All Forum Posts by: Stephen E.

@Katherine Collins This is almost certainly the best advice, haha.

Do you have any events scheduled for September?

Hi Quinty. Did you ever find your contractor? Curious about your experience. New Orleans is a tough town for good contractors I think.

My property manager charges 10%, and does a lot more than just manage. 25% is definitely inaccurate unless they're managing short term rentals. And even then you can do better.

Per your initial question, you could purchase a place that needed some rehab, say $35k + $25k rehab loan, then refinance. If you do it right and the appraisal is good, you'd get your money back plus some, then do it again while keeping the property as an income generator. Or flip it if the numbers work. Getting a rehab property and a construction loan, instead of conventional loan which you won't get on a place that needs a lot of rehab, and then refinancing might workout better than getting a property for $120k that you can't take your money out of.

A lot of the highest cash flow properties by percentage are actually on the cheaper end, ie. $35k could get you a property that rents at $800 or a little more in Northern Indiana.

@Ward Conville That is awesome 😂

@Michael Watson AirBnB rentals are way down right now. But the thing to note is that you're allowed exactly one accessory permit. It has to be for the home where you have your homestead exemption. You have to live in the home. So if you have a double you can get a permit to do a full house rental for the other half of your double/duplex. AirBnB is enforcing it now (the city won't) and they require a permit number. It's all very easy to do but just remember you can only do it on one house, your primary residence. It makes owning one house (a double) in New Orleans a fantastic deal, but not so much on your second house.

Neighbors also don't tend to mind as long as you're living on the property. It's the ultimate first house hack because if tourism even comes back 50% the airbnb income should easily cover your entire mortgage.

OTOH, banks don't love counting AirBnB income as income, so that can be an impediment to refinancing if you don't have W-2s, other sources of income, etc. Still. It's a great deal really. Especially if you can get an FHA loan with 5% down, something I didn't even know about when I got my first house.

This is clearly a very good investment for the reasons you've stated. When tourism picks back up get an accessory permit and STR the other side. It will probably cover your entire mortgage and then some.

This doesn't sound terrible. It sounds like the house with closing costs and renovations would cost you $236 and you could rent for $2000. That's not bad, but that's also not great. I'm not familiar with the market in STL but that would be a little low for me for  cashflow. But  if I  wanted to live there or had other reasons  that would certainly influence the  decision.

If you're living there for a year then you're saving on your rent, so that's a win.

If you're confident that the house will be worth significantly more when you've renovated, that's the biggest win. If you could flip for significant profit that's great, or cash out refinance if the rates are still really low. You have to wait six months to do a cash out refi, but I think it's probably preferable to a Heloc. You might want to run the numbers on both and see which works better for you. A major consideration will be if you're planning on keeping the home forever. If you plan on selling within a year or two then a HELOC probably makes more sense.

It might be listed as a 3 bedroom because you  might  need permission  to make it a 4 bedroom. I would look at the  cost of changing it from  a 3 bedroom to a 4 bedroom and what your city requires. Because if you can sell it as a 4 bedroom you'll likely see an enormous jump in value.

Your residential mortgage probably states you have to live in the property for one year, or two. People often ignore that, but it's there. As long as you keep the property you likely won't be able to get another residential mortgage within 100  miles for two years (but you can get a "vacation" home as long as it's far enough). Which might be another reason to just sell the property once you've fixed it.

One last caveat, commercial loans aren't as bad as people think. So maybe you keep this home and use a commercial loan for your next one. There are tons of options.

@Michael Watson I have. I've purchased two homes in Jacksonville recently. One for $39,900 cash that rents for $850 and one in Yazoo for $53,600, a duplex with $1,000 in rent. 

The Yazoo one is owner financed so I only had to put down $17k with the rest on a 15 year loan at 5%.

I plan on getting a 3rd or 4th property in Jackson and then refinancing as a portfolio, so it's BRRR meets turnkey, basically.

I don't know your financial situation but maybe you should talk to a bank about a commercial property loan? I started with residential loans and when I did my first commercial loan I wish I had done so earlier. It definitely wasn't so bad!

in the market now, if you have the down payment, you should be able to get a commercial loan at 4%. And as mentioned you can always refinance, though I'm not sure I'd ever want to convert a 5 plex into a 4 plex...?