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Metro Atlanta MTR – projected monthly cashflow: $1200 per month

Posted by Dan Ore on June 27, 2024
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Hi, 

In short: this email is a bit long, but it’s worth reading – it will show you how we triple the cash flow for a rental property.

For updates and photos: http://reistart.com/biFEe


Over the past year, we’ve been working on ways to increase rent and lower expenses to boost your property and portfolio performance and cash flow.

In metro Atlanta, we’ve partnered with one of our long-term associates to offer a new, more lucrative leasing program.

Instead of leasing as a traditional long-term rental, we suggest listing it as a mid-term rental (MTR, also known as a hybrid rental).

In an MTR, the focus is on leasing to people who need a place to stay for more than a month but less than six months. Examples include homeowners dealing with insurance incidents who need temporary housing (often paid for by insurance) and film and TV crews in Atlanta who need accommodations for several months.

The MTR model shares some similarities with short-term rentals (like Airbnb) but is different in many ways.

 

For this property / general notes / things to know and address 

  1. It is owned by a bank or fund. It has been listed for 98 days – cash offer (of delayed financing) would possibly work better.
  2. From the photos, it looks rent ready. The kitchen looks wonky. Likely needs new appliances. 
  3. Wood-burning stove in the living room would be great and efficient for a family. Probably a liability for renters. 
  4. LVP throughout is really nice!
  5. Sunroom needs some TLC.
  6. Laundry room looks weird – will need to be addressed
  7. Backyard is meh.
  8. LTR: $1600-1800. Numbers are tight. 

 

We ran an initial evaluation and believe this house could be used as a mid-term rental (MTR). Here are some of our financial assumptions:

      • Current traditional lease market rent: $1850
      • Average MTR lease: $4275

     

    Here’s an initial analysis

    Note: We made some assumptions on certain expenses, since we don’t have all the figures. However, we believe you will still benefit significantly from this program.

     

    Property & purchasing details:

    Beds4Purchase price$210,000
    Baths2Mortgage (%)30%
    Sq Ft1,620Mortgage ($)$147,000
    Year1978Down-payment$63,000
    Garage0Acq. fees$4,200
    HOA$0Cosmetic work$12,500
    Asking$230,000MTR prep$25,000
    Listed date2/7/24Total investment$104,700
    DOM140Int rate6.75%
    ARV$240,000Duration30
    Insurance$135Mortgage payment$953
    Property taxes$385

    Analysis/Comparison – Long-term vs Mid-term

    Long Term RentalMTR
    Rent$1,850$4,331
    Expenses
    HOA$0$0
    Property Taxes$385$385
    Insurance$135$162
    Leasing (1/24)$77
    Utilities$0$450
    Mo. Mang. (%)9%
    Mo. Mang. ($)$167
    Rev Share (%)25%
    Rev Share ($)$1,083
    Total$764$2,080
    Principal & Int.$953$953
    Total$1,717$3,033
    Cashflow$133$1,298

    Before you get excited about these figures, there are a few important things to understand:

    • In the MTR model, you will be paying for utilities.
    • The management fee is in the form of a revenue share, and it is based on success and there is no leasing fee.
    • This model incentivizes the local partner to maximize the property’s rentability and minimize downtime, thereby maximizing its income potential.
    • Similar to short-term rentals, the house will need to be converted into an MTR. This requires an initial investment to make the house ready for a family to live in for several months, bringing only their clothes and suitcases.

    Overall, while the MTR model offers higher potential rent, it also involves additional actions and initial costs.

     

    Next Steps

        • Let us know if you have any questions or if you’d like to discuss this program further.
        • Once you decide to move forward with this direction, let us know, there are a few more steps needed to be taken before making an offer.
        • We will do everything we can to minimize any downtime, prep your property quickly, and put it into the MTR pool.

      You can read and learn more about MTRs here!

      All the best, 
      Dani
      Dani Beit-Or
      Simply Do It Investing
      Tampa | Houston | Dallas | Nashville | St Louis | Kansas City | Birmingham | Chattanooga
      Also you can stay updates with properties, announcements and more on Telegram: t.me/sdi_re


      Podcast: Guided Real Estate Investing by Simply Do Itanchor.fm/simplydoit

      ——————————–

      Disclaimer

      Information contained herein was obtained from sources deemed reliable, however, the sender makes no guarantees, warranties, or representation as to the completeness or accuracy thereof. The presentation of the property is offered subject to errors, omissions, changes in price and/or terms, prior sale or lease or removal from the market for any reason without notice. The analysis is provided “As Is”. All the information is believed to be accurate (except for the small effects of some simplifying assumptions), but is not guaranteed, and depends on the values entered for the property. This analysis is intended for the purpose of illustrative projections. The information provided is not intended to replace or substitute for any legal, accounting, investment, real estate, tax, or other professional advice, consultation, or service. Sender and/or the owner(s) are not responsible nor liable for any damages arising from the use of the analysis info.

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