All Forum Posts by: Tim Bee

Joshua tree is making it very difficult to buy/run STRs.  I wouldn't buy there.  Look at La Quinta (1 hr from there).  That city is booked year round on STRs and the home prices, though up, are still low enough to cash flow.  That city has major golf tournaments all the time and has nice weather 9 months of the year.  Even during the summer you'll get bookings.  You will end up averaging about double what you'd get for a long term rental after all is said and done. The city does have a few rules but they are workable.  Good luck.

Legally it makes more sense to hire a knowledgeable property management company.  They already know all the legal rules behind managing.  If you don't do things correctly you could get sued should you have a litigious tenant.  If you are barely breaking even on this property you should probably just sell it.  It's not worth holding onto a dog that's going to cost you in the long run.  Take that profit from the sale and buy a property that falls into the 1% rule.  Get a cheap one in the 100-150K range out of town and earn some good positive cash flow where you will be able to afford a prop manager.  Good luck man.

STRs are largely based off undercutting the competition price wise.  Look for similarly sized STRs in that region and take about 30% off your listing.  Think volume!  Being booked 20 days a month at 100/night is better than being booked 5 days a month at 130/night.  These aren't hard numbers but more of an example for you to experiment with.  Good luck.

Quote from @Susan Maneck:

Quote from @Tim Bee:

Quote from @Susan Maneck:

Mississippi investor here. It is rather difficult to answer this question because I paid cash for most of my properties, but I house I bought for about 30K now rents for $900, your not likely to find those deals right now. 

With a gross rent of 900/mo what's your average net?  Thanks

How do you calculate gross profit for a property I paid cash for? Probably after insurance, taxes, property management and repairs $500 a month or more. 

Yea calculating net profit is really easy. You just take your gross monthly rent. Subtract average damages, prop taxes, insurance, probable vacancy, income taxes, HOA if any. The money left over is called net income. What you paid to purchase this property would not be part of the equation for this particular question.

How much monthly rental income do you need to NET (what goes in your pocket after loans, repairs, taxes, etc.) to quit your job?  

For those who invest strictly in single family homes, how many do you own?  And how many of those are free and clear?

Quote from @Susan Maneck:

Mississippi investor here. It is rather difficult to answer this question because I paid cash for most of my properties, but I house I bought for about 30K now rents for $900, your not likely to find those deals right now. 

With a gross rent of 900/mo what's your average net?  Thanks

Quote from @Michael Giuffre:

Quote from @Tim Bee:

Quote from @Michael Giuffre:

Average NOI per door (before mortgage) is currently $710+/mo. across roughly 40 units.

Nice, so 28K net profit per month.  How much is the monthly loan payment if you don't mind?

Approx. $12k/mo. Total principal and interest payments, of which principal accumulation is about $3.5K/mo. Which I consider to be extra “forced” savings on top of the rental free cash flow of $16k/mo.

 Not bad! Sounds like you got a really great deal.

Quote from @Michael Giuffre:

Average NOI per door (before mortgage) is currently $710+/mo. across roughly 40 units.

Nice, so 28K net profit per month.  How much is the monthly loan payment if you don't mind?

I got a 4bed/2bath a few months ago in CA for 215K.  Rehabbed it for 25K and now it rents for 2450/mo. I paid all cash.  I am sure there are better deals out there but for me all the positive cash flow is nice.