All Forum Posts by: Will F.

Hi anyone invest in STR or real estate in western Massachusetts? How do your properties perform?

We were looking at western mass and saw some areas with 25% coc 

Anyone have experience there or a real estate agent recommendation? Or prop management recommendations?

thanks

Quote from @Padric Lynch:

I know the intent of the SBA 504 loan is for owner occupancy, but when can an owner rent to another tenant? Let's say I build a commercial building and my business occupies 60% (per SBA requirements) of the building while a tenant occupies 40%. My business turns out to be not that lucrative and renting my space to another tenant would be the buildings highest and best use. When would I be able to rent the 60% I was using for my business to someone else?

Hi did you get an answer to this? 
i was wondering the same thing.  How long would you be required to owner occupy a building financed with sba 504 loan. 

Quote from @Howard Rubin:

ACH rent payments are free with Buildium at the "Growth" level - if you have more than 100 or 150 units (can't remember), you have to be at the Growth level.  Same for AppFolio from contact with them.

In terms of Accounting, I honestly have read that many people continue to use Quickbooks for accounting alongside Buildium and AppFolio.  Yardi Voygaer is just way too big and expensive for the level I am at.

 Buildium is free for ACH rent payments... charging $1 for yardi to accept ACH is a deal breaker

I find Buildium platform to be slow.  Also I wish it had more options and was more user friendly.  Their website is very laggy though. not sure why this is the case...I'm thinking of trying out Appfolio

One benefit of Buildium is it's cheaper, but it's lag makes it unusable at times.

Investment Info:

Single-family residence fix & flip investment in Long Beach.

Purchase price: $460,000
Cash invested: $120,000
Sale price: $675,000

Contributors:
Amaury Zambrano

This is a fix in flip purchased under 75% ARV
ARV was estimated at $610,000- but sold for $675k.
Private Loan is $400k the rest is my own cash invested.
Initial personal cash was apx $60k for purchase $75k construction $20k holding costs, $25k closing costs. Approximation.

Total Cash $180k
$400k Loan
Net Costs $580k

Sold Price $675k

$95k net profit
$400k Private money
ROI 63%

How did you find this deal and how did you negotiate it?

Agent relationship

How did you finance this deal?

PM

How did you add value to the deal?

Renovated kitchen bath floors windows landscaping paint roof plumbing etc

Investment Info:

Single-family residence fix & flip investment in Long Beach.

Purchase price: $460,000
Cash invested: $120,000
Sale price: $675,000

Contributors:
Amaury Zambrano

This is a fix in flip purchased under 75% ARV and looking to resell in late February or early March depending on changes in the scope of work.
ARV was estimated at $610,000-- but sold for $675k.
Private Loan is $400k the rest is my own cash invested.
Initial personal cash was apx $60k for purchase $75k construction $20k holding costs, $25k closing costs. Approximation.

Total Cash $180k
$400k Loan
Net Costs $580k

Sold Price $675k

$95k net profit
$400k Private money
ROI 63%

How did you find this deal and how did you negotiate it?

Agent relationship

How did you finance this deal?

PM

How did you add value to the deal?

Renovated kitchen bath floors windows landscaping paint roof plumbing etc

Anyone know a broker or lender who loans in El Paso texas?  I have a family member who owns some business and a substantial real estate portfolio. They make good income and have a high net worth

Looking to finance a primary home purchase there in El Paso. 

For some reason they’re having issues with financing. Yet their real estate portfolio has about 85% equity. It doesn’t make sense why they’re not getting loan. I think they need other options 

Quote from @Leslie Anne Morris:

Miami is super competitive since there aren’t that many pockets where it’s zoned appropriately. It’s similar to Nashville. Your listing needs to be sparkling perfect. Pro photos are a must, all the options flexible / relaxed for Airbnb algorithm & then try some targeted ads. 

