All Forum Posts by: Philip Williams

Looking for some opinions and advise as far as pricing a unique air bnb. I came across a potential flip that the numbers seemed great on, but when I ran it as an air bnb, even conservatively the numbers were much higher than I expected. The particulars of the house include about 3400 sq ft up and down. The house will contain 5 bedrooms 4ba and sleep 14 adults, It will also have a movie room ie big screen recliners etc. A fully functioning arcade with 20+ arcade machines, 5 pinball machines, a handful of skeeball air hockey type machines and a retro gaming area. Did I mention the indoor pool and hot tub lol. I know this is very unique to the area and as such was hoping to get some helpful advise, opinions and anything else that you guys might have to offer! @Chris Youssi @Tim Jensen 

Age 35 I own 125 properties, the majority of which are apartments. I got my start at the age of 27 after researching ways to create generational wealth. 

@Nzinga Young I respectfully disagree completely with your post and I will outline some of the reasons why.

1. As @John Warren mentioned D class tenants pay late very often. Also true D class tenants very often do not have bank accounts. Expecting direct deposit from D class tenants is not something you can bring to scale. 

2. The area dictates what kind of tenant you are getting, I have had immaculately renovated homes in D areas and guess what I got D tenants as they are the only ones willing to live in those areas. 

3. If you aren't doing credit reports you don't even know if they have judgments against them by past landlords if they have balances sitting out there still needing to be collected. 

4. I have yet to find a D class tenant that could afford first last and a deposit.

I could keep picking your points apart but I don't think your actually in true D class neighborhoods. You mention they aren't dangerous neighborhoods, that in and of itself makes it more likely to be a C neighborhood. Also D class won't appreciate 25k a year unless the neighborhood is gentrifying I suppose. But again describing your neighborhood as extremely safe that just simply is not a D neighborhood. 

Some of the headaches....man this could take a while.

1. Rent never being paid on time

2. very high turnover costs as that tenant class is much harder on the property than you could expect.

3. lack of quality tenants during the application phase. You will find yourself bending your standards regardless of how nice the property is.

4. low to no credit score which again makes it much harder to screen

5. no reserves to lean upon during tough times. Think about tenants who not only don't have savings, but also don't have many things people rely on during these times to bridge the gap. They don't have a 401k they can liquidate or borrow against, they don't have friends of family to borrow from. A lot of this tenant class doesn't even have a credit card they can put groceries or gas on.

6. C- and D properties come in C- and D neighborhoods which means greater damage and risk to your property. Between tenants you will have a much higher risk of your property being broken into, having your air conditioner stolen, having a door kicked in to steal appliances etc. 

7. The inability to increase rents or get appreciation,as we have all heard real estate goes up over time as do rents. Well suffice it to say this happens much slower if at all in D neighborhoods.

As I'm sure you can guess I could go on and on ad nauseam. The simplist solutions to this problem is simply not to invest in those asset classes. I like many others started in that asset and still have the scars to prove it. I still own a few in those neighborhoods, less than 5% of my portfolio and the only reason being I cannot sell them for what I would like. Hope this list helps if you have any questions please let me know!

Funding was our biggest challenge when we started off. Finding the right bank is not as easy as it sounds, banks will make you jump through hoops then not fulfill their end of the bargain. It was ridiculously frustrating as a new investor. 

How about the more people that get sick and possibly die the worse it will be when we come back. 

You would probably be better off finding in person auctions to go to. For one Auction.com utilizes ghost bids to drive the price up, which is there way of drumming up fake interest. Second the minimums are almost never posted, I have been the winning bidder on the same house for 10+ straight auctions without ever winning the property. Third there is effectively no barrier to entry, the ease of which someone can register and bid online makes the playing field that much larger. Simply having to physically get a check and show up to a location slims down your competition by a large margin. I could go on and on but I think you get the gist by now Auction.com is by and large a waste of time and better, faster, easier deals can be found elsewhere. 

I didn't think this kind of spam was allowed......

This is the dumbest thing I have seen in a while good grief...….talk about slum lording

Well there was a lot of that nonsense going on before the crash....