All Forum Posts by: Larry Turowski

@Aldrin Meneses Quijada short answer: 70% of ARV (after repair value) minus the cost of repairs is a formula for the maximum allowable offer (MAO) on a prospective investment.

Long answer: This is outdated. You are not likely to find many or even any deals that fit this formula (though I sometimes still do). A formula or rule of thumb is just something to help you filter. You can not possibly analyze every deal. Formulas or rules provide a shortcut to deciding where to focus your attention. That’s it. They are not a guarantee of success. Think of a walk signal at an intersection. You don’t cross the street without still looking both ways do you? Otherwise one of these days you’re going to get run over. You still need to do your due diligence. Conversely, we will miss opportunities to cross the street when it is safe and the walk signal is not shown. This is where the analogy breaks down because there isn’t much analysis needed to figure out crossing the street. Real estate investors will tighten their criteria if more deals are passing through their funnel than they can possibly consider or broaden their criteria if too few are passing through. Ultimately you got to “look both ways” on any particular deal you and decide if the numbers work. 

@Bruce Woodruff just about all these posts are about how to make your house better, more appealing, and that is great but that doesn’t really address the issue. I’ve seen two basic suggestions for getting your weeknights filled: longer minimum stays and some sort of pricing advantage (4th night free, lower rates, etc.)

What research have you done? Are others filling their weeknights? If so is it because their house is different (the house itself or location) or because of their pricing and marketing? Who are their target customers? Have you spoken to other hosts in your area? Have you determined there is a STR market that includes mid-week stays (I'm sure there is but have you researched the hard questions)?

On a side note, I noticed you’ve only been on BP since April of 2021.  Is that right?  And you’ve made almost 7,000 posts?  Booyah!

@Lacey Burns do you know the property is listed live now? Personally I hate not having my finger on the pulse of things. It is not difficult to list your house. Get professional photos. Put a sign in front. Put it on Zillow and on Facebook marketplace. See what you get for traction.

Keep in mind that fall is the worst time to find renters. You’ll get maybe 1/3 the traffic you’d have in the spring. So it can take longer. 

Ask everyone who inquires, wherever they stop in the process, why they stopped. They didn’t like the area?  Too expensive?  Too small?  Dirty?  Found something better—what was it?  Ask them to be honest with you. Even if you can’t fix these things it gives you information that will be useful the next time you buy an investment. Ultimately, you may need to lower the price or wait it out.  By mid January people are looking again. 

@Sinead MacFhionnlaoich I’m pretty much in line with everyone else, I’d just like to change the tone. Tell them you appreciate them and they’re great but unfortunately you can’t do that. At most do as @Bruce Woodruff suggested.

Personally I think it is just bad precedent. It’s a weird request. Most people would just move. If they asked you with their hat in their hand sort of thing and you feel generous you could offer to give them three months to move and you’ll make some sort of concession at the end, like give them a rebate, but I wouldn’t change the the monthly rent. 

Hey @Justin Rockitter I buy houses in Rochester NY. I get wholesalers constantly acting me all the time. Bring a good deal and you’ll be taken seriously. 

I guess you’d know better than I would but a 70% wash-out rate seems really low to me. Even so, they ought to share that up front, “In my estimation 70% of you are throwing your money away.”  But like MLM they are selling dreams and people pay big for dreams.

I’ve paid for education. Who knows I may pay for syndication education (haven’t done that yet), but I know that I’d likely monetize that investment. Heck I’m not even totally against selling dreams. Even Coca-Cola does that. But a bottle of Coke isn’t 50k. 

I take issue even with actual “gurus” who market to people off the street, selling mentorships or coaching that costs tens of thousands of dollars. These people will be buried in this debt for years if they don’t succeed and I’d say that describes 97% of them. And before someone sanctimoniously points out that that sounds “truthy” without any data, I’d like to challenge them to prove me wrong. It’s a guess. But it is a guesss on seeing many people dabble in investing and drop out. It is a guess from seeing people pay for these programs and never succeed. (It’s hard!) It’s a guess based on having countless wholesalers contact me that are clearly coming out of some training but never able to produce a deal. It’s a guess based on seeing people trying to get deals or flip homes and failing. It’s a guess based on sheer math that one team keeps rolling into town every six months or so selling very expensive wholesaling programs and we would be overrun with wholesalers if even 10% succeeded.

Yes some will succeed. But that does not justify marketing to people off the street, for whom 10-50k wasted will mean real hardship. 

What a nightmare!  I’m sorry!  Find a new CPA immediately and have home file all the missing tax years. That is about all you can do. 

I don’t know what was in it for him, but this is just another example of how you have to be on the lookout for your own interest. There are many helpful people out there but also many who will just take advantage of you—other investors, real estate agents, partners, contractors, wholesalers, gurus, and on and on.  Never just assume, even when someone assures you they are on your side, that they truly are.

I’m not saying be a total curmudgeon. We’ve all got to trust others at some point. But we need to be prudent and if we are we’ll minimize fiascos like this. 

Hi @Alejandra Villa I buy houses in Rochester NY, both hold and flip, been doing it for many years and @Josh Robbinsis right.  Like most cities there are better areas and worse area.  And it can sometimes vary street to street and block to block.  If you are not local I'd stay away from the high cash-flow D areas.  These are areas where you'll see a lot of boarded up houses, others occupied but in serious disrepair, high crime areas.  C class are mostly occupied, in various conditions, higher crime.  B areas are mostly in good condition, a mix of rentals and owner occupied.  A are virtually all in excellent condition, few are rentals.  I'd stick with the best homes in C class areas or in B areas.  A areas might be difficult to cash flow.