranteed

Ohhh shooot! I often hear I can't invest in this market. I get it! I went to look in a less expensive market myself. My answer,  Dayton, Ohio. My husband had been there for training  for the AirForce so we had a little knowledge. In our heads it seemed like a good deal. The idea was ......buy a house or several which were turn key and preferably section 8. I found a flipper who did rehab, rented them out and had a management company in place. Essentially it was turn key all the way. We thought  we had  done this right.  The numbers and the rehab that had been done looked good and even if we had missed something we were in for less than 70,000 on every property.  We felt like we did all the things:

• We went to go visit the properties and met the property manager.  
• We drove around neighborhoods and spoke to a variety of agents and brokers as well. 

Cash on cash seemed great. Imagine, 58,000 for a triplex that was in good condition that was grossing  almost 1450 a month.  We knew going into Dayton that appreciation was not going to be likely or much if at all. Despite this we went in on our first property and followed quickly with another 7.  What we had not counted on was the tenants that had been put in these units or the management companies. Our first management company had the worst books ever. Yes, they always answered the phone but that was about it. The books were off on a regular basis and tenants were never served with notices. Those wholesalers, Right Choice Investments put whoever in these units to show they were rented. We switched management companies but that cost us money as we  were ending the contract early. Anything to get out, was the goal. As it turns out, I went from bad to worse. My next choice had been RPM. This was a huge company that I was certain would be able to do the work. When we switched , we had 2 tenants that needed to be evicted and one unit that was empty.  In the six months that I had been with RPM it took them 3 months to do the evictions, and the unrented unit never did get rented as they "don't do section 8." As it turns out, they never actually visited that property. The 2 evictions became 3 and each unit was left completely trashed. I was given bids for the work that literally included 5$ for a light bulb being changed and 13,000 in rehad work to 700 sq feet. From the pictures you would think maybe 2000. There was nothing structural, flooring, repaint and clean out. I considered going to Dayton myself and just doing the work. This company did everything by departments so it was never the correct department. Needless to say, we left this rental company as well but I was over the edge. How was I ever going to make this work!  I actually found someone on BP and was just going to discount and dump all of them through a local agent when a third rental management company was suggested.  Bob at Roost has been awesome.   We are rehabbed at normal rates, rented to good paying tenants and are well on the path to the success we had hoped for to begin. Lessons were learned along the way for sure BP. The please do not do as I did lessons in all of this are :

•  Go slow- I didn't wait long enough to figure out that it was or wasn't working before I bought 7 more properties and suddenly was in it for 15 units.
•  Really look to see that tenants are paying ( also I have learned that Section 8 and other housing agencies will pay but it might (will likely) be late depending on the agency. If you need this cash -(all of it to cover your bills each month) BE CAREFUL!
• Management matters-  They will likely answer a phone call to get your business but go off of referrals after that. If I had to do this again I would have asked them for an estimate on a rehab that had been quoted to someone else. Previous management companies were charging if it was leased or not - there was no incentive to have it leased up.. I feel dumb that I didn't catch this no incentive piece. This agency also does not charge a lease up fee if the previous tenant has to be evicted. I love this as I FEEL like it ensures skin in the game. I wish I would have looked for this before.
•  Tenants- I didn't vet these tenants and just trusted it would be ok. They had no income. I never asked for rental aps and I should have. 

Good Luck BP! It can be done. I / we are doing this and the investment is good despite a SUPER ROCKY start.

All the best!

Paige

Nice duplex with great curb appeal and in a great neighborhood of mostly home owners. This upper and lower unit has maintained much of the original charm with hardwood floors, decorative fireplace, high ceilings, original wood work and much more. All of the mechanical systems have been updated making the home more efficient. Nothing to do but collect rent on this one! Each unit is a 1 bedroom, 1 bath with private front and back entrances. 

427 Kolping is fully subsidized. 100% of the tenant's rent is paid for by Miami Valley Housing Opportunities. Rent is $560/mo

429 Kolping is section 8. Rent is $600/mo

Lots of updates made to this duplex:

New Roof April 2018

New windows installed

New exterior stairwell built to the rear, upper unit

Pex plumbing installed

Electric was inspected

New, high efficient furnaces installed

One brand new hot water heater; the other is estimated at 5 years and in good condition

New flooring in the kitchens and baths

Everything freshly painted

Hardwood in living spaces

Washer and dryer provided for tenant's use and will be conveyed in the sale of the property, along with all kitchen appliances

Gross rental income is $1160/mo OR $13,920/yr

Taxes are $1202/yr

Insurance will cost approximately $720/yr ( we paid 820 but it is insured through usaa at a full replacement cost of 260k

Utilities will cost $1896/yr

Property Management is $1120/yr

NOI is $8882/yr

Asking $58,000 - sold another duplex around the block from this one for $72k

15.3% ROI!!!!

https://www.biggerpockets.com/calculators/shared/343265/eafd9d1b-e4ca-4979-8890-ff14975caf40

 I actually am holding several other units and Dayton and will continue to have them all managed by the same manager that is managing this duplex, Reason for selling- I am looking to purchase some office space and will need capital out of Dayton to make this work. 

I have 8 rentals in Dayton Ohio. I have definitely learned some lessons along the way but can help with info as well.  

@Jeff Kehl Yes, the marketing is for adults!! I had the same thoughts. It is absolutely like open office. It looks amazing but how things appear and how they function can be a very different animal. We will see how this goes I also wonder that in some places I believe that you can not have more than x amount of people who are not related living under the same roof. I think the number tends to be like 5 ish! Bottom line though is that when a studio is going for 1400 a month and these are 900 to 1000, people need a place to live. I just wonder overall how this will work and wonder how this will pencil out for the builder developer. Interesting either way.     

Is Looking to Create Communal Spaces for Multifamily a Good Idea?

Small lots, zoning craziness and insane rents and housing prices has lead developers and investors to some super creative stuff here in the Portland area. One example given and do keep in mind, I will for sure get the exact numbers wrong but it was interesting either way. Soo imagine a singe family home on a lot zoned r2. Apparently that means that because of the sq footage of the lot you could build 3 units +.5. In Portland, apparently we round up so that now means 4 separate houses. Yes, it seems like some loop holes were found for sure. But stay with me. They are keeping the single family home and on each of the 3 surrounding homes sites they are building a   7 bed room "home"essentially en room suites, with a shared kitchen. This will amount to a total living space of 7 units x4 houses=28 suites with shared kitchens in each home. The large house, the original will not be torn down and will offer a larger shared kitchen living area where everyone from all four houses could technically gather. Square footage is prioritized in the shared spaces and each suite will be under 200 sq ft of actual living space. This will be done in partnership with Open Door. 

More about that the partnership. The developer is leasing the entire property to Open Door for a promised floor of revenue or rents received. A minimum of rents received was established   between the developer and Open Door to ensure units were actually being leased up. Units are to be rented for about 900 a month.  

Good news since lots are pretty expensive you do get to keep and use the existing house as part of the overall plan. This should save some  money although I swear after taking a 1890's home down to the studs I do think it can be cheaper to scrape.

This left me with a ton of  questions...... Coming from the commercial side of things where everyone thought open offices would be amazing idea I wonder about how space will actually be used? I wonder about the overall effects on parking? I wonder what will need to be done for noise dampening?  Most of all, I wonder is PDX BECOMING THE TOKYO OF OLD? POD HOUSING, in the Pacific Northwest, who's in?    

@Jeff Kehl

@Jeff Kehl  @Joel Owens @Hunter Latta - thanks everyone. I know it was a terrible deal but really what I was trying to figure is why then is everyone also so interested in buying properties just like this here? I get that you can value add and raise rents but when you buy in at 130k best case per unit at less than a 6cap it is hard to see that pencil out for anyone. I was mainly wondering what am I really missing here? 

@SteveVaughan no- not true I too was wondering about what was being asked but not true that money is what makes a transaction legal- 

Careful careful another owner in the Springs area left a basket with local treats. The small child got into them, allergic reaction, hospital stay, law suit and now she is out of  buisness. I know extreme but that actually happpened. I have stayed in vacation rentals before where the owner clearly was trying but... put the money into hiring great cleaners and don't do that yourselves, buy knives that actually are decent. Stock spices... these will go waayyy farther in a review than a basket or.. maybe that's just true for the reviews I write. Lol