Looking to start investing in STRs

Member since 2022 · 28 posts · 18 votes

My wife and I are looking to capitalize on the equity on our home and start getting into the STR world. We have recently gotten a HELOC and are looking to start making the steps to buy a rental property. Being completely honest we are new to this. We have been reading a lot of books and information on this and want to start out in the right foot. How would you all recommend finding the right resources to help set us out right? I.e. tax advisors, maybe lawyers, business consultants, etc? All the books say to find good people but don't give great suggestions to make sure we get someone who knows what they are doing and are right for the world we are trying to get into. I appreciate any help you can give. Thank you for your time.

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Dave StokleyBusiness Member

Property Manager · Cleveland, OH · Member since 2015 · 705 posts · 799 votes

You do not need tax advisors, lawyers, or business consultants to start investing. You need a property. Just learn how to evaluate a deal (there are literally hundreds of thread on the forum about this) and go buy something! You'll learn so much more by doing than by studying theory.

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Andrew SteffensBusiness Member
Tampa, FL · Member since 2022 · 3k+ posts · 3k+ votes
3y
Hi Cody
Are you looking to invest in an STR local to you (it shows Idaho)? Really all you need to start is a mortgage professional (if obtaining a loan) and a savvy realtor to get started, then once you acquire the asset move on to the next phase (management?, accountants, lawyers (do not think you should need), etc).
[email protected]813-563-0877
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Cody Wageman
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Member since 2022 · 28 posts · 18 votes
3y
Thank you for the advice Andrew. Yes we are looking relatively locally to us. Within a couple hours there are some good opportunities. We will start discussing with multiple mortgage professionals to see what are options are there. Thanks you again
1 Reply
Matthew McKee
Real Estate Coach · Boise, ID · Member since 2022 · 177 posts · 285 votes
3y
Quote from @Cody Wageman:

Thank you for the advice Andrew. Yes we are looking relatively locally to us. Within a couple hours there are some good opportunities. We will start discussing with multiple mortgage professionals to see what are options are there. Thanks you again

Hey Cody, My Business Partner @Matt Osojnicki and I are both in Boise and he manages STR's where I'm in acquisitions. We have a podcast catered to local newbie investors and would love to sit down, listen to your goals and get you going in the right direction.
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Robin SimonBusiness Member
Lender · Austin, TX · Member since 2022 · 5k+ posts · 4k+ votes
3y
Quote from @Cody Wageman:

My wife and I are looking to capitalize on the equity on our home and start getting into the STR world. We have recently gotten a HELOC and are looking to start making the steps to buy a rental property. Being completely honest we are new to this. We have been reading a lot of books and information on this and want to start out in the right foot. How would you all recommend finding the right resources to help set us out right? I.e. tax advisors, maybe lawyers, business consultants, etc? All the books say to find good people but don't give great suggestions to make sure we get someone who knows what they are doing and are right for the world we are trying to get into. I appreciate any help you can give. Thank you for your time.

You've come to the right place - key is really going to be finding that "Core 4" that David Greene tends to talk about, a trusted manager, lender, agent and contractor (you probably only need 3 if you are buying turnkey). I wouldn't overcomplicate it with trying to make the first purchase perfect and super-dialed in from a tax/lawyer/strategy perspective, rather more focused on diving in and learning from the experience rather than perfecting it from the get-go. Find a good local manager, and a good agent and lender that specialize/understand STR and get to work
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Cody Wageman
OP
Member since 2022 · 28 posts · 18 votes
3y
Hey @Matthew McKee, thank you for the reply. I would be more than willing to set up a conversation. I am not in the boise area so if there is a way to do a zoom type call I would be on board for that. I am trying to learn now and build the right team to move forward with this. I don’t know how your process works but I am willing to have a call and discuss. Thank you for your help
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Cody Wageman
OP
Member since 2022 · 28 posts · 18 votes
3y
Thank you @Robin Simon. I appreciate the advice. I realize I will probably get a lot wrong here at first so I am glad to get a few pointers and know the people we should at least start with. I will work towards the group you mentioned
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John UnderwoodPro Member
Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
3y
Read through this forum and read Avery's book.
1 Reply
Dave StokleyBusiness Member
Property Manager · Cleveland, OH · Member since 2015 · 705 posts · 799 votes
3y
You do not need tax advisors, lawyers, or business consultants to start investing. You need a property. Just learn how to evaluate a deal (there are literally hundreds of thread on the forum about this) and go buy something! You'll learn so much more by doing than by studying theory.
4 Reply
Leslie Anne Morris
Real Estate Agent · Smoky Mountains, TN · Member since 2022 · 1k+ posts · 984 votes
3y
Your agent should be able to provide contacts.
0 Reply
Paul Sandhu
Investor · The worst town to live in, KS · Member since 2016 · 4k+ posts · 4k+ votes
3y
Quote from @Dave Stokley:
You do not need tax advisors, lawyers, or business consultants
This ^^^.
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Sanderson Mittnacht
Investor · Chatham, NJ · Member since 2021 · 36 posts · 21 votes
3y
Outside of people, think of systems: Airdna.co, hello.pricelabs.co, and lodgify.com have been my best friends for starting my STR endeavor. Airdna for market comparable, pricelabs for pricing automation and lodgify for guest booking automation.

