Eager to hear about your Biggest STR Home Runs - which path did you take?

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Eager to hear about your Biggest STR Home Runs - which path did you take?

Tom Dieringer
Investor · OR · Member since 2020 · 61 posts · 32 votes

I’d love to hear if your biggest home runs have been from:

a) buying an existing STR, tweaking it with your own unique skill set and applying your experience-proven enhancements to be a top performing property, or

b) converting a previously non-rental property into an STR?

Thanks!

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V.G JasonPro Member
Investor · Member since 2022 · 3k+ posts · 3k+ votes
2y

I bought distressed in a very, very good area. Rehabbed it and the equity gain after was significant. These properties in better areas make every dollar worth more. To add a bathroom in the hood versus the primo areas is about the same cost; the return is completely different.

I buy most STRs full cash, and re-fi out with under 30% in LTV. Take that money and buy another. I try to do it under 30, and closer to even 20 or 10%. If it has great LTR capabilities, I'll have a larger loan if it's strictly a seasonal/market related STR it's no leverage on it.

The money is where the work is needed. I do not buy rehabbed, flipped, or turnkey. The money is lost there.

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  • Mark Miles
    Rental Property Investor · Philadelphia, PA · Member since 2016 · 543 posts · 716 votes
    2y

    I’ve done both but A is much much easier and cheaper. B can cost $30-$50k to setup and furnish from scratch. But you may be able to do option A for $10k or less in setup & furniture, esp if you buy the place fully furnished. (these numbers are just furnishing & setup costs, they exclude house purchase & closing costs)

    1Reply
  • Tom Dieringer
    OP
    Investor · OR · Member since 2020 · 61 posts · 32 votes
    2y

    Thanks Mark.  And cute baby in your photo!

    1Reply
  • Jon Martin
    Member since 2022 · 1k+ posts · 1k+ votes
    2y

    I've only done B. Not sure if I'd call them home runs but they seem to do well. I would consider A if the location was great and there was some low hanging fruit that was clearly holding them back (bad decor, management etc). 

    Biggest gamechanger was going from 1st to 2nd property was getting a property with 5 bedrooms. Views are 4X and conversion is double over my 2/1. 2- and 3- bedrooms are the squishy middle with tons of competition, but when the potential guest needs to sleep a large group the pool shrinks dramatically. 

    Obviously there are mature markets where this no longer stands out. 

    4Reply
  • Kumar R.
    Property Manager · Destin, FL · Member since 2023 · 83 posts · 27 votes
    2y

    @Tom Dieringer I would use two levers to make a decision for the choices you mentioned. Time and Money. As @Mark Miles mentioned, Option B will have a lot of hidden costs and likely hidden time-consuming repairs. Option A could cost more to acquire compared to option B because option A is already making money. We worked with a couple of homeowners, worked with them to change the interiors, added a few amenities more in tune with the local tourism scene. This may be more suitable for a phone call, happy to discuss. Please feel free to PM me. 

    3Reply
  • John UnderwoodPro Member
    Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
    2y

    My favorite and more profitable property is my LakeHouse. 

    It was not an STR when we bought it. So we weren't paying turnkey prices.

    We also bought it close to 15 years ago when prices where much lower.

    3Reply
  • Adam BartomeoBusiness Member
    Real Estate Broker · Cape Coral, FL · Member since 2015 · 2k+ posts · 1k+ votes
    2y

    My biggest Homerun was selling it and not having to lose money anymore ! LOL!

    [email protected]239-339-3969
    Bartomeo Property Management4.7150 Reviews
    WebsiteView Page
    3Reply
  • Kumar R.
    Property Manager · Destin, FL · Member since 2023 · 83 posts · 27 votes
    2y

    @John Underwood 15 years ago? So in other words you got yourself a goldmine ;-) 

    2Reply
  • John UnderwoodPro Member
    Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
    2y
    Quote from @Kumar R.:

    @John Underwood 15 years ago? So in other words you got yourself a goldmine ;-) 


     yep, and a low interest loan!

    3Reply
  • Collin HaysBusiness Member
    Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes
    2y

    In 2010, I bought a dilapidated cabin near downtown Gatlinburg over the phone for $210,000. The rental income was less than $10,000 a year.  I was three states away. My sister lived only about 150 miles away, so she went over and looked at it after I bought it.  She wept.

