All Forum Posts by: Leland S.

Quote from @Lee Gilroy:

We finally finished the ground up construction of our Joshua Tree/Yucca Valley STR!

We designed and built a 2,244sq' 4 Bed/4 Bath with Pool, spa & game room in the  middle of amazing boulders and surrounded by Joshua Trees.

We launched it on 10/5 and are so happy to report that we have our first  booking this weekend 10/8 & 10/9!

Check out the link below for pics

Click here to see our Joshua Tree Air bnb

 Curious, how long will it take to payoff your out of pocket on the build? I see a lot of crazy high end Joshua Tree Air Bnb's and figure it must cost a fortune to get materials and workers out there. Not to mention, where are the utilities coming from?!

@Ricardo Hidalgo

There is SOME cash flow - I computed a 6% cap rate with 15% costs on a new build. And remember, I am taking out a 80% LTV loan for a solid appraisal. If it doesn't appraise that much, my cash flow will increase, but I get less cash in pocket the same amount as I would selling.

@Alex Olson I am looking to jump into a 10+ next. I'm not 100% sure I need to sell this to achieve that since it's only getting me an extra 300k in pocket vs 500k. If it did make or break some crazy deal on the edge I'd sell them for it. I'd like to hear your strategy.

@Joe Villeneuve Sounds to me like you're guage is ROE then. When any of those two events you listed occurs, you are right, you should make a move. But isn't a HELOC or refi one way to keep the same property working for you rather than the losses associated with down time and commissions of transferring to a new asset?

@Joe Villeneuve what is your standard for holding or selling a property? ROE, ROI, CoC? Everyone plays for a different reason. Mine was short term rental income, but that is not allowed now.

@Joe Villeneuve - possibly.. but assuming the rental market maintains strength that pays the mortgage, it isn't an issue. These properties are in a good location that should experience more demand in the next couple of years and I believe appreciation. 

@Theresa Harris - given I'm in a higher tax bracket as I have a day job, I will be taxed unless I 1031 exchange into another property. I'm really just gambling with the margin on the extra cash out per above. 

@Chris Seveney - depends on final lending and appraisal. I assume 360k more than refi good case, for 80% LTV more like 250k.

My analysis shows I gain zero income on these high-end townhomes I just spent 3 years building. They are new builds so I expect repairs to be minimal, but since my GC was such garbage (and his subs) there is a risk of things going wrong. 

I am estimating a cash-out refi at 80% (unsure if the bank will do this) which will get me maximum cash back to invest in other things. I am currently at 75% LTV with the loan. Also I think their amortization is only at 20 year, however at a much lower interest rate (4.5% last I checked) which ends up being the same payment. Only difference is less cash back.

Part of me wants to hang on to the properties for equity growth, essentially just let the tenant pay for my mortgage and equity growth.