WIIRE 012: BTS: Trouble in Paradise at an MTR with Amelia & Grace

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09/26/22 • 26 min

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Hello everyone, welcome back to episode twelve of the Women Invest In Real Estate podcast! We have had such great feedback and so many questions about our day-to-day’s, so today’s episode is another behind-the-scenes WIIRE episode where we’re going to give you the scoop on what we are both up to in the world of real estate investing and managing our properties.

We’re going to start off with a crazy story that Amelia has been bursting at the seams to share (and has made us wait until we recorded this episode to share) all the deets about recent happenings at her mid-term rental property!

Amelia’s Internet Novella

A few days ago Amelia received a call from Mediacom that they were suspending her service for illegal video downloading. She inquired about the specific router and with several units sharing routers she had to determine exactly when the video downloading occurred to narrow it down to the exact culprit (tenant).

The downloading apparently began the day after this tenant moved in and she was taken aback because they claimed they had called her to inform her previously (nope, they did not, nor could they prove it). No one (and we mean NO ONE) likes to deal with utility companies and this time was no exception.

Amelia’s red mane was flaming and she was furious about the problem this tenant had caused, because not only did he cause her account to be suspended, but Mediacom informed her that if it continued they would be canceling all of her accounts! This would be quite problematic because not only were all of her units in this building run on Mediacom, but a few others as well, including her personal account.

She asked them to give her a few hours to nail down the tenant and resolve the issue and as soon as she hung up she immediately called the tenant. While Amelia normally prefers to handle all of her tenant communication in writing, time was of the essence and she needed an immediate response.

When he answered she immediately informed him that she was aware of what was going on and that the internet has been suspended and he was to remove all content from all of his devices, effective immediately, or she would be taking legal action against him.

To cover her back, she sent him a text message detailing exactly what she had just verbally told him, as well. He was very apologetic but still received a BIG timeout from Amelia’s paid-for wifi.

Grace’s Next Move

With more than 12 units using Mediacom for internet service, they finally advised Grace to move to a commercial internet account (quite literally to help her avoid situations just like Amelia’s), so it doesn’t cause an issue across the board on her accounts.

Grace is also in the process of hiring an in-house Property Manager and could not be more excited! After so much back-and-forth about the decision to hire Grace has pulled the trigger and is now learning how to ‘be the boss’! This investment will come back to her simply on the time she will be saving by having someone else handle all of the little (and big) details for her biz.
For the time being, Grace has been in a reactive stage. She reacts as requests come in, and would rather be able to be in more of a proactive space where she can be prepared for things ahead of time. It is going to be a whole new stage in her business.

Other Updates

Another announcement Amelia is excited to announce is that if you tuned into our first BTS episode you heard that I was under contract on a seller-financed triplex and they finally closed on that property last week! The first thing they are planning to tackle on this project is actually replacing the roof. It will cost around $22,000 to fully demo and replace (including the removal of 4 old layers) the roof of this property. She is also going to have the gutters replaced as well which will add on another $4,000, spending $26,000 right off the bat, which they are financing through a line of credit and they will BRRR into a commercial loan once they are finished with the rehab.

A couple of fun surprises they found on this property were that it still has old knob-and-tube wiring. While it is in good condition, they will likely still go ahead and replace it since so many walls will already be opened up. Another surprise was that this owner actually did a full clean-out from all of the ‘stuff’ that originally had been packed into the property (rare, but a much-appreciated surprise!). Lastly, while they were pulling up the old, brown shag carpeting they discovered beautiful wood floors, in immaculate condition!

That’s all for this episode, friends! If you’re looking to connect with us outside the podcast you can find us each on Instagram:

Amelia’s Internet Novella

To cover her back, she sent him a text message detailing exactly what she had just verbally told him, as well. He was very apologetic but still received a BIG timeout from Amelia’s paid-for wifi.

Grace’s Next Move

Other Updates

That’s all for this episode, friends! If you’re looking to connect with us outside the podcast you can find us each on Instagram:

Previous Episode

WIIRE 011: How We Got Started In REI & Our Current Buy Boxes with Amelia & Grace

Welcome back to episode 11 of the WIIRE podcast! In this week’s episode we’re sharing with you about our very first (ever) rentals; how we found them, how we managed them, and if we still have them in our portfolio.

Amelia’s First Rental Property

Amelia’s first rental property was a triplex in a small town in her hometown, with a population of around 5,000 people. It was a 2-story property with 3 units; two bedrooms, one bathroom on the first floor, and two units with one bedroom and one bathroom each on the 2nd floor. Amelia found this property listing on Zillow and really, only by accident. She typically had only been searching for single-family properties and didn’t realize she had the multi-family filter selected when she came across this property.

