All Forum Posts by: Brad S.

This one is easy. For me it doesn't depend on any further info, except if there is a compelling reason to have the lawn area in place of the garage. 

Otherwise, renovate the garage into a man cave, while keeping the garage elements to easily convert back with no or minimal cost in the future. Best of both worlds!

Insulate, add electrical, mini-split ac, and possibly plumbing, as desired, drywall, tape and paint, put built-in cab's on one side if you want, hang the tv, speakers, etc, install bi-fold/multi-fold doors on the side leading to a patio, and replace the garage door with an insulated one keeping the track and removing the motor, or install a carriage type garage door into the existing garage opening. You are ultimately adding additional detached living space which should add to the appeal to a future buyer/tenant, or for your enjoyment.

Come on man!  You don't need to settle for just one, do BOTH!  LOL

Then you have to invite us all to hang out in the cave when it's done!

Hey @Donna Yu!

You obviously know real estate and are a successful realtor, so you are in a great position to start focusing on your real investing goals. You have plenty of money to start and most likely have plenty of RE knowledge to rely on as well. 

My first recommendation is to have a relatively clear idea of what your goals are. You already mentioned you want more passive long-term investments, and possibly in a more landlord friendly state. Further clarification would be how much cash flow are you wanting? How long are you hoping it will take to get there?  How leveraged or conservative are you interested in being? Do you need/want the monthly income soon or are you willing to work toward a greater income later and leverage off future appreciation? Are you going to focus on sfr's, 2-4 units, 4+ apartment projects, industrial, commercial, etc?

These are not meant to be a comprehensive list of questions, but just a start to tickle the brain. You may have answers to some of these questions already, but it is a good exercise to have some clarity on those goals, then you can forge the path to get there. 
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As to your other questions: 
My first very successful deal was through a family member contact that knew of an investor that was selling one of their local rentals. And, I should've held on to that one. A good piece of advice is to hold on to all your good stuff and transfer any marginal or questionable stuff into better stuff. 

My best deal was from the mls. I just recognized a great deal and potential when only a few others could see it. 

I've had out of state rentals since 1997, and started by following others that had already done all the research and ground work - there was no reason to reinvent the wheel. Where to start depends on your goals, etc. If you want to maximize cash flow that would dictate where to look, if you want more appreciation potential, that would direct you to other areas, etc.

Quote from @Jonathan Greene:

Quote from @FR W.:

I'm not sure why you posted F R A G I L E, but "do you" whatever it means. 

"You" took offense to what I said clearly since you came back and began your post with F R A G I L E.  I could have started this reply with C H I L D I S H but I didn't.  So, moving on. 

Those of you who have put yourselves on this pedestal because you spend so much time here posting and leaving clapback comments (that was your word, right?), that you've racked up so many votes from those who may not necessarily agree with what you've said, but are too afraid to challenge or add a different view of what you said, are most often the problem.  Your response to my take on your post is a perfect example.  I wasn't negating your post, I was only offering a different view... one that too many face and feel, yet one that not many will speak up on, again, because there are those with "bully" syndrome and this superiority complex who shut them down every time they ask a question. 

You're right, what some call business, I might find rude, because I don't think that there is EVER A TIME OR PLACE FOR RUDE. But there's always, always, always, time to HELP someone who needs it.

And those new investors asking for assistance, maybe they won't see your post with all that "helpful advice" as you call it, because you've posted it in one place - maybe they'll get on here and will be so overwhelmed at first, that they just won't know where to start;  maybe they won't know to jump on here and start searching; maybe they won't know that they have to come to the table with an offer of some kind of help TO GET HELP FIRST (by the way, if you're new and reading this, please know that everyone out there doesn't live in the land of, "If you want my help and advice, what will you do for me?" world - some people live genuinely in service to others and they want to help, without wanting anything in return); maybe the new investor won't know the right questions to ask or how much information they should have, or even HOW to formulate that information into a question worthy of "your" response.

