All Forum Posts by: Justin Tahilramani

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Hello Everyone!

I'm looking for a little feedback on an idea that i've been contemplating. I own about 40 acres of land in a growing community near a major military base. I am considering building a duplex at the front of my property for the purpose of short term rentals. Our land is located about 15 minutes from the base.

Ideally we would market to service members that are still looking for housing. The military pays families for 10-days of hotel stays as they search for housing. The military will pay up to $99/night. 

We would also be able to market to people that are on temporary duty or to extended families that are visiting.

The advantage of staying in a duplex on our land include:

1) Full Kitchen

2) Ample parking for moving vans, trailers, boats, etc

3) Washer/dryer in unit

4) Pet Friendly 

5) More space and privacy than a hotel

Potential Disadvantages:

1) Cost to build: I expect that the cost to build the duplex will be around $85/sq ft. If we do 1,000 sq ft/side - we will be around $170k

2) 15 minute drive to post

3) Our land is not in the city

4) Providing cable/internet would be expensive because we are not serviced by major cable companies.

I feel that $99/night would be a value, but there really isn't any similar options in the area to compare to. The closest thing to what we are offering are extended stay places. 

Any advice is appreciated....

I had a tenant pay 12 months up front once. It was a retired couple and they handed me a check for 15.5k. Worked out great. They were perfect tenants for the 13 months they stayed in the property.

@Fiona S. - Im pretty sure that a buyer will need to get financing through a farm loan to buy 24 acres. Maybe someone in your area can provide specifics.

@Fiona S. - What is a lot of acres??? Too many acres and your buyer will not be able to get traditional financing.

@Mark Hoffman - So real quick analysis:

Purchase: $60k

Rehab: $30k

Holding Costs: $5k

Realtor Fees: $5k

And.....you ran out of equity......

@Mark Hoffman - Why would you make an offer on a home that you have no way to buy? You are simply wasting your time as well as the sellers time. Your posts don't demonstrate that you have deeply analyzed this "deal." The other posters are 100% correct - how do you know this is even a deal?

In a market economy you're not the only one out there looking for a steal of a deal. If its so good - why hasn't a cash buyer bought the place already? Im not saying that you have not found something good, but don't be fooled, EVERY market has savvy investors with DEEP pockets. If they aren't interested you should wonder why....

@Joe Fornasiero- You stated that the HVAC was replaced about 10 years ago, which means that you should be expecting to replace them within the next 1-3 years. Sure - they may last 5-7 more years, but you always have to plan for Murply. Two HVAC's will easily set you back 8-12k.

How does the roof look? Thats another big ticket item. 

Also, 187/month on taxes seems really high - is that correct?

@William Hirsch - Hard money lending at zero percent? What do you mean? 11 - 14% is more likely....

@Dan Guerrant - It really depends on your local market. I would not be excited about those numbers. Are the units individually metered? Do the tenants pay utilities? Unless the seller is desperate to get out of the deal they are not going to give you a 30yr/4%/0 down. If he does - I would be VERY skeptical.

In most markets you cant rely on tax values. You also should not rely on an owner estimate. Do you know anyone experienced in the area that can help you out?