All Forum Posts by: Will F.

OK lets say a property is operating at a 5 % cap what could Air BnB ball park rent for?

I was thinking of just testing a couple of my units.  It won't really make or break me and if it generates 20-30% more net income (after expenses) I may continue the model or expand it to other units.

Also does anyone have experience with or recommend any of these AirBnB Turn over / Management companies that charge 10-20%? Or perhaps a local Long Beach or Los Angeles management company?

Thanks

I bought a ten unit.  Also have a few duplexes out in broward.  The returns have been good.

There's many factors.

Depends how soon you plan on moving or selling either property.

For instance if you were planning to sell your primary home in 3-5 years or the rental I would not refi either.  As refinancing has it's costs, and they're not just monetary--time is another cost and the work u have to put into a refi.  Also new loans lower your credit scores often

So it depends...

Also many like the stability of a paid off primary home since that's not really an asset (debateable) until you sell it. But then where do you move?

Also I'd focus refi'ing any loans that are higher rate-- but this also depends on the amortization schedule and some other things

If anyone says there's only one answer they're either new or don't understand real estate!

Hey guys I currently have 30 units locally in South Bay, Los Angeles County, Long Beach etc.  1-2 bedroom units.

I was wondering if anyone who has several rental units has converted to air BnB short term rentals. If so how has their experience gone?

There's some local and not local companies that do the management - Take calls, set up AirBnB accounts, host etc, and charge 10-20% of the rental income

How has your experiences gone?  How much more have you been able to do?  How much more could I get after expenses on short term vacation rentals?  for instance if I receive $1600/mo for a 1br/1bth how much more could I possibly get.

Note these are in pretty good metro areas, C+ to B+ within a couple miles of the beach.

I plan to not be super involved and outsource a good amount.  I already have a team for construction and some property management, but was wondering about outsourcing for vacation rentals. 

 Hey dude Ray Dalio kicked his prediction back a year or so recently since the China/US trade seems to be stabilizing and stocks are bullish... it's kind of odd how these fear vs greed markets work.

Anyways always be ready for a recession and BUY MORE when there's blood in the streets. If you're a true real estate investor then you welcome recessions as cycles  part of our capitalist society. One just sbuy low sell high

Sounds simple but that's all it takes see Warren Buffet's value-add investing strategy. Essentially that's what you do with BRRR methods. Think long term, plan, strategies, rinse and repeat. the BRRR method and buy and hold works in up and down cycles if you know what you're doing. If you don't just wait it out until we're in a bear RE market.... Cheers

 Sorry I haven't been on here in a while nor answered your question.

Well in my market rentals go for $160-300k/ unit depending on the submarket and if it's a newer build, value-add or rehab.

So it's very difficult to say and it depends on your own personal finances.

But for buy and hold I've purchased 22 units in 2016, 6 units in 2017, and a few in 2018 and 12 u in 2019 

Some were local Los Angeles County and some are in SE Florida.

I also sold several properties in LA last year, some were hybrid hold/flips and more development deals...

Also asking how many units could be completely different in a market like OKC or Utah where you can likely get units cheaper, OR the market might not have larger apartments, unless it's in a larger metro like Salt Lake.. so it really depends.  like is the market $60k/door or $150k/door, and this will be very different if they're SFRs or Multi Fam

Sorry but anyone who doesn't say it depends is probably a noob or a REI crook lol...and ther'es a lot of those in this business. Phoneys etc...

Good luck bud

I haven't read all the posts. I don't need to because I've seen this time and time again.

  I have been through the last crash. I've been investing since 1999 and I weathered 2007-2010 without major issues (those were actually good years overall for my portfolio).  This was simply because I did not overleverage nor did I invest in anything with pure speculation.  I just stuck to the fundamentals and tried to buy cash flowing real estate from 1999 until now.

If anyone thinks they're going to get the 2010-2013 deals then you're dead wrong.  

There will be a short term cycle downturn, a recession and a correction in the foreseable future, but if you're expecting a "MEGA" crash because we had a bad crash in 2008-2009 then you're in the wrong industry and should instead be playing the stock market.  First there's not the "big short" style over leveraging in real estate as ther was prior.   Overall the fundamentals like supply and demand for housing are 'good'.  

 If you invest in sound cash flowing properties or know what you're doing with value-add you should be able to continue to find decent deals and weather storms to come.  If you're expecting to time the market and wait for the buying opportunity of a lifetime you're a fool... You're also a fool if you're buying for speculation right now.

If you're new I'd definitely wait it out, but if you know what you're doing just keep on trekking...