First find your market: In STR there’s three choices, cities (business trips), 2-hrs from metros (weekend getaways), and vacation spots (flights). All have their pros and cons.

Then, find your audience: Do you want anyone, family oriented, or high-end.

Then, find your home.

Remember, it’s a hospitality business…

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Rick BassettBusiness Member
Property Manager · Greater New Haven, CT · Member since 2010 · 377 posts · 434 votes
3y
Do some research and make sure there is still demand for STR's in your area. There has been a lot of buzz lately that the STR party may have waned. There are many more hosts in this space then ever before. We were running 3 - 5 of them full-time heading into the pandemic, and now we only offer STR's when we have a tenancy gap of a month +/- between tenants. Glad we pivioted away from full-time STR's, they were too much work.
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Michael BaumPro Member
Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
3y
Hey @Cody Wageman, slow down a second and start with your area. I was in Idaho Falls last year. It sure has gotten big since I lived in Pocatello.

Are you planning on buying in Idaho Falls? You could self manage it easily if you are local.

Like @Dave Stokley said, you don't need all that to get going. Get a good real estate agent who also invests and knows the market.
Go out to AirBNB and VRBO and check out other rentals in your preferred area. See what they are offering, their amenities, their nightly rate and occupancy. That will give you a good baseline if it is a good idea or not.
Our vacation rental is a lake house in Harrison, ID on Lake Coeur d' Alene.
What is your budget?
1 Reply
Nathan GesnerBusiness Member
Moderator
Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
3y
Quote from @Cody Wageman:

Before building a team, I think you should focus on educating yourselves on how to:
1. find a good market;
2. evaluate property for potential risk and return;
3. manage the property
Then you start looking for a market to invest in. Once you've locked that in, get your REALTOR and Lender set up. Determine how much you are willing to spend, then your REALTOR can help you find opportunities. A contract may be completely unnecessary depending on what you purchase. You certainly don't need a business consultant, and a lawyer is also pretty low on the totem pole.
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Katie McCartney
Real Estate Broker · Columbus, OH · Member since 2014 · 33 posts · 17 votes
3y
I just bought my first STR last year. My recommendations is to find a lender and insurance person in the area you are looking in for a STR. They should be familiar with STRs and how they all work. I didn't and I'm kind of paying for that mistake. I always advise people for professional help when investing. Find a good competent Tax Accountant, REALTOR, and Lawyer. Tax Accountant, unless you are familiar with tax law, is crucial in my opinion to keep you out of trouble. Lawyer to help you establish how you want to set up your STR Contract. REALTOR again should be familiar with the area. Look to find if there are Facebook Groups that are in the area of your STR also. They are generally good with the questions aspect of running a STR and services in the area. Good luck. Let me know if I can be of further assistance. Katie
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Cody Wageman
OP
Member since 2022 · 28 posts · 18 votes
3y
@Katie McCartney thank you for your reply. I have been doing some of this research but it is good to hear that how it has worked for you. The tax professional is someone I am really digging into because I know there are a lot of potential tax benefits to making sure we do it right and have the right tracking and planning in place to not overpay on taxes where we could have saved. I will look into an insurance person though, that isn't a person I had very high on my list and that makes a lot of sense. Thanks.
1 Reply
Cody Wageman
OP
Member since 2022 · 28 posts · 18 votes
3y
@Michael Baum we are actually looking at doing this in the Island Park area. I have recently had some friends and family do this in that area, and I know of a good realtor that works that area and does the STR so we are looking at starting up there. We believe from our research and discussions with people that there is a lot of potential in that area. That is an hour and a half from us currently, and we spend quite a bit of time up there in a family cabin that we already have up there so we are planning on self managing here at first and if we can make it work over the next few years, grow it into something more.
We have a pretty good budget for this and we have some investors who we are also working with to make sure we have the funding we need to do it. That area is very expensive compared to places like Idaho Falls, so we have been getting our ducks in a row to be able to purchase a cabin up in that area.
I appreciate your input. Thanks for your help.
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Katie McCartney
Real Estate Broker · Columbus, OH · Member since 2014 · 33 posts · 17 votes
3y
Quote from @Cody Wageman:

