All Forum Posts by: Patrick Senas

Hi @Gregg Watkins,

Thanks this process wasn't as difficult as I imagined. Definitely nerve racking though!

So I was discussing this with my realtor who is also a landlord, he was thinking my unit is within the range of $1900-2100. He recommended that I do a market test at $2100 to see if it can generate any leads and adjust my price point down depending on the results. I'm just not sure how to interpret the results that I do have. 

Doing comps is definitely a weak point of mine. It's more comparable to the 2-3 bedrooms in the area but obviously with less rooms. As far as rents, how much more value is another bedroom? If I find a 3BR comp, how much should I deduct from their asking price per bedroom. Also, I've also heard that posted rentals aren't exactly an accurate way to measure the market. Is there a way to find out the value of rent of the occupied units in the area?

Hey Jon, I originally wanted to be a hobby REI but I figured why not make it a business? My biggest fear is not dreaming big enough and setting up my business to be scalable. I tend to be overly cautious and stay within my current limits, financially and emotionally. This first deal I'm scheduled to close in 10 days and it's been a wild emotional roller coaster haha. I'm currently learning the importance of setting up systems and just discovered Michael Gerbers "The E-Myth Revisited" so it'll be a fun read.

I have my first property purchase underway. I close on a duplex in a college neighborhood in San Diego. Both units are 1 bed / 1 bath and I secured it using a VA loan. The closing date is 8/16. I wanted to get the ball rolling and started Pre-marketing the nicer unit on Monday 7/31. I wasn't sure what the market value for rent was but I definitely set the initial price point high. For a 600 sq ft, 1 bed 1 bath, updated kitchen, hardwood floor, W/D set, private yard, and ~300 sq ft covered patio I set the price at $2100. I honestly wasn't expecting any response at all. Within the first 1.5 days I got 4 leads. This past weekend I had a few more and a scheduled viewing for tomorrow. I contacted all the leads that came in earlier this week but I haven't gotten a response back via phone or email. So I guess they lost interest. So does this validate that the price I am requesting is an honest value? Should I continue to market it at this price for the following week? What metrics do I use to determine if I need to drop the price or not? Thanks for your continued support BP!

Hello BP, I placed my first rental on the market a couple days ago. The home is still under contract and my realtor recommended that I post it now to test the market on how much to charge for it. I'm scheduled to close in 14 days. The comps don't even compare to this unit so it's hard for me to gauge market value. It previously rented for $1750 and I expect it to rent for $1900. So I posted it for $2100 on multiple sources to see what happens. I wasn't expecting anyone to respond but in 1.5 days I received 5 leads. I talked to one over the phone and promptly responded to the others via email and left voicemails. I haven't scheduled any showings yet. Does this mean that it's priced correctly? How long do people generally wait to adjust price? I want to have a renter lined up before I even close and the price point I started with was just a Hail Mary toss. Thanks! Pat

@Anthony Ciulla @Dan H. 

I will definitely take your advice under advisement. I'll run through some risk analysis to determine the right step to take. I don't mind going through the permitting process but if I do end up doing it w/o one and the city is willing to overlook it then why not. 

I'll check in with the city to see what needs to be done. Thanks for your input!

Hello BP!

I have my first purchase, a duplex, under contract and am looking to close by the 18th of August. I chose this place because the back unit is enclosed in a 6ft brick and wooden fence with a private yard. It also has a large attached covered patio / open air living area that has a basic roof and partial walls and windows. The entire patio is around 11' x 41'. Its decked out with ceiling fans, water & gas hookups for W/D, and electric outlets.

My options for this space is to either convert it to a studio or 1 BR,  or just add it as a second bedroom to the back unit. I haven't checked the zoning of the lot but a 3rd unit may not be the right option (legally). Adding another bedroom would increase the total square footage of the home, which would add value along with an increase in property taxes. I'm looking at holding long term but as an exit strategy, if I had to sell I obviously want the added value. 

What would you seasoned REI vets do? 

1. Go through the permitting process

2. Hire a GC and do the work w/o a permit

3. Hire subcontractors direct w/o a permit since most of the structures already there.

In my inexperienced opinion, the minimal work required is to close the space by adding onto the exterior walls. Finish ceiling. Add a wall for the BR. Add a closet. 2 exterior doors, 1 interior door. Remove a window and patch it and to add an egress window. 

I've always been told that as long as licensed contractors do the work to code then even if I don't get a permit now, when I do apply I wouldn't have an issue passing inspections.

Thanks!!

Pat

Hey @Cezar D.. From what I'm seeing the best strategy is to do flips or BRRR. It allows you to buy in cheap and then you make your profits from the forced appreciation. Though if you're going to use a VA loan for that then you need to stick with cosmetic fixes rather than full rehabs. That will limit your search and your profits as well. So it's up to you to see if it's worth it.

I was thinking if I do use an FHA with 203k or VA loan for a rehab. I need to find something that, after I rehab the place, will raise the value enough to allow me to refinance with at least 80% LTV rent it for a couple years and then offload it if I want.

Hey Bill F. Don't worry, I'm not relying on the BAH for financing. It's more like icing on the cake lol. I don't plan on leaving my day job anytime soon.

Jon Lee I wish we could meet up this week. Like I said in the PM, I'm currently out of town. Hopefully we can schedule something the next time you're out here, or if I take a random trip to LV I'll reach out! Thanks for all this great information and POCs. All of this is such an eye opener. I definitely need to learn more about financing, other than normal bank loans.

Kevin Phu , still working on getting a rating. So I'd have to pay it unfortunately.