Would you say more rural smaller town in general have a larger CoC or ROI than big cities? I have a few airbnbs in Long beach ca and they sound similar to this poster. Mine are definitely filled maybe 95% occupancy, but i have some sketchy guests or ones that bring more than they claim... It doesn't have a larger cashflow than LTR, maybe 20-30% after I calculate all of the expenses

For the OP @Daniel Blanco I think you have to take better pictures, and furnish your palce more, theres a lot of subjective things like how you respond to guests etc which will improve your ratings.  It's not just comps.  Whats the accessibility from street, parking, immediate hyper local neighborhood, condition of exterior, response time, appliances, cleanliness... just so many th ings,  Also when your'e newer you have to gradually build up your score over years not just weeks/months

It seems people always anticipate higher ROI than expected first year. It's year 2-3 when you have many reviews and some repeat guests that it does better

I think we'd also have to look at your entire listing to legit give you opinion on the issues with vacancy

--could you give link?

Quote from @Dan H.:

Make sure you know how the property will be valued after adding the ADU. In many CA markets, the ADU adds less value than the hands off cost of adding the ADU. This results in the initial cash flow being required to recover this negative position. An initial negative $50k position would take over 4 years to recover at $1k month profit. Search BP and you will find numerous posts on properties that added ADUs that resulted in large negative positions that they require years of cash flow to recover.

Most HELOC are variable rate. I am always leery of using variable rate financing and reserve its use for short term debt. This is more true in a time of increasing rates. I expect the fed to raise their rate 0.75% to 1% this week.

I also expect outstanding returns on my leveraged debt (HELOC, margin, etc). For example, that $100k could purchase $500k of property at 80% LTV (not including closing costs). The $100k would be far better leveraged and likely to produce better return than it would on a $140k investment ADU.

Adding ADUs are not passive. They may be as much or more effort than a BRRRR. I historically have achieve infinite return on most of our BRRRRs (meaning all financial investment was extracted). Point being adding an ADU takes time and work. It is not like investing in S&P500, REIT, or joining a syndication

You already mentioned to loss of privacy and reduction from existing unit (loss of yard, garage, whatever)  

does it still sound great? Maybe, but do your research.

Good luck

The part where Dan mentioned that HELOC/ ADU might not be best total return on your money or IRR vs using leveraged debt to buy more property needs to be stressed!
Also consider tax reassessment-- in CA we have low prop tax unless you do something like build a ADU or change ownership...

I think it would be difficult to get as good of a return on the ADU versus just buying more RE. 

But there could be good total return or IRR--  maybe you were going to quickly sell after the ADU was built or do a cash out refi.  But then consider time and opportunity cost as others mentioned before too

Quote from @Adrian Lemus:

Quote from @Branden Rivero:

Quote from @Adrian Lemus:

Yes, its the new area that Miami is revamping. I believe that now is the best time to buy there and within 5 years it’ll be another spot like Wynwood is. Remember Wynwood 10-15 years ago wasnt what it is today and the same goes for MidTown. 

I’ll check out that area on Monday as I’m doing my rounds visiting my projects. 

I don’t know about all that now, is it going up? Yes . Next Wynwood , no

10 years ago Wynwood was still Wynwood and growing as was midtown. But pine wood is no where near as commercial as Wynwood or midtown. I’ve lived in midtown/edgewater for 9 years now and still do

 I wasn't talking about Pinewood; I was talking about Liberty City. But you're right now that I think about it. The years are flying by, but when Wynwood was the Little San Juan, it was just as bad as Liberty City or maybe more similar to the way Allapattah is now. Wynwood came about in 2009 when they revamped that area and still are. Right now, that place is overpriced which is why investors are starting to go into Liberty City. 

 Yeah spillover from overpriced B or better neighborhoods could make sense. 

My fear would be that if a bad long recession with stagflation comes there could be high vacancies or worse, non paying tenants who often trash apartments. 

If the area is a C area then it could revert back to blight or a decline--instead of 'gentrifying' like a lot of areas closer to the water or closer to A/B neighborhoods

Quote from @Samuel Toma:

Hey Will,

I bought a SFR last year in Vegas and want to buy a small multi there next. I've been watching those specific properties for a while now. I'll DM you.

Sam

Great man let me know if you do end up.  I don't have many contacts there.  I pulled out of a deal there recently because there was a pretty substantial discrepancy on the num of units lol