 The problem is that people don't truly know how to buy cash flowing properties, and they underestimate capital improvements or rely on proforma numbers for their analysis... Or they simply think they can manage an underperforming property better than the previous owner, which often isn't the case...(but sometimes is)

My strategy is to continue buying cash flowing multifamily real estate every year for the next 30 years.  I will obviously take advantage of market cycles and only buy fundamentally sound properties OR properties I can easily turn into a sound property (or flip, but I don't want to get into that lol)

 Be careful out there!

Yes it's market and sunb market dependant

Some areas a 1/1 might actually be desireable... for instance if thers a lot of young migrant worker class milleneals

A 2/2 obv could be more desireable y young couples and married etc... a lot of other factors too

So it's about truly knowing your market, comps, etc.  I'd call some other investors landlords and prop managers and figure it out.

It also could be that your 1/1 is underbuilt compared to the market product... lots of factors here buddy! just keep testing and talking to people in the industry

Gotcha. Thanks for the advice perhaps we can meet up on next trip.  I'm probably 60% buying in Fort Lauderdale/Hollywood/Deer field/ Del Ray now.  And I have a 20% chance of buying in Los Angeles/Orange county and 20% chance I'd buy in West Palm Beach/ Lakeworth (I really love the area)

Timeline:

  I have 45 days starting Thursday and another 6 months to close on the upleg starting thurs :)  I'm actually in escrow on a Ft Lauderdale property now and probably going to cancel it because of building issues.

I rush into everything then when I have looked at a few dozen maybe walked a hundred I pull trigger. More so is that I only come out here a few days at a time.  I've looked at about 20properties this trip.  so I have about 10 I'd buy

Today I walked about 25 more properties in Fort Lauderdale, Del Ray and Deerfield..now my decision is even harder

So my 1031 is closing now so I'm revving it up.  

I know some of the above posts seem like I'm overly enthusiastic. I've been this enthusiastic about real estate since 1996 when I used to manage properties and be a glorified handyman for neighbors and family. I got the real estate 'bug in 2002 and started reving it up in 2004-2008, 2008 -2010 wer also good years just stabilizing properties and repositioning them, then again in 2011-2018 reved it up.  We're probably due for a correction soon... but I'm long on real estate and I still think 2008-2013 were the good years lol (buy when there is blood in the streets and int he begining of a bull market. I'm buying now too but I consider this a long term 'dollar cost averaging'  I'm gonna buy when markets down (a lot) and buy when the markets hot (conservatively) and buy when the markets stagnant... the goal is to buy 800 units in great Metros (east west coast and heavy metros) )

I like a lot of the neighborhoods here... I see a lot of potential just to hold with caps of high 5s or low 6s.  I've been to the local big name brokers and they've pitched me their 1980s working class neighborhood Lake worth properties some operating at 7-8 cap mainly off market.  I also found a couple in Del Ray Beach that seem decent also off market but have a few issues.  One's on Dixy highway about .3 miles North of Atlantic

I've just made LOIs to a couple properties in North Palm Beach (cookie cutter 1970s stock buildings some semi-value add),  in Singer Island (short term and long term rentals), Hutchinson Island (ari bnb type high cap 8-12% but seasonal), Lake Worth (some are near Military trail 1980s-1990s stock), Several in Fort Lauderdale (B- to B+ buildings in victoria park, flaglar village C buildings w value add, lakeridge , ), Hollywood (where I have some units already), and a Deer Field (off market 14 unit (semi turn-key B+ building, 2/1s,  studios, and 1/1s $2.1m deal on beach)

Above are Priced all over from $1.23m and up to $3.4m

6- 24 units

Most are 5.5 to 7 cap (some are 5 caps operating with potential for high 5s but others are 6 caps [B to B+ locations with C+ to B+ buildings] with potential for 7 caps  [working class C to C+ locations with B+ buildings]

B areas and some C (working class/ suburban/ruralish vibe like Davie used to be)but safe neighborhoods

(I'm so rushed with limitted time so my posts are gonna be sporadic.  I'll be back in town hopefully for one of the meetups in Ft lauderdale or Deerfield)

Anyone have thoughts on the general list above? 

Gameplan:

I usually start with a large 'funnel' in my searches then weed out bad deals an eventually arrive on about a 20 deals. Then I make LOI offers on a dozen deals.

I usually get into escrow but I feel the softening of market so less active buyers etc...

Anyways i'll keep yall posted hopefully I don't get burned jk Lets be real here I'm a local noob.