All Forum Posts by: Kenneth Garrett

I have three sets of everything.  Because of the short time on turnovers (6 hours) my cleaners will take the one dirty set home and do laundry there and bring it back the next cleaning.  They will try to do some laundry, but usually there is just not enough time to get all of it washed and dried.  They only have a couple hours or so before they go off to other units.

@Todd Goedeke

Thanks for sharing the “Emerald Coast by Owner” ECBYO.  I had never heard of it.  Can you or others share their experience with using this sight.  I saw it’s an annual subscription of  $449 a year.  

@DJ Brooks

You will need to contact the city or county regarding why it is posted.  I’m not sure if the condemned notice is actually from the EPA or it just states EPA related issues.  If it is the EPA you then need to determine if it’s the state EPA or US EPA.  Could be a meth house or other type of hazard.  The term condemned only refers to the building is not habitable.  There could be many reasons for that.

@Mariah Myers

As @Luke Carl mentioned bookings for the summer start about now. Memorial Day to Labor Day. My STR is a 3/2 so it doesn't have the big numbers that the bigger houses have. You'll get a nice run for spring break. A solid 5-6 weeks full for March and April. Those don't get booked until a few weeks to a couple weeks before.

Best of Luck.

@Shenell Caldeira

I've had great success buying REO's directly from the banks. When banks finish the foreclosure process many times they just sit on them until there directed to move them. Don't waste your time with the large banks, you'll never get to the right person unless you operate a hedge fund and are going to buy hundreds at a time.

I found small local banks work the best. Credit unions as well. It’s all about small banks. They also like cash buyers, an easy way to move properties. It will take some effort. Here is the plus side, no competition for the most part. If you build a good relationship with the banker they will call you when there getting ready to acquire another property.

The two keys:

1. Have the money ready.

2. Be good at analyzing deals quickly, in other words know your market as an expert to determine what a good deal is. You can still negotiate with the bank based on repairs, mold, etc.

@Kenny Kuramoto

Let’s put these numbers in a different order:

PP 100K       
Rehab 40K.           
Property tax $500 - is this during rehab?
Closing $2000 - not sure what this was applied to utilities, ins, etc           
$6000 closing costs - maybe on the refi - not sure
Subtotal $148,500 - I am assuming this covered extra costs during rehab as well which always seems to happen.

ARV 175,000 - $148,500 = $26,500. 175,000 x .75 = $131,250. $148,500 - 131,250 = $17,250

Rent Numbers     
Rent 1400.        
Property taxes  per month??      
Insurance $100.     
Maintenance/Capex $210. Glad you accounted for this, but after rehab should not need to spend much on maintenance/capex. How did you arrive at $210.
PM $100 - Pretty cheap, I would use 10% of rent ($140) or self manage.     
$873 Mortgage payment does this include property taxes or insurance, i am assuming no.    
Vacancy $100

Cash flow $17.  Definitely way too low.  Maybe capex/maint., is high after rehab either way it’s low.  
to answer your question, yes that is basically correct on how you run the numbers. I added a few things for clarification.

@Patrick Deering

I don’t look at Cap Rates as they are only applicable to 5 residential units or more or a commercial building.  I agree with @Mason Hickman about coc and cash flow or profit. If you're talking about rental property; cash flow and CoC are the best metrics. I like a 15% or better return on my cash and a $300 cash flow. If you bought a property and financed it and it cost you $25,000 of cash (down payment and closing costs) that would bring you a CoC of 14.4%. Not bad. I like to shoot for 20% that equates to all your money being returned in 5 years. When you invest in BRRRR projects you can get your money back within the first year and you can then reinvest that money.

@Daniel M.

If you’re not happy with the work have him fix it.  You are paying for the work.  I would not hire someone else to fix these things that should not have been an issue.  Don’t pay twice.

At the base of the wood floor there should  be quarter round molding (some call it shoe) where the bottom of the baseboard meets the flooring. None is installed in the picture.  Doors should close properly, not sure how bad this is.  Baseboard gaps should be fixed.  If small, caulk and paint will take care of it.  Closet doors should be aligned.  If you’re saying the electrical plates for the receptacles and switches have gaps around the plate.  Drywall and mud will correct it.  It’s a pain because you also have to paint it again.

@Christophe Madell

I've used private lending for years for my flips and BRRRR projects. It's a great way to fund projects without using your own capital. I've never used HML so I can't speak on that. After my first BRRRR project, I was able to get 100% funding for purchase and rehab. Real estate has been good to me.

@Thomas O'Donnell

Congrats on the house hack.  This time of year is the most difficult to find tenants in the Midwest.  I’ve had to lower my rent in January and February.  March always seems to pick up.  Look at your competition and see what they are offering with amenities and overall quality of there units. Look at there qualifying criteria.  Most tenants don’t read the requirements, I think they only look at rent and location.  That is frustrating, but it just comes with the territory.  Sometimes based on our market we ask for too much where we limit ourselves.  Not saying you are doing that, but for instance I want a credit score of 700 and an income of four times the rent.  That reduces your pool of tenants and your market has to be able to support that or be reasonable.  I agree screening is the best avenue to selecting quality tenants, just don’t over do it.