So, I will repeat what I said initially, in case the folks in the back didn't see it the first time:  
Whether asking a question as a new investor or answering as a seasoned
investor, ALWAYS lead with kindness. Being offended or taken aback by
someone's rude response, is not a sign of "fragility," it says that you
are one who would never respond so rudely to someone's simple question.
Stepping into these waters is already an intimidating process. Please
be mindful of the way you respond to questions from those who are not as
seasoned as you might be. Your response just might be the final straw
in someone's attempt to change their life for the better by doing what
others have successfully done before. Lead with kindness. Don't hide
behind a rude response as a way of helping, because you're not. What
you're doing in that moment is ensuring that the person asking the
question won't ask another... and that's not what we want. We're here
to help... not hurt or hinder.

Your wait is over...

Didn't read. TLDR.

In other words .... See 1.

:P

In my observation, many people incorrectly think there str is exclusively a real estate investment, it isn't. It is a business, which may or may not include the real estate. This is nothing new and has been going on for many, many decades, with vacation rentals, hotels, bed & breakfasts, etc. Many people act as if this is some new phenomena, it isn't. What's relatively new is the tech that has exposed the str opportunity to every sfr and lowered the bar to entry. Therefore, it is the use of some of the RE that is changing, and some local regulations are feeling a need to catch up with these changes. 

So, when you are underwriting an str purchase, much of the business should be evaluated separate from the real estate. Unfortunately some local regulations may change altering the business potential or plan. In many areas, I think some of those considerations and regulations are warranted, since those areas are zoned exclusively residential, are filled only with sfr's, and an str is a commercial endeavor. Now, in areas where a majority of the sfr's are vacation/str's the considerations are different.

These comments are in response to some of the other posts. As to the OP, unfortunately the options seem limited. Fortunately, the OP is smart or lucky that their property still works as an mtr or ltr. I would keep tabs on the local council meetings and proposals and get in touch with the city leaders expressing your concerns. Find local REI associations or other groups to ban together to help fight the regulations.

As a non-attorney, I'm not sure why it would be illegal for the city to change their regulations regarding str's. It doesn't preclude you from using the property as it was initially intended in the zone it was when you purchased it - as an owner-occupied sfr. It is just limiting the commercial use of the property. In some areas they limit the # of any type of rentals, and that was long before arbnb. Those may be located in HOAs though. Now, if your area has many str's and that is relatively common, than you may have a reasonable argument.

I had somewhat of the opposite issue, where I turned my ltr into a legally permitted str, but unfortunately, there were a ton more unpermitted str's in the area which appeared to dilute the str business. I ended up turning back into an ltr, since it wasn't successful as an str at that time. 

Anyway, good luck and fair warning to anyone considering an str - plug this potential into your underwriting.

@Alessa LeSar Congratulations on your success so far, it seems like you are hitting some of the right buttons for your professional real estate journey! Now you can start focusing on leveraging your realtor success into your own REI success, where you don't have to split the successes with your team or Zillow.

You are asking good questions and are smart to reach out for helpful advice on here. There is a lot of wisdom here, but, it is best to take that wisdom and channel it through your own filters for your specific situation and specific goals.

@Henry Clark has a wealth of knowledge and experience and I would absorb what he has posted. It is important to get clear on your goals, your destination, etc, then you can develop the path to get there. I've seen many past posts talk about how they want a certain # if doors/units or properties, but what they really want was a specific cashflow amount and not necessarily the management headache of 100 doors. They may really want quality cashflow as opposed to quantity, and that may mean maximizing a specific % return is secondary.

In the past, I have had properties where I was getting great CoC returns (30-45%), only to realize many years later, I would've been better off never owning those properties.

Anyway, you are in a good spot, as you pointed out, your contacts can be great resources to support your REI journey. Don't get too caught up in the cash required for some deals. The most important part of REI is the deal itself. If you truly find a deal, the money is available. You may have to partner with someone or something, but it is there.

