All Forum Posts by: Miguel Del Mazo

Quote from @Tod DuBois:

Looks like everyone is using some software tools for various tasks, I'd not heard of most of them. RentRedi, Avail.co, tenantbackgroundcheck, all new to me. All cost money so add to overhead but it's time to do something. I did buy a website which was expensive and produced nothing, still trying to decide what to do with that sunk cost. I guess the question turns to which set of tools is optimized to medium term. I looked at Doorloop but zero integration with FF, AirBnB and VRBO where most of my leads come from. I would want to automate the marketing and channels - which would be where precisely? Craigslist, lol? How do you push your listing to multiple channels is the first job, then automating lead processing second. 

Avail costs $9 a month per unit with no start up costs or annual contract which isn't bad. It will push out your listing to multiple sites in the apartments.com family, but those leads have always been very low yield for us. Most of those served there are looking for unfurnished LTR. 

While outsourcing overseas may be tempting, I would recommend nailing down your processes prior to teaching someone, or you'll wind up with their processes, at best. 

I agree with everyone above that there are more efficient ways to turn FF leads into residents.

We use Avail.co (not "dot com") to manage our rentals. After communicating with a prospective resident (Google Voice #, usually by text), with just a name, telephone number and email, the applicant can pay $55 to provide us with a background, eviction and credit check. Upon passing these checks, we can use a state-based lease template or re-use one we've already adapted with our specific lease requirements. Avail sends this to the resident, collects rent and deposits it into our account. I believe Buildium does all of these functions as well. 

While the vetting of residents is greater with FF over an Airbnb or similar platform, I think Airbnb overcharges for the increased convenience. 

Quote from @Kwanza P.:

Quote from @Miguel Del Mazo:

Knowing more about the area, it sounds like you'll have an ideal avatar of wealthy, young and trendy professionals that aren't ready for or looking for a home to own. This demographic is projected to keep increasing over time, so I would do whatever you can to hold onto this property (ie cash flow well).

Furnishing 700 sqft with PB or West Elm (you and my wife would get along great, Bonnie) won't be price-prohibitive and well worth the cost. After assembling a lot of bed frames, I prefer the Zinus brand, and I would recommend contract grade furniture.

Don't forget to sign up for pest control and both a renter's and landlord policy on your insurance.

Hi Miguel - I’m also looking at the midtown 

 Sacramento area for multifamily…what is “contract grade” furniture please ? Also, can you say more about landlord vs renter’s policy on insurance ? Why both ? Can landlords require a tenant to have renter’s insurance ? Thanks, Kwanza 

Contract grade furniture is designed to sturdier while still being fashionable. West Elm, Pottery Barn, Crate & Barrel, and Wayfair all have these options. Minoan.com can also be a resource to find it. Hotel grade furniture will often be sturdy, but less aesthetic. 
You will want to insure a number of things as an MTR landlord: your interest in the building itself (owner's policy), your contents (owner's policy), your interests if a renter or guest is hurt on-site (landlord policy), and possibly flood, wind, lost-income policies. Talking to a good insurance broker can help clarify these insurance needs. There isn't "MTR" insurance that I am aware of, so you'll want a hand in crafting it. 

A landlord can require a tenant to obtain an insurance policy as part of the lease. We use Avail.co to manage our leases, and it's a simple box to check to require tenants to get a policy. Since our residents are traveling "light" to a furnished property, their coverage only costs a few bucks per month. 

I would recommending looking at your property through the eyes of the NBA, or Next Best Alternative, to see if there is a market for you property as a mid-term rental. 

Go on furnishedfinder.com and airbnb.com to find what is available on those sites for a traveler. If there are plenty of studios or private single rooms at the same price or cheaper than a shared-space room at your place, you will definitely have a hard time filling up.

Are there extended-stay motels in your property's area? If so, what are they charging per week?  They are the most likely competitors for work crews passing through. Even with a shared bathroom and living room, your place is likely much nicer than the average extend-stay motel, so if your rents are competitive, then you can likely serve this avatar.

You may find that a 5/2 is an acceptable temporary housing solution for a family displaced after an insurable loss (fire, flood, etc.). Getting these listings ca be trickier, and there is no fast lane that takes you to this destination. Definitely list your property on ALE solutions, United Corporate Housing, Alacrity and similar websites for companies that place displaced homeowners.  

In our largest listing, we have a triplex with a total of 11 beds and 10 baths with each bedroom set up to be potentially rented by the room (electronic lock on each bedroom door, and most with a private bathroom). We have had much greater success renting a whole unit out that renting our individual rooms, though it has been nice to have some flexibilty to accomodate travelers who are coming as singlets and doublets.

Slumps suck.

