****looking for first property to use as STR. Got notified of an off market property already functioning as a STR... what questions to ask? Good or bad deal to purchase an already functioning STR?
Banker · Nationwide · Member since 2020 · 2k+ posts · 1k+ votes
2y
Ask to see the previous year’s P&L, Ask about previous peak seasons, ask them to share a copy of the emails from all previous guests (For marketing and Follow-up promotions).
Good news is you have a previous owners track record to give you a little foreshadowing into what worked for them and how to build from their wins and fails. You also have their previous guests that can be huge for growing your book of business and not having to start from scratch. Ask them to share their STR management VRBO, AIRBNB etc, and look at their costs.
Use their vendors if they offer positive opportunities and use that as a way to ask for "Earn your Business' type discounts.
If it is a SFR single family, Condo, or Townhome you can use a Vacation home type of loan and only have to put 10% down. If its a 2-4 unit you only need 15% down using a True Portfolio program and you have DSCR as a back up that uses the STR rents to qualify and avoid personal tax returns or income.
Lender · New York, NY · Member since 2022 · 1k+ posts · 1k+ votes
2y
If you are getting financing for this, ask if the seller knows/thinks how it will appraise. Oftentimes houses with existing STR history that are sold as "turnkey STRs" are sold at a premium purchase price due to this. Then, when someone goes to get financing for the asset, the house appraises low, and since the lender is forced to lend off the lower of the appraised value and purchase price, their loan amount must drop and the down payment increases.
Real Estate Agent · Surf City, NC · Member since 2017 · 648 posts · 597 votes
2y
I think it is a good thing if the property has bookings for market rents and if the seller is willing to help transfer the bookings to you as the new owner. If the property is listed on Airbnb/VRBO it will be hard to transfer reservations and that could be a huge pain if the seller is not helpful, even after closing.
****looking for first property to use as STR. Got notified of an off market property already functioning as a STR... what questions to ask? Good or bad deal to purchase an already functioning STR?
First thing I would do is request all platforms they are listed on and get on there and read the reviews that will tell you a lot about who is selling, if it's a good investment and condition of the home