I don't think utilizing your home equity for investment makes the most sense in most situations. A HELOC may be best as an emergency fund. It seems like maybe doing a few flips may make sense for you. Since you can recognize a deal, know what it would take to add value that a buyer in that market wants, utilize your resources to get the work done reasonably, and possibly have it presold to a buyer through your agent network. That way you'd be able to build up your cash, to put into other deals and direct it into some longterm hold properties, or str or mtr (short -term or medium-term rentals).

The most important part of this REI game is the deal – finding them, recognizing their potential and then knowing how to get it done. The money is important, but secondary, and it doesn't have to be yours. Money will crawl out of the woodwork if they sniff you having a deal.

Since Detroit seems to be a subtopic in this thread, here's an actual historical population chart showing a slight recent pop increase of 0.2% for current 2024. Personally, I am not a Detroit guy, just pointing out actual facts. These days, it is easy to do basic research into many markets.

Hey Bobby, welcome aboard the wild ride of BP!

Glad to have you!

I left out the most important thing - NEVER overpay a deposit for work not yet completed, that money and person/s sometimes have a way of disappearing in certain situations like that. 

You can also arrange to get the materials yourself and shop around for better pricing, which can help keep costs down. You can ask the Sub's, or whoever you are going to do the work, which materials they need and price them out at other supply houses. Or you can find someone to do a "takeoff" of the materials needed for the job, based on your plans and then send that out for bids. There are people and companies that will do takeoffs for you, for a fee. So, that may consist of getting a list of the lumbar needed for the build, etc. Also, some suppliers will do a takeoff for some of the materials. Not sure if Home Depot or similar will do it though, but they may be able to point you in the right direction.

But, this is easier with experience and knowing about other suppliers. It is more straight forward for certain things like the lumbar for your addition. You can send out the plans

That would depend on a few factors:

How confident you feel in managing the project (as @William Hutch mentioned).
How confident you are in recognizing building issues/concerns, and pointing them out.
How much time you have to oversee and research how things should be done. Remember there is a difference between work done to code (good enough) and work done per best practices. There are certain ways of doing things, which are just fine, but they may not maximize the use or performance of something. For example, an experienced plumber may suggest putting hammer arrestors on a plumbing system, to help alleviate potential water hammer problems (knocking noise) and prolong the life of components/fixtures/appliances, but the local building code may not require them.

It would also depend on what you are doing the work for and how the deal #'s pencil out. You said you live in the house, so if it is for personal use only, that might play into the decision, and/or if you have a lot of room in the deal financially and have enough to pay for the higher priced, possibly better GC, that might be part of the decision also.

In my experience, higher price doesn't always mean "better," but may mean more attentive and experienced and more and/or better resources (like better sub's, etc). 

That said, there is a lot of value with very good sub's, and can end up saving significant $, since there is no mark up. Some GC's are only as good as their sub's and other's are better than their sub's and are worth their weight in gold - it all depends.

I've don't most of my projects with sub's for many years and have learned to recognize many things that may need more attention, etc. Certain trades I wouldn't skimp on, like electrician, plumbers, etc, but sometimes you can get away with bringing them in to do the finish only, or you can pay a licensed trade or GC to come and inspect the work prior to closing up walls, etc. You can also pay a good home inspector to check on things as they are going and/or prior to closing up walls. Also, remember that city building inspectors or looking for minimum standards and may or may not be best for what you're trying to accomplish. But a good skilled worker, whether GC or sub's, can be invaluable.

With all that said, to try and save money, I would see if you can find a good home inspector referral, many of them are or were GC's themselves, and pay them to check out important work that you have done. That might be a good compromise. And you can get some good referrals from experienced local realtors/brokers, or here on BP, or nextdoor, yelp, etc.

Quote from @Hannah Joy:

That's not common, but can be done. It does require paying money and risking it may not make a significant difference to the assigned appraiser anyway. You can also find a helpful realtor to research the data through the mls or a public records database. Or anyone else you may know with mls access. You can look through zillow/redfin, etc and try and find reasonable comps. It gets challenging not having direct access to the data and other tools.