    But, but, but!!!  The cabin was circa 1800 and had good bones. It was right on the Roaring Fork River near downtown. Made from solid logs from the now-extinct Chestnut tree, wood floors, and original rock fireplace.  

    I put $40K into restoring it and played up the theme that it was the old. Placed functional antiques in every room, an antique persian rug, a few animal skins. Super cool!   

    It never did less than $35K a year after I did all of that. Sadly, it burned to the ground in 2016. I rebuilt with another genuine log cabin, but it's not quite the same.  

    Here are the before and afters:

    [email protected]806-672-7102
    SMOKY MOUNTAIN FALLS INC.51 Review
    WebsiteView Page
    3Reply
  • Tom Dieringer
    OP
    Investor · OR · Member since 2020 · 61 posts · 32 votes
    2y

     Thanks Collin!  What a wonderful cabin and great job in persevering and rebuilding.  I've read many of your posts here on BP and started following you a few weeks back, so it's great to get your direct feedback.

    2Reply
  • Collin HaysBusiness Member
    Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes
    2y
    Quote from @Tom Dieringer:

     Thanks Collin!  What a wonderful cabin and great job in persevering and rebuilding.  I've read many of your posts here on BP and started following you a few weeks back, so it's great to get your direct feedback.

    Any time !
    [email protected]806-672-7102
    SMOKY MOUNTAIN FALLS INC.51 Review
    WebsiteView Page
    0Reply
  • Andrew SteffensBusiness Member
    Tampa, FL · Member since 2022 · 3k+ posts · 3k+ votes
    2y

    I do option C which is buy distressed, full renovation and furnish and put on the market as a new listing.

    As a broker, I have clients that do both.  Buying turnkey and furnished has its rewards and is preferred by most of my buyers when possible.

    [email protected]813-563-0877
    Vacation Rentals of Florida53 Reviews
    WebsiteView Page
    3Reply
  • V.G JasonPro Member
    Investor · Member since 2022 · 3k+ posts · 3k+ votes
    2y

    I bought distressed in a very, very good area. Rehabbed it and the equity gain after was significant. These properties in better areas make every dollar worth more. To add a bathroom in the hood versus the primo areas is about the same cost; the return is completely different.

    I buy most STRs full cash, and re-fi out with under 30% in LTV. Take that money and buy another. I try to do it under 30, and closer to even 20 or 10%. If it has great LTR capabilities, I'll have a larger loan if it's strictly a seasonal/market related STR it's no leverage on it.

    The money is where the work is needed. I do not buy rehabbed, flipped, or turnkey. The money is lost there.

    5Reply
  • V.G JasonPro Member
    Investor · Member since 2022 · 3k+ posts · 3k+ votes
    2y
    Quote from @Mark Miles:

    I’ve done both but A is much much easier and cheaper. B can cost $30-$50k to setup and furnish from scratch. But you may be able to do option A for $10k or less in setup & furniture, esp if you buy the place fully furnished. (these numbers are just furnishing & setup costs, they exclude house purchase & closing costs)

     It's not cheaper. It's likely more expensive. You're just viewing it as an add-on price, not from where it started. Sellers of A are profiting off you, think about that. The original buyers of the A bought it likely discounted too, so they're making value both sides. On the bid & the offer. 

    2Reply
  • Tom Dieringer
    OP
    Investor · OR · Member since 2020 · 61 posts · 32 votes
    2y
    Quote from @V.G Jason:

    Great comment, V.G.  This is what my gut's been telling me, but gut + advice from seasoned pro's = higher odds of success.  Thank you!
    0Reply
  • Michael BaumPro Member
    Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
    2y

    No home runs. Some base hits...

    Story of my life....

    1Reply
  • Mark Miles
    Rental Property Investor · Philadelphia, PA · Member since 2016 · 543 posts · 716 votes
    2y
    Quote from @V.G Jason:
    Quote from @Mark Miles:

    I’ve done both but A is much much easier and cheaper. B can cost $30-$50k to setup and furnish from scratch. But you may be able to do option A for $10k or less in setup & furniture, esp if you buy the place fully furnished. (these numbers are just furnishing & setup costs, they exclude house purchase & closing costs)

     It's not cheaper. It's likely more expensive. You're