All Forum Posts by: Nathan Grabau

I use smart move and have been happy with it. They offer a range of services from just a basic credit check, to a more advanced income check and criminal history search. 

People are talking about Helocs now to protect their lower rate on the first position mortgage on the house. Before this, the main reason I used a heloc was to have a higher LTV limit for a cash out transaction.

Like @Andrew Postell said, you can use the Heloc as a line of credit that you pull and repay. Personally in these weird times, where financing markets are getting stretched thin, I would not recommend not paying it back and holding cash, because banks could/ are starting to close helocs to new withdrawals.  

They pay the lodging taxes for you. So when you stay at a hotel you have the nightly rate, then you have a sales/ lodging tax you will pay. Airbnb/VRBO collected and sends this for you(in most cases). They do not collect money that is used for income/ corporate/ self employment taxes. 

You can charge pet rent, a pet deposit, or both. You can also not allow pets in their entirety. That being said, you cannot ban all animals, because you cannot ban service animals from the property. There is virtually no way around this, unless you for example are renting a room, and another tenant, in the same unit, has a deadly allergy to a specific animal type. 

You can recover damages from a security deposit, but you cannot recover normal wear and tear. General rule of thumb I have heard is that carpet in a rental is expected to last about 5 years.

The real fix here is buying premium higher traffic resistant carpet, or converting to a hard flooring on your next replacement, like LVP. 

The closing date on your cash out refi will trigger another year, unless you have a substantial life change. This is going to be lender specific, but I was able to do another primary purchase 9 months after a refi because I got married. There might be some wiggle room, but I would operate under the assumption that you will have another year, from the refi close date, before you can do another primary loan. 

I would avoid Detroit, I won't invest in markets with declining populations. This undermines the core of my thesis for RE which is that we have a housing shortage that will propel growth over the next decade. 

I would rather be in Birmingham than Cleveland, because I think Cleveland has experienced a lot of appreciation for a cashflow market and I would be concerned that future growth has been pulled forward. 

I would also add the Ames area to this list. My Realtor, is also my property manager, and has a few hundred doors himself. He has made buying there a breeze, helping me with even getting lending from a local bank with great terms. If you want me to introduce you to him send me a DM!

Ultimately in RE, time is the most important part of what we do, and as long as you put the correct growth expectations in your projections, you will make money. In your long term numbers, I would put a minor decline(-3-0%) in rents and appreciation for Detroit, minor to flat(0-3%) appreciation for Cleveland, minor appreciation(2-3%) for Ames, and minor to average appreciation(2-5%) in for Birmingham.  

We are seeing activity in Colorado pick up in a big way. Starting to see properties with multiple offers within days of going on the market again. Hopefully people locking while rates are low right now will carry us for a few more weeks until we get some more economic data to bring yields down more! 

Medium term rentals do not count as active income. One of the conditions for the active income in STRs is your average stay has to be under 14 days. 

I would comp MTRs on Furnished Finder! You can get a good idea of what people are charging, the quality of your competition, and occupancy when you look at "available now" vs "available xyz". 

I am really excited about MTRs in our market (Colorado), but that is because of all the regulatory issues surrounding STRs. 

You can subdivide utilities, but this will likely involve new meters and full house replumbs/ rewire. In AZ, it will probably be very expensive to get a second water meter. I pay water on a few of my properties and you can charge some of it back, but I would assume that this is something that you will not be able to recover in your underwriting. 

I would call USPS about the address. They are always hit or miss, but I have heard this is not as bad as other tasks. 

If you actively participate in your STR, there are tax strategies that let you take this as active income, which allows your to deduct it against your active income.

The primary first step I would take if I were you is run the numbers and see how much more money you can get as an STR. There are some markets where this gap is big and others where it is smaller.

If you are running an STR, you will have to put more effort into the property, but many of your systems can be automated with services like guestly for hosts or pricelabs. You also are, or someone you pay is, on call virtually 24/7 to handle concerns at your property. I would think about the level of service you want to provide at an STR as being comparable to the level of service you get at a hotel. If a TV remote's batteries die, you need to hope you have batteries. If someone's bed sheets or the shower is not cleaned well, you need to coordinate to have your cleaners back to the property ASAP.

Generally as you think through the time commitment, the most efficient hosts I know spend between 30 minutes and 2 hours a week managing each STR they have, that being said, there is a reasonable amount of leg work to get things like automated messaging/ automated cleaning set up!