All Forum Posts by: Victor Steffen

We've felt a shift in our markets over the last several weeks but never as strongly as this past week. Here are some of the deals we did (1 is personal, the others are for my clients)

-Seller Financed Quadplex, 20% down, 6.5% interest. Turnkey. Fully Occupied. "A" grade location. San Antonio TX

-Luxury Airbnb, listed for 1.2M. original offer of $925k rejected. settled at $950k. Cedar Park TX

-Cashflowing Duplex listed for 230k, offer accepted at 215k. Dallas TX

-Househack, 3.5% down FHA financing, listed for 800k, under contract for 790k and 20k concession from seller. Austin TX

-Househack, duplex listed for 235k, under contract for 230k and $3500 in concessions *before inspections*. San Antonio TX

-5 bedroom, 3200sqft househack/ Rent By The Room purchased with a VA loan at list price. Austin TX

-A listing agent and a builder called me asking if I had buyers for them. (not technically a deal, but still notable)

NONE of these deals would have been possible 2 months ago. Looking forward to getting househackers back in the game! 

@Christine I.In my experience, OCCUPANCY is what makes or breaks a STR and creates a viable long term revenue stream. If you adjust your search slightly and look for locations with the highest occupancy rates I'm sure you will find solid buys at your price point that will produce the income stream your looking for. You should also shop that management rate. I know a few years ago management fees for STRs were in the 20% range. Now that more operators are entering the space it's not uncommon to find sub 15% full service management.

Our STR managers in Austin charge 10% gross revenue and will even furnish the space.

Sounds like a fun project. Good luck! 

I personally use tenant cloud. Not sure the size of your company but there are some operational bottlenecks that become cumbersome at 100+ doors. Up to that number it's a great platform. 

Hopefully this post is encouraging for my fellow self-employed/ entrepreneurs/ 1099s in hot markets like Austin and San Antonio:

Mahncke Park San Antonio Texas Quadplex off the MLS. Turnkey. Fully Occupied. 635k purchase price. 20% down. Seller agreed to carry paper at 6.5% interest only and a 36 month balloon.

STRs for comparable units are trading for $95 per night and that price point is seeing average occupancy of 25 nights per month. The POTENTIAL on this one is huge (approx $9500 per month in gross income, net cashflow around $5000/ month... which is insane COCR).

We had zero expectations that our offer would be accepted , but every now and then you get lucky. Really excited for this one!

@Bryan Hancock agreed. and I run a monthly meetup haha 

If you can find a furnished space and all decor conveys I've found those to be excellent deals. You're effectively financing the cost of the furniture and saving the time/ energy required to do all of the shopping and setup. Further- I've found that furnished homes typically do not trade at a premium compared to the fair market value of the property- meaning you can usually get the furnishings at a steep discount! 

@Christian Sabatini Interesting Question! curious to hear what you think as well? 

IMO: higher rates are just another line item in your pro forma. If the cashflow margin is adequate with the higher rates go ahead and proceed with the traditional 20-25% down payment. 

More equity in a deal does not limit our exposure- cashflow and liquidity does.

In a nutshell- I suggest my clients increase their reserves rather than put that cash toward a larger downpayment if the property will hit our cashflow target. Always good to have some dry powder especially in the changing market environment!

You should, absolutely, 100%, continue to invest. If you're following sound fundamentals (buying 20% below market value, cashflow positive real estate in areas with growing populations) it would take a true black swan to derail your growth and leave you worse off than not investing. 

We've had a lot of success with the SFR + ADU strategy in San Antonio Texas, hoping this works out for you! In my experience an appraiser will stick to the script and work to find other SFR+ADU properties that sold in the last 12 months in similar condition in a similar area. It's not an easy task especially since most MLSs don't have a "ADU" filter and even if they do, agents often omit the data.

You can add value to the transaction by hunting down other sfr+adu sales and sending them for the appraiser's consideration (I'll search through recently solds on the MLS as well as zillow for key words like "guest house" "casita" "adu"). Since similar assets are difficult to find I've found appraisers will almost always use the properties that i send them.

The lease rate your lender uses in the DSCR equation is straightforward- most appraisers don't look at whether a lease comp comes from a ADU or a detached SFR. They are just looking for similar area, similar finishes, similar sqft and bed/bath count and they will take the median.

It's an awesome business, though not for the faint hearted. There are dozens of ways to build a successful company. Try a lot of different lead gen strategies. Whatever you can do consistently for a long period of time that puts you in front of buyers or sellers will make you successful.