All Forum Posts by: Nicole Masters

Hey Ryan! Welcome to your real estate investing journey! 

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $1,084,000
Cash invested: $216,800

We bought a 5 bed/3 bath 4,400 sq ft cabin in North Fork California. It was previously operating as a STR by owners who lived on the property and managed/cleaned it themselves. Most furnishings were out dated, so we implemented systems, updated furnishings, and raised the prices! The previous owners grossed about $112,000; and we're hoping to almost double that.

We've been barely breaking even since we bought the home in December, but are expecting our summer months to gross about $20,000.

What made you interested in investing in this type of deal?

My husband and I already own a STR in Joshua Tree and were looking for a mountain type property for our next STR. We also wanted a home that slept 15+ people as we think this will give us a unique advantage over other homes listed anywhere near them.

How did you find this deal and how did you negotiate it?

Our partners found this deal and brought it to us. We are split 50/50 on this home, and we met the at a local meetup in the area (just goes to show how much worth networking can bring you)! They originally brought the deal to us because we had stayed in consistent communication with them and continued to check in on their investing journey. We negotiated the price down from $1,250,000 to $1,084,000 because of expensive issues that came up in inspections.

How did you finance this deal?

This was actually very tricky! Because the home is on 8+ acres and is such unique property we had a hard time finding financing for the house. We originally had a DSCR loan that fell through part way through escrow. My husband called over 12 lenders before he found one willing to give us hard money. We ended up putting 20% down (10% for each couple), 50% hard money, and 20% seller financing. We're interest only for 18 months and will need to refi at that point.

How did you add value to the deal?

We added value by updating the furnishings, integrating systems, raising prices, and improving the overall functionality of the house as a business operation.

What was the outcome?

We purchase the house (the wife in the partnership and I are both realtors so we were able to represent ourselves and use the $30,000 commission towards the home). We've been booked for every weekend since we purchased the home!

Lessons learned? Challenges?

A tonnnn of challenges. We've had some really large maintenance expenses come up; $10,000 retaining wall, $9,000 water filter system, $1,000 hottub repair, $5,000 roof and car port repairs, etc. The most challenging part has been commuting back and foth (3.5 hour drive each way) every week to work on the property as it is rented out on the weekends. We are outsourcing a ton, but still wanted to bring the design element to it ourselves. We're still learning the lessons haha.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

We were the agents on the transaction, but worked with an incredible hard money lender that made this deal happen for us!

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $1,084,000
Cash invested: $216,800

We bought a 5 bed/3 bath 4,400 sq ft cabin in North Fork California. It was previously operating as a STR by owners who lived on the property and managed/cleaned it themselves. Most furnishings were out dated, so we implemented systems, updated furnishings, and raised the prices! The previous owners grossed about $112,000; and we're hoping to almost double that.

We've hit some road bumps along the way with major weather issues and a new $9,000 water filtration system. We had a storm that caused roughly $10,000 in damages as well. We've been barely breaking even since we bought the home in December, but are expecting our summer months to gross about $20,000.

What made you interested in investing in this type of deal?

My husband and I already own a STR in Joshua Tree and were looking for a mountain type property for our next STR. We also wanted a home that slept 15+ people as we think this will give us a unique advantage over other homes listed anywhere near them.

How did you find this deal and how did you negotiate it?

Our partners found this deal and brought it to us. We are split 50/50 on this home, and we met the at a local meetup in the area (just goes to show how much worth networking can bring you)! They originally brought the deal to us because we had stayed in consistent communication with them and continued to check in on their investing journey. We negotiated the price down from $1,250,000 to $1,084,000 because of expensive issues that came up in inspections.

How did you finance this deal?

This was actually very tricky! Because the home is on 8+ acres and is such unique property we had a hard time finding financing for the house. We originally had a DSCR loan that fell through part way through escrow. My husband called over 12 lenders before he found one willing to give us hard money. We ended up putting 20% down (10% for each couple), 50% hard money, and 20% seller financing. We're interest only for 18 months and will need to refi at that point.

How did you add value to the deal?

We added value by updating the furnishings, integrating systems, raising prices, and improving the overall functionality of the house as a business operation.

What was the outcome?

We purchase the house (the wife in the partnership and I are both realtors so we were able to represent ourselves and use the $30,000 commission towards the home). We've been booked for every weekend since we purchased the home!

Lessons learned? Challenges?

A tonnnn of challenges. We've had some really large maintenance expenses come up; $10,000 retaining wall, $9,000 water filter system, $1,000 hottub repair, $5,000 roof and car port repairs, etc. The most challenging part has been commuting back and foth (3.5 hour drive each way) every week to work on the property as it is rented out on the weekends. We are outsourcing a ton, but still wanted to bring the design element to it ourselves. We're still learning the lessons haha.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

We were the agents on the transaction, but worked with an incredible hard money lender that made this deal happen for us!

How are the zoning and laws there regarding so many units on one parcel?

 Oooh a good waffle cone is the best! I hate the cheap sugar cones though, then I would do a cup. I lovvve vanilla when it comes to froyo or my yogurt choice with fruit. Versatile and classic!

The Sac market is booooming. There's not a ton under the 500k price point anymore. We househack (rent by the room) here locally in Roseville and we have two STRs in other markets in California. 

Chocolate chip mint or cookie dough :)

Hey Josh! What you're seeing is commonly referred to as a "halfplex". I started noticing it a handful of years ago around here (Northern California). There's still a lot of great options out there for duplexes though! Just keep looking :)

Hey Adam! I may be the one going against the crowd, but here it goes! 

My husband and I live in an expensive market (Sacramento California) and we have a 6 bedroom/3 bathroom house where we live in the primary bedroom and rent out all of the rest of our bedrooms meaning we have SIX roommates. Now, what we do is on the extreme end of things, but it works great for us! We have the primary bedroom, which has an ensuite bathroom. So the other two bathrooms are split between the other 6 roommates. (it's about one too many people for one of the bathrooms honestly, I would say 2-3 people/bathroom should be your max).

As far as the kitchen goes, make sure whatever house you pick has some type of pantry/cupboard space where you can give everyone their own labeled shelf. This is where our roommates keep their food, special spices, etc. It's a space they can put whatever they want and know other people won't touch it. Everything else outside of these labeled shelves is communal. We share plates, silverware, cups, spices, pots & pans, etc. Same thing with the fridge. Give everyone at least one shelf that's just theirs so they feel confident knowing they'll always have a spot for some of their stuff.

If you have any questions I'm happy to share details! Feel free to send me a DM or text me at my number below :)

Hello! Update, the meet up will be happening tonight Tuesday April 11th due to a scheduling error from the venue last week. 

We will have 3 local STR owners speaking :) DM me with any questions!