All Forum Posts by: Colin Reid

You can ask whatever price you like. If you find a buyer that's paying cash, and is willing to pay your price, then you're golden.
The problem is most buyers will be getting a loan, and no lender will lend above the appraisal.

I'm looking for different levels. 

Step 1 is covering my current lifestyle, which is far from extravagant.

Step 2 is my desired lifestyle. No major changes to the day-to-day, but waterfront property isn't cheap. Slight improvements to vehicles and current or future hobbies, but I won't suddenly have a brand new Benz or designer clothes. That's not my thing.

Step 3 is the Jet. I'm a pilot by trade, and deep down we all want our own plane. something in the $1.5-3m range will do nicely. Small enough to be economical and fly on my own, fast enough to beat the airlines anywhere in North or South America.

Welcome!

I wouldn't worry too much about timing of getting into the "landlord biz" right now. I had similar concerns with the property I just bought in April, but I had 5 applicants within a few days of putting it up for rent. 

A concern is the low cashflow. I don't know how you're calculating your numbers, but $93 is pretty thin. I aim for $200/door, but that's just me. I don't plan for market appreciation when I analyze a property, but it also sounds like you have some opportunity for forcing some appreciation.

More concerning to me is the college town aspect. If the college is the main source of income and tenants in the town, that's worrisome. It would have been bad enough before COVID, but now many colleges are severly cutting live classes, and going more and more online. One university near me has cancelled all classes until 2021 already, except for online programs. If you're counting on the college town to supply tenants, this might not be the year for that.

Welcome to BP! I'm a recent AF Vet, and started out much the same way. I had three SFRs in small Air Force towns when I got out. I dodged the cold dark north (Why not Minot? Freezin's the Reason), but got my share of the dusty bright southwest.

At the risk of assuming rank and sounding like a crusty Captain lecturing an Airman like his dad, DON'T TOUCH YOUR TSP! Keep funding it, (if you're on BRS, go at least to the match) and save for REI separately. Travel vouchers, bonuses, and deployments are great ways to boost your savings, and mostly tax free.

Good luck, and welcome!

I'm solidly in the @Joe Villeneuve camp, for all the reasons he's listed, and for the eloquence he used that I couldn't.

One reason I don't pay anything off early is the small gains it would accomplish. For your $100k property, 80% financed at 3.5%, you're paying $359 in Principle and Interest. If it's a 1% rule property, you're grossing $1000/mo. Good Job! but your cashflow isn't $641, it's more like $1-200. You've got a lot of fixed expenses mixed in there. The other half of the mortgage payment, Taxes & Insurance, maintenance reserves, management fees, utilities, etc. Paying it off only increases your cashflow by the $359. That's not much, especially when that $80k could have grown, been leveraged, and/or compounded elsewhere, rather than sitting in a hole in the ground and hoping for market appreciation.

The other one that hasn't been addressed yet is the advantage long term debt has against inflation. My P&I will never increase on a fixed rate loan, but the dollars I use to pay it will become cheaper. Fixed rate mortgages are little financial time capsules. Today, your $1000/mo mortgage payment might seem like a huge burden when you're making $50k. But in 20 years, if you're at the same level in your field, but making $100k, that mortgage payment will feel a lot easier to pay. The dollars are cheaper, and we have more of them in the future. 

Why not both?

Can you qualify for an FHA or similar low down payment loan for a personal residence? Even a single-family or a condo? Learn the techniques for analyzing deals and apply that to your home search. Buy that home, possibly rent other rooms out to do a "mini-house-hack," then do it again in a few years. Save up, buy next place (maybe that's a multi) with owner-occupied financing, rent the first house out.

Three of my five doors have been my personal residence, except I didn't know how to analyze deals for the first two, so they're not amazing performers. I wasn't even thinking about rentals when I bought those, and I didn't know what I didn't know. You have the advantage that you can learn deal analysis before you buy your first property!

Wow, that's way easier than I thought it would be.

I'm in Pinellas County, trying to expand my multifamily holdings, and it's tough to ignore the beach. Once you're at the beach, it's tough to ignore the allure of vacation rentals and the profit margins they have. I have read everywhere that Short Term Rentals, i.e. Airbnb, VRBO, etc are extremely difficult in many parts of FL, but especially in Pinellas County. Gulfport allows them, but SPB, Treasure Island, Clearwater, etc don't, and can be down right heavy handed in their enforcement according to some accounts. I'm aware of the status of the local law with regards to the state law, and that grandfathered STRs can continue to operate. 

Ok, now that all the reasons we can't do it are out of the way, how do we get around them? I know there are STRs in these beach communities, and I'm certain some have traded hands over the years. Some are probably operating illegally, and there might be some merit to that, but I'm looking for legal methods first.

Do you operate as a hotel? How tough is that process, and what kind of costs am I looking at? 

Is there some other permit to obtain? 

EDIT: Mods, I posted this in the wrong spot. I meant to post in the St Petersburg Forum. Would someone mind moving it? Thanks!

I walked away from one a few months ago. Looking for a 2-4 unit to hack, so there was some of my own preference tied up in it, rather than just cold hard numbers. But the sellers were crazy high, asking well above the best comp in the area for a house that hadn't been updated since the 70s. I tried everything. What's the sellers' motivation? Hey, they've only owned it 18months, we can delay closing to avoid short term capital gains, etc. I researched the sellers themselves, and they'd played some stupid games with their real estate before.

 I was stupid to make the offer that I did, 21% below asking. They countered at 5% below, which I just couldn't work. Even as a vacation rental, the numbers wouldn't work at that high of a price. So I walked. It eventually sold about 7-8% below asking. I drive past it from time to time, still wishing I had been able to make it work. The deal I ended up getting is a better business move, but less comfortable home for me.

Originally posted by @Russell Brazil:

Youll want to make sure that the dead mans spirit has passed on and that he isnt currently haunting the house. If it is haunted, just call in a ghost exterminator, specifically I recommend Ghostbusters

 You joke, but I did live in a haunted house in college. I'm not a big believer in the supernatural, but I know Sherry died in the house, and disclosure is not required in FL. We found out from the neighbors. She'd mess with our electronics (stereo would turn on randomly in the middle of the night, full blast on a spanish station we'd never tuned), and broke a toilet while no one had been home in weeks during summer break. We ended up burning all her mail (the post office kept delivering it, despite our efforts) and the odd events stopped. Ghost Busters didn't have a location in Volusia County.