Airbnb Is Dead? The New Real Estate Strategy Making 10x More in 2024!

Summary

In this video, the host partners with Jack Selby from Ice Coffee Hour on a real estate deal involving a Myrtle Avenue property. They discuss the co-living strategy, which maximizes cash flow by renting individual rooms, and provide a walkthrough of the property. The host explains the financials, including projected cash flow and costs, and addresses potential concerns like tenant conflicts and permitting. The video also covers the seller's situation, financing details, and the potential for future refinancing, offering viewers a comprehensive look into the deal-making process.

Takeaways

• 🤝 The speaker is partnering with Jack Selby from Ice Coffee Hour on a real estate deal involving a property on Myrtle Avenue.
• 🏠 The property is being considered for co-living, a strategy that maximizes cash flow by renting out individual rooms rather than the entire property.
• 📈 Co-living is highlighted as a growing trend in the single-family housing market, especially with the decreasing affordability of housing.
• 💰 The property is expected to generate a gross cash flow of $6,350 per month, with potential net earnings of $2,350 per month after expenses.
• 🛠️ The property requires minimal renovations, mainly the addition of walls and furnishing of rooms, with an estimated cost of $3,000 for the walls and $100 per room for furniture.
• 💼 The speaker emphasizes the importance of having a property manager to handle tenant relations and maintain a peaceful living environment.
• 📋 The property will be operated with permits to ensure legal compliance and to facilitate future sales without issues.
• 💵 The seller, a retired school teacher, is carrying a loan with a low-interest rate and is seller financing her equity at 0% interest for the first year.
• 📈 The deal includes a plan for the property to be refinanced when interest rates drop below 5%, allowing the seller to be paid off without additional investment.
• 🔍 The speaker provides a detailed walkthrough and analysis of the property, demonstrating expertise in evaluating and underwriting real estate deals.

Q & A

Who is Jack Selby and what is his role in the video?

Jack Selby is a partner in the deal discussed in the video. He is from Ice Coffee Hour and is involved in evaluating and walking through a property as part of the real estate investment strategy.

What is the main strategy discussed for increasing cash flow in single-family properties?

The main strategy discussed is co-living, which involves renting out each room individually to amplify cash flow typically by a four or five-time margin.

Why is co-living considered a growing sector in the single-family property market?

Co-living is considered a growing sector because it addresses the decreasing affordability of housing, allowing more people to rent rooms at a lower cost, and it provides a cash flow solution similar to Airbnb in previous years.

What is the average stay duration for tenants in co-living properties according to the video?

The average stay duration for tenants in co-living properties is about 9 months.

How does the property management handle conflicts among co-living tenants?

The property management handles conflicts by having tenants sign off on rules and regulations before moving in, and by managing any disputes that arise, with the understanding that non-compliance can lead to eviction.

What are the estimated costs for furnishing a bedroom in the co-living setup?

The estimated cost for furnishing a bedroom in the co-living setup is about $100 per room.

What is the gross cash flow expected from the property after implementing the co-living strategy?

The gross cash flow expected from the property after implementing the co-living strategy is $6,350 per month.

What is the net cash flow projected for the property after all expenses, including the mortgage, utilities, and management fees?

The net cash flow projected for the property after all expenses is approximately $2,350 per month.

Why does the video mention the need for permits when modifying the property for co-living?

Permits are mentioned as necessary to ensure the property modifications are legally compliant and to avoid potential issues with future sales or neighborhood complaints.

What is the backstory of the property owner, and why is she selling the property?

The property owner, a retired school teacher, has owned the property for 19 years and is selling due to the difficulty in managing the property and the financial burden it has become, especially after unsuccessful attempts to sell it on the open market.

How does the deal structure benefit both the property owner and the investors?

The deal structure benefits the property owner by providing her with immediate cash and a plan to pay off her equity over time, while the investors benefit from a property with a good loan rate and the potential for significant cash flow through co-living.