All Forum Posts by: Neal Collins

There are typically good business planning workshops that you can attend in your town. Don't be discouraged by opinions here, they are just trying to help you be optimistic. If it was that hard then no one would open a coffee shop...and we know that simply isn't the case.

Do your due diligence. Create a budget. Know exactly how much it'll take to secure a property. It's not just all furnishings and an espresso machine. Think insurance, payroll, unemployment insurance, and the list goes on and on, but at the end of the day just be prepared.

Those rules aren't the best guidelines to go off of in Portland. It is a unicorn where you can buy a duplex and hit the 2% rule right now.

When looking at the rental rate vs. property value you need to look at market rental rates. So if you only pay $500, you still need to know what the unit would rent out for and use that in your analysis.

@Sean Ade The 203k Loan is a great solution for this and will help you build equity. I see more people want a fixer so that they can make improvements to the place and increase equity, and then get stuck when they realize that they don’t have the cash resources to do the work. They then have another realization that “sweat equity” is actually hard and requires tools, time, and a know-how in order to do the job right. When you’re under contract you’ll come up with a scope of work and budget, submit it for approval to the lender, and you’ll be able to make draws once you’ve closed and started the project. Best thing is that these funds roll into permanent financing and you don’t have to wait years to save enough money or get motivated to actually redo that kitchen.

@Seth Mazur I’m interested. Let’s connect.

@Caleb Carlson Starting a PM company is no easy feat and will require you to wear many hats until the time comes that cash flow will enable you to take on more help. In my experience it is a pain to scale, but once you get to a nice amount of doors and you have the right people in place it can work very nicely with other businesses like brokerage, investing, cleaning, maintenance, contracting, etc.

@Cole Martin If you're going to pay for advertising, I'd go for VRBO instead of CHBO and then list it on VRBO and Airbnb.

As for the year-long rentals---yes, that is exactly what I'm saying. Otherwise you run the risk of too much vacancy. On top you need to command a premium because it is a lot more work in terms of coordination.

Our definitions of "investment-grade" furnishings are probably different. If you buy cheap furniture expect it to break more often. A lot of people will argue on price, but start to do the math on how much beds, frames, sofas, tables, chairs, TVs, rugs, art, kitchen supplies, and all the other nick nacks cost and it is not cheap.

@Cole Martin Also- Save your money with CHBO. It was a complete waste of money for us with very poor leads. Not one came from them.

@Cole Martin We have gone down this exact same thought process and have experimented with that niche. Here’s some of our learnings that will hopefully help you out. We did corporate rentals on very desirable apartments close-in in Portland. 1. Corporate rentals are virtually Airbnb’s now. Companies will reserve them over “corporate rentals” as a category. So expect lots of competition. 2. Try to avoid vacancy as much as possible. If you are just going to go month-to-month then you need to be very diligent to make sure that you market the heck out of it because dates don’t match up very well, and the opportunity cost of a month vacant is quite high. 3. It’s not that much of a premium you get once you capitalize not only the initial furniture, but aleo the future replacement as it does wear out quickly from the hard use. All in all can it be a profitable niche? Yes, it can. What I would do in order to setup success would be to have a company tee’d up (or several) that you can say “I’ll deliver this product if you will sign a long term lease.” Give them a good deal because you ideally do not want to go month-to-month. I’d be curious if anyone has diferent experience with them. Maybe it’s just our market. But maybe not.

@Jennie Jones Cozy will be one of your better options

Awesome job @Alex Van Slyke. Nice way to take action and get in the game.

How's the rental market in Seaside?