All Forum Posts by: Bobby Paquette

"Did you know you have bed bugs?"  Sends me a picture of a tic.

There's a scary dog locking us inside, it won't let us leave.  Sends me a picture of the neighbor's 6 month old golden retriever.  Same guests, didn't send me a review luckily.  

I only provide Coffee, fresh croisants, 1/2 1/2, and some trader joe's sweets. Not alot, but they left me a  "Not welcoming enough" review.  So I bought a bigger welcome mat. No complaints since. LOL!

What's the difference in sq.ft and bed count requirements between STR and LTR?

Any sites I can gather this data besides AirDNA which charges $300/year even if I need 20 minutes worth of data.

Before you purchase anything from Myrtle Mike Thompson. Be sure to get the 1099 and monthly statements from a few units. Agents will have it. Avoid them if they can't aquire them or don't know. You can at least ask the listing agent yourself. I do all the time. It's perfectly legal. 

Can you post the CAP rate when you're finished?

First official post! Any advice on finding mentors in this field? I'm relatively new to Real Estate and got involved around a year back. Not really looking for networking, would be nice, but definitely not a priority. Does anybody know any good mentors or people who would be interested? Help finding where to find a mentor would also be appreciated! Thanks! 

I've owned a condo at the Hard Rock Hotel for a decade now.

https://www.redfin.com/CA/San-Diego/207-Fifth-Ave-92101/unit...

I can only speak for the HRH. They have been by far the best maintenance free rentals I have purchased. It's dedicated for investors. Items are fixed and maintained by the HOA or reserve account unbeknownst to me. Way less trouble than my house and even my traditional condo. In fact, I just sold my condo last week to buy another unit.

Info:

- The income split is 50/50 and includes marketing, cleaning etc.
- The city limits your stay to 28 days out of the year.
- Income is consistent year over year +- a few thousand or 5-7%?
- Returns 4.6% at current market value. Mine return 7-10% due to when I purchased.
- The property management company should have a system that evenly rotates all units. I can confirm that units at the Hard Rock Hotel average ~70% occupied and the 1099 shows all to be within $3k of each other no matter what level and type i.e studio, queen or 1bd.

Risk:

1) Income is based on tourism. I got crushed during covid. Break even for 2 years If I remember.
2) They can stop leasing the name Hard Rock and who knows what the outcome would be.
3) Like any condo, the HOA fees can skyrocket. Just don't put all your eggs in one basket.
4) Mortgage companies won't lend to these anymore after the recession due to them not being considered a "security" since you can't live in it longer than 28 days a year. Cash only.

If you think about it, it's weird to buy a condo or a house built to live in. It's like buying a car just to put it on Turo and never drive. The condotels changed my thinking on purchasing a house just to invest (not live in) and instead shifted towards multifamily. I'm now selling my SFH as it's a weird and useless style of investment since I never plan to live in it and never visit the area. You can easily multiply your unit count with a multi, consolidate taxes which your CPA will like and put everything under a single roof and pool of resources like maintenance and management. Single families are terrible unless you happen to already own and live in it and have to relocate. Then maybe.

As for traditional condos that you're never going to live in, a condotel makes more sense as you can stay in the condotel for 28 days out of the year. You're never going to properly time your traditional condo around the tenants departure. You'll be responsible for all utilities unles it's a fully furnished urban loft in downtown in which case you'll either pay the $500 utility bill or deal with maintaining all that yourself but I already have a 9-5 which is why I just sold my traditional condo. Imagine managing 10 of them? Paid utilities? Don't worry your tennants will charge up that bill. 

@Bobby Paquette I've helped many many clients purchase condotels in the Myrtle Beach market. The vast majority DO allow you to self-manage or use a third-party property manager... my guys charge 15-20%. Some will restrict access to commercial facilities onsite, such as a gift shop, fitness center, or tiki bar, but the pools, lazy rivers, and hot tubs (what most guests care about) are still freely available. My local lending partners have been financing condotels here for decades and offer in-house portfolio loans. One is often able to lend with 20% down but most will require 25%. I also have a lender who can finance condotels through a commercial loan product with 20% down and her current rate on a 7-year ARM amortized over 25 years is 6.5%... not bad! She can also close under an LLC name. Let me know if I can help with any questions. Positive cash flow is getting harder to find with the 2 and 3-bedroom units, but there's still a handful of buildings where a studio or 1-bed unit makes sense.

@Bobby Paquette, you think raising their rent $200 more per month, then on top of that charging $200 for the garage space? doubt ill see that money 

 3 units, $200 total is $70/Unit for storage, I dont know 

Hello BP, I'm currently in the process of purchasing a triplex. Offer accepted.

Doing the numbers my net cash flow should be between $500- $700 a month with the current low rents.

Im in New Jersey and the current rents are really low, but the area isn't the greatest.

Current rents are

2br/1 bath-$1050

1br/1 bath-$ 950 (section 8)

back apartment-

2br/1 above a 3 car garage $1050

The 3 car garage is also being used for storage, I believe from all 3 tenants

All tenants have been there for a while, all over 5 years and lease right now are month to month

I was looking at the Hud websites for the area and the FMV rent for a 2br 1 bath is $1471 and for a 1br 1bad $1140

Any suggestions on what to do.. I also would like to charge for the 3 car garage use, or have them remove their stuff, so i could store my personal stuff in there and save me 200 dollars a month for my current storage unit.

Thanks

In much of the research I have done I have been struggling to find rental properties that are going to be able to cash flow well in this economy. I am looking at investing for the long term and am okay with getting into a property that only breaks even or only has a small cash flow. At this time I don't have the capacity to try and work on a BRRR or other rehab projects and I am looking at investing in a turnkey property. My main questions are:

- What are your opinions on turnkey properties? 

- Are there any markets you would avoid?

- Do you have any helpful tips you would give to new investors?