All Forum Posts by: John Litz

I would suggest patience, get your budget, credit score and DTI under control before adding to it with more debt. Reduce expenses and increase income to set yourself up with the discipline to succeed.

Seeing exactly what you are saying, plenty of price drop notifications but they are small just to boost eyes on the listing. Lots of relists because inventory isn’t moving much. Plenty of deals falling thru and getting relisted. New inventory seems more popular because of the better interest rates and turn key. Rents are being very resilient. 

This is a hard NO for me. Tenants typically do terrible work. I keep the same color in all my rentals for ease of repainting and I only have extra paint for the one style. At scale this becomes so much harder. I also use a semi gloss throughout the entire home so it is easier to clean kid finger prints everywhere. If the want colors they can hang decorations and floor coverings. Last thing you want to deal with is trying to cover up different colors and having to do multiple coats because colors bleed thru. Sometimes bad things happen with evictions and such, now you’re stuck dealing with the repaint regardless of addendums. Just been doing this way to long with my own units, my parents units and my cousins units. Steam lining turnovers is extremely important. 

I keep hearing of all the huge reductions in bookings. However I am doing better than I did last year. With economic uncertainty people are still traveling. They are just doing lower cost vacations they can drive to. There is a lot to be said for having something different, an experience. I don't see any crappy STR's in my area. Everyone has a nice property like a hotel. However so many also like a hotel are rather boring. Nothing to write home about. My property could be just like that as it is just a 3 bed 2 bath. Instead I came up with a theme that flow throughout the house. I have added every single amenity I could possibly add. Any profits I put right back into the property to improve it. Always looking for ideas that will make people want to book. This weekend I am painting my retaining wall. Boring manual hard work, but with a plan. On the retaining wall I will add my logo for the property that will be an excellent spot for taking pics for social media. Free marketing at its best for an investment of maybe $1k and a couple days of my time. Work harder than others and the bottom doesn't really matter because your a top performer getting booked solid.

I use AI for marketing on my STR. I ask for scripts on pictures. Optimize for SEO. Different ideas to improve the property. In addition I use AI to help write LTR leases for my area optimized for an easy eviction. Tax strategies and budget analysis.

When I was young I had plenty of room mates. The term house hack didn't exist back then. None of us made much money and it's just how we could all afford rent. At 42 I bought a duplex to help pay the mortgage (house hack still wasn't a term then). I am 56 now and still live in the same duplex. My tenants pay the mortgage and I live for free. I was able to buy a second house that I am doing a short term rental in. It is doing well and have plans for an ADU this year for a second STR.

I bought an SFR specifically because of its layout. The upstairs is already setup for stand alone 3 bed 2 bath with a nice back yard space. This area I am doing an STR so it is making a little over $1k per month in cash flow after all expenses plus an additional 15% for vacancy, maintanence and cap x. So even if I don't build the ADU I am doing very well with this property. The downstairs has 2 garages in which I have additional washer/dryer unit so laundry can get done faster. The other side downstairs already has a huge space and a bathroom. I will be building out a 1 bed, 1 bath with full kitchen and living room in this space that will also be another STR with its own entry door. Funding will be done by taking a loan against my TSP where the interest rate will be 4% paid to myself. Complete pay back will be just short of 2 yrs with almost 100% cash flow after pay back since the upstairs will be paying the majority of the expenses. I bought the property for $430k and when complete with permits it-will have an ARV of $650-$700k with about $60k repair costs. Downstairs will produce $25k per year on its own.

I can see both sides of the OP and Dan H. OP gives some numbers on returns that are specific to the area. As we all know RE is very specific locally. So not everyone is going to get $2-3k rents. However Dan H is over stating negatives locally as well. Some areas ROI will be better than the negatives he faces. There are many flavors of ADU's and not all screw up privacy and yard space. I am converting existing space so it won't cost nearly as much as building a detached unit. Won't mess up space for the yard and won't impede on privacy what so ever. Since it is existing structure the cost will be significantly less. I personally am a fan of ADU's but as with all RE you have to run the numbers and analyze the deal to see if it makes sense for your situation. The deal will always tell you if it is right. No emotions, use the right strategy for the right situation. California does have some very good ADU legislation. Cost to build vrs rental income is the issue most will come up against if your area allows them to be built at all.

Have house hacked for 13yrs in a duplex. Tenants have always known I am the owner. I have nothing to hide. To mitigate liability, I make sure any issues are fixed right away, keep good home owners insurance, have a large umbrella insurance, and keep a mortgage on the property so if I get sued the bank lawyers also help fight. I use Hemlane for rent collection, finding tenants and vetting tenants. My bank accounts are separate from my personal account to make it so much easier to see profit/loss and taxes. Every property should cash flow and pay for itself, no alligators !!!

I live in Reno Nv. FMR is what section 8 pays. You can easily look this number up with a google search for your area and then inputting your zip code on the website. Market Rent is what the regular market pays. However these two numbers are fairly close at the moment for Reno. Bath count does not matter for FMR, but you can get a little more with additional baths for Market rent. Section 8 or FMR- is more hassle but also more guaranteed. Market rent can get slightly higher rent but has more risk.