Every single time we have a vacancy coming up, I get nervous. Realistically I know that we have built into our assumptions that there will be a certain amount of days in our properties that we will not be able to bill for (and we are well below that number), yet I still worry. I can't imagine the stress that must come at the end of the semester, especially the spring semester, when students finish up their studies and move out, in unison. If I may, let me offer some tactical advice and then some unsolicited general advice.

Tactical advice: marketing to traveling oil industry workers probably isn't radically different than what you have been doing to get your rooms filled with students. Both groups are showing up with a clear purpose, need a good night's rest and want a safe place to live close to where they work/study.  You probably don't need to change your interior design or furniture, and you already have the pots/pans/dishes and amenities needed to drop in a student or a traveling tradesman. Take a look again at your FF and AirBnB listings to see if there is any room to shake up the description to show off that you understand the needs and wants of travelers.  That could be as simple as changing the description to highlight how close your units are to the refinery as opposed to just the college. Do you have a "mudroom" you can add to the description? That might be especially attractive to folks who want to shed the clothes they wear at work to keep their living space more clean. Basically, be willing to look at your listing through the eyes of your target avatar. Since you know who you want to serve, try to tailor your listing to make it easy for them to say, "yes".

General advice: MTRs are attactive to a lot of people because of the increased cash flow, but it's the appreciation over time that really generates wealth in real estate. You have multiple properties in a great market that are wonderfully placed for appreciation in the future. If you can hold onto these properties over time (ie cash flow sufficient to not lose money), you have already "won".  Any cash flow in excess is gravy (on the poutine, I would guess). With that said, here are some questions I would ask myself about the situation: 

Historically, have the students paid enough in the 9 months to cover all the expenses associated with these properties? Would switching to targeting refinery workers endanger your ability to attact students in the future (a break in the word of mouth advertising, for instance). Do you have to commit to only serving one type of resident over the other? Do the refinery workers have a union or a company HR department that can be reached to advertise to directly?

I am running around this morning, so I feel like the above is a bit disjointed. If so, my apologies.

Quote from @Eli Edwards:

@Jamie Banks I was approaced by a Relocation Specialist last week to rent out my home. I gave them a rate of 3x rent and is actually reasonable for the market. They said I am the only one in the area that can provide for this family. In your experience, how quickly do the insurance companies approve these for the family? I would assume these can get the ball rolling very quickly due to the circumstances. Thanks in advance!

 In our experience, insurance relocation companies are very responsive and professional. They get paid when the family is happily placed, so it's in their interest (and yours) for the family to be accommodated quickly. 

Most of the time, the family will want to see the home prior to agreeing to staying there. Don't be surprised if the insurance company has the family provide the security deposit. Congrats on being a unique offering for the area. 

Knowing more about the area, it sounds like you'll have an ideal avatar of wealthy, young and trendy professionals that aren't ready for or looking for a home to own. This demographic is projected to keep increasing over time, so I would do whatever you can to hold onto this property (ie cash flow well).

Furnishing 700 sqft with PB or West Elm (you and my wife would get along great, Bonnie) won't be price-prohibitive and well worth the cost. After assembling a lot of bed frames, I prefer the Zinus brand, and I would recommend contract grade furniture.

Don't forget to sign up for pest control and both a renter's and landlord policy on your insurance.

There are a lot of options with a 6 unit building, and I agree without more details that it will be hard to offer any specific advice. 

Using Rentometer or BP rent estimator to get an idea of the LTR rent makes a lot of sense. I'd try to fill at least a few spots to get some income coming in, and then do a rolling conversion to MTR as you have the cash to outfit a unit with everything an MTR needs. Most folks overestimate the cost to prepare a space for MTR, but you'll figure out cost-savings and improvements with every iteration. Doing 6 at once will deny yourself that improved learning curve. I don't know much about STR, so I'll hold off on any advice there.

If you do MTR, really think about who you are trying to serve. Who would come through the area as a singlet and want to stay at your place? Focus on giving them a great experience. You don't have to be all things to all avatars... Just be the best for those who would want to come to your space. 

Om rrandom bit of advice: you might be able to get by with 1 high-speed internet account if you use aseries of good Wi-Fi extenders, like Eero. 

So, it's the season of Advent with Christmas around the corner. Hopefully all of your residents are feeling merry.

While Santa does need to give 24 hours notice before going down a chimney into a resident's space, does he have any plans to leave a present at your properties?

Even though we try to get to know our residents during their stay, it is probably impossible to truly personalize a gift for each of them. However, everyone's gotta eat, so we'll be giving restaurant gift cards as a "thank you".

Do y'all have any plans? (Maybe something bette rthan a gift card that i can steal...err...borrow?)

I agree there is some risk with the PadSplit model. Zoning, insurance and the Fire Marshall are areas of MTR where it is much better to ask permission than forgiveness.

With that said, PadSplit should have someone who can guide you in what is allowed in the area if they serve it. Don't take their unofficial advice as gospel, so do appropriate due diligence prior to making changes to the property.