She scheduled a time to walk through it and was taken aback by the awful tenants living in the residence. So she wrote what she now calls a ‘love letter’ to the owner stating how she was excited to purchase a property in her hometown and be able to give back by providing quality housing to the residents of her hometown. With the list price sitting at $99,000 she submitted an offer of $65,000 and after some negotiation they landed on a purchase price of $78,000. Amelia purchased the property for all-cash because the appraisal was taking a long time to come back so she made it an all-cash purchase with the intent of refinancing into a mortgage right when the appraisal could be completed.

This wound up being a blessing in disguise situation because the property needed some work and she was able to make them to the property before the appraiser came out. When they finally did come out to do the appraisal it appraised for $92,000. Part of Amelia’s contingency on this offer was that the property must be sold vacant, meaning no inherited tenants upon closing.

With only 45 days until they closed the tenants moved out and Amelia ran the numbers again on this triplex (crazy for a first rental!) and knew there was no way she wouldn’t make money on this property.

It’s been nearly two years and taking the risk on her first-time rental property as a flip, wound up being a huge success and now cash flows around $800-900 per month.

Grace’s First Rental Property

After looking for a few weeks Grace and her boyfriend purchased their first rental property when she saw a property for sale, called the seller, and asked for a list of properties they were interested in selling. He sent over a list of about 30+ properties and was trying to sell them down to about 8 or so. She told him she wanted to see the grossest property he had.

He did, and it was absolutely disgusting. An absolute gut.

Backing up a few steps to her Buy Box, Grace knew they needed to BRRR because they had the money for a down payment and for the repairs, but did not want to buy cash. They also knew they wanted it to be a single-family property, and the town Grace lives near. They also did not want inherited tenants so they could start work right away. Plus, they were going to DIY the project.

When it came time to start working on the property it seemed to be even more disgusting than they initially thought and found more trash than they could have ever imagined possible. After purchasing with 20% down, they told their bank they would be refinancing it ASAP so the bank put them on a construction loan so they only had to pay quarterly interest on it until they refinanced it.

It took about 6 months (which was 3 months over their initially estimated timeframe) and between $35,000 and $36,000 (when they had only estimated $23,000), which added a significant about of stress to the entire project.

One of Grace’s ‘fondest’ memories (and biggest lessons) of this particular project was that when they were roughly one month out from completion, they made a schedule of what needed to be done. The entire 3-story property needed painting (doors, walls, ceilings, trim, you name it). She scheduled herself 3 days to paint which quickly, and painstakingly, turned into one month.

Their hard work paid off and was roughly $120,000 and when all was said and done the property appraised for $185,000. They pulled out roughly 70% equity and walked away with around $8,000 extra to use on their next deal.

Today, Grace still has this property in her portfolio (renter occupied) and has learned some major lessons to take along her REI journey.

If you’ve enjoyed hearing our stories in this episode head over to Instagram and give us each a follow and see what we’re up to now!

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Catch you in the next episode!

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Next Episode

WIIRE 013: Common MTR Misconceptions Debunked with Amelia & Grace

Welcome back to another podcast episode! This week we’re sharing the top misconceptions about midterm rentals that we commonly hear and going to debunk each one of them for you! Not allowing yourself to get caught up in these common misconceptions could actually get you ahead of the game just by knowing how to tell apart a fact from fiction about midterm rentals. Let’s get started!

The List

Myth #1: The units in midterm rentals must be luxury or extravagant.
The Facts: Keep it simple: clean, safe, comfortable, and affordable. For the most part, traveling professionals are only in this space to sleep so their needs are low and they are trying to keep their costs that way too.

Myth #2: Midterm rentals are only for traveling nurses.

The Facts: Recently a teacher who was brand new to the area moved into one of Grace’s midterm rentals because he didn’t know exactly where he wanted to put his roots down yet in his new local area. Amelia has housed all sorts of construction personnel, solar panel and wind turbine contract technicians, traveling corporate employees for companies like Starbucks, and more. They are only working 1-3 month contracts and don’t want to live out of a hotel for the entire time so they choose midterm rentals that suit their needs.

Myth #3: MTR tenants are always the best tenants.

The Facts: While this might generally be true in 95% of cases, there is still that 5% of tenants who have been problematic renters. (Throwback to episode 13 where Amelia dished about her tenant who caused her internet to become suspended!).

Bonus Myth #4: Midterm rentals only work in large cities.

The Facts: Cedar Rapids has a population of about 120,000 people and Grace lives in a town of about 1,000 people and MTRs are absolutely successful there. Amelia has a MTR in a lake town and her cottage is going to be an MTR for the winter when travel slows down for the season. She put up the listing on FurnishedFinder and within two hours her MTR tenant had paid their deposit and booked the unit!

Bonus Myth #5: Short-term rentals have a higher vacancy level.

The Facts: In reality, our midterm rentals typically were near 0%. We both work our business to keep our vacancy levels as minimal as possible where a tenant moves out and a new tenant moves in within a matter of hours, allowing for just enough time for a good cleaning and turnover.

That’s all for today friends, thank you for joining us! Catch you in the next episode!

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