@Katie McCartney thank you for your reply. I have been doing some of this research but it is good to hear that how it has worked for you. The tax professional is someone I am really digging into because I know there are a lot of potential tax benefits to making sure we do it right and have the right tracking and planning in place to not overpay on taxes where we could have saved. I will look into an insurance person though, that isn't a person I had very high on my list and that makes a lot of sense. Thanks.

My pleasure.
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Cody Wageman
OP
Member since 2022 · 28 posts · 18 votes
3y
Thank you everyone for your input and feedback, I am new to doing this forum thing and so I appreciate the support and information we have gotten. Sorry if I haven't replied to everyone directly, I am finding that that could be very cumbersome to keep up with. Thanks again.
1 Reply
Derek H.
Investor · Boise, ID · Member since 2013 · 17 posts · 10 votes
3y
Don't forget the other side of the coin too....https://www.postregister.com/n...
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Derek H.
Investor · Boise, ID · Member since 2013 · 17 posts · 10 votes
3y
and....https://dailymontanan.com/2021....
0 Reply
Mohammed Rahman
Real Estate Broker · New York, NY · Member since 2020 · 2k+ posts · 1k+ votes
3y
Hey @Cody Wageman - if it's totally your first time, I recommend narrowing down on your market and then finding an investor friendly agent through BP. They'll be able to better serve your needs since likely the agent will also be an investor.
You will go through a lot of ups and downs since you're not going to know what you don't know. This is normal! Make sure you do your homework and take things a step at a time.
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Cody Wageman
OP
Member since 2022 · 28 posts · 18 votes
3y
@Derek H. thank you for the article. I have seen this previously as well. My family has multiple personal cabins in the area and has witnessed this change over the last few years and how drastically the area is changing.
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James Hamling
Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes
3y
@Cody Wageman getting overwhelmed with answers going all kinds of directions yet?

@Sanderson Mittnacht hit the nail on the head. STR is a Hospitality Business, so if you want best success potential, do what the best in Hospitality and business do, and START WITH A PLAN.
To build a plan, your going to have some decisions to make, then research to test the theory for viability, adjust decision, re-test/ research, finalize decision, move on to next.
Once you have your decisions set of WHO, WHAT, WHERE, WHEN, WHY, you'll be onto the last action item of HOW.
The HOW is where agent, finance, management come into it. And by following the correct steps above, it will be a lot easier to identify the right people because your equipped with the details from above vs just blind scatter shot of "I don't know" and leaving it up to them to dictate all those decision points for you.
There is 101 ways to do STR, only 1 matters, that's YOUR's, ignore the other 100. Build your plan, that best fit's for you, and then at end get the human resources that fit your plan.
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Michael BaumPro Member
Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
3y
Ok @Cody Wageman, now we're cookin' with gas! That is a cool area. I have read these articles as well seeing as folks all over Idaho have a stake in STRs here. I do find it interesting how people want the freedom to do what they want with their property but you can't do it cuz it bugs me.
Anyways, it is the irresponsible owners causing the problems. Our home is in Harrison which is 267 people on Lake Coeur d'Alene. We vet each and every guest coming. Who are they, have they been to the area before, etc. No instant booking. This has cut down on any bad groups that could show up. I highly recommend that you stick with that seeing as the feelings about STR in the area are tense.
I would also look for a place a little off the main town with plenty of room around it. That will keep things smooth. Plus talk to any neighbors close to the place you like before you buy and let them know the plan. Do it in person. We did exactly this and it has been pretty smooth sailing. All the close neighbors have my cell and can call me anytime if they see any issues. I can contact the guests and let them know the problem and get it under control.
The only issues we have had with guests are speeding on the road (one complaint) and and English language barrier. People went on our neighbors dock even though I am very clear on where our beach is in relation to our house (right in front of it actually). They were very confrontational with my neighbors adult son and it almost resulted in a fist fight. That was also a one off.
There are a lot of properties for sale in the general area with a wide range of pricing. If you are going higher end, there are a lot of choices in 1m to 1.5m range including on the reservoir which would be cool to get. Love lake front. Summer fun and close to Yellowstone with a good fall and spring. Lots of snow in the winter.
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