All Forum Posts by: Jacob Gomes

I haven't completed a rehab loan, but I have been UC on one. 

If you can pull it off, it's a great strategy. However there are a lot of moving parts and you'll need to understand that you're in for a battle. It requires not only the usual hurdles of a home purchase, but you need to find a solid contractor who is okay to do/sub out the entire project. And their estimates need to match up with the consultant from the lender. 

A lot can go wrong and there is a lot of work involved, but if you're going into it with that understanding. Then it can definitely be awesome!

I can speak for Nashville.

It's an awesome market to house hack in. Due to our slightly limited number of multi-families, compared to some other comparable cities, I have clients who get creative! They will buy a home and use/build an in law suite to live in while they rent out the other side, or vice versa. 

Another strategy my clients are using is to buy a property zoned and permitted for Airbnb, they then live in it for one year, then move out and have a fully allowable, cash flowing airbnb!

That being said we have a cities very close to Nashville with way more multi families available, Clarksville. It's the 5th biggest city in TN and is booming currently!

Managing out of state is extremely difficult. I wouldn't recommend it. 

Airbnb and VRBO are awesome, Airdna and wheelhouse are great, but what I think is superior is to establish a relationship with a local STR property manager and get their input.

That being said they'll be able to have a much deeper insight into the specific market and will be able to assess which months, weeks might have particular trends and will be able to expertly predict some big weeks. For example, in Nashville we have the draft this summer. That's gonna be a HUGE week and the manager will be able to capitalize on those opportunities and not leave money on the table. 

I'd recommend someone local. Not a big company, national company, but also big enough that they know what they're doing and have the resources to get the job done. I think the best range is for them to manage minimum 10, but not more than 100 doors.

It obviously needs to be worth their time so you'll either need to use them, refer them out, etc.

Hope this helps!

There is obviously a ton of fear in the market at the moment. We live in a "fear porn" era and the doom and gloom headlines are what many consumers take as facts. 

I operate out of Nashville, TN and I'm able to provide clarity to my clients due to our continued explosive growth, job increases, and built in residence due to the large number of varied and successful businesses here. Every market is different. 

What are the biggest fears that those you communicate with have in regards to why they think things are going to hell, why it's an awful time to buy, etc?

My rule is that your property should never be negative cash flowing. Yes it may be better than the bank rates but it's not a sustainable method. The goal is to make money, not to lose less money. 

I work in Nashville and none of the deals I'm working on with my clients cash flows less than $200/mo/door. To me that's the bare minimum in order to have enough for repairs, cap ex, etc. 

Nice! The MTR strategy is an awesome approach that’s more consistent than AirBNB and easier to manage, while having the higher reveal ability than LTR!

What’s cash flow looking like?

It's hard to say exactly what the return will be since it's all based on comps in the area. I have clients looking for in law style suites currently and they're certainly hard to come by so I do believe that there is a huge demand for it, therefore I think it is worth it. Happy to send you properties that have sold with this set up for you to see what those end products look like.

Different areas will also have different return. East Nashville would crush, Nolensville, maybe not so much.

Finding a finished basement and putting in the kitchen is going to be more cost effective on the rehab side, but you'll be purchasing the home for higher than you would have otherwise. 

Both approaches are awesome, I think it just depends on what you're looking at for entry price and cash on hand for the actual rehab. 

One thing I'd recommend is to pivot where you're putting your money. 

You're young and seemingly hard working and hungry. 

How can you take the money you're putting into those index funds and invest in yourself? What skill sets could you invest in to greatly increase your truck driving income or have a side hustle that bring it to you as well? Extra certs, buying your own truck, etc. 

"Instead of the S&P 500, most should invest in the S&Me 500. 10x what you make rather than earning 10% on what you’ve made." - Alex Hormozi

As far as investing in real estate goes, house hacking is a tried, true, and awesome way to go. Even if Nashville is big above where you want to be for a price point, you can always look in places like clarksville. Growing but less expensive. 

Agreed! It's so hard to find homes for sale with DADUs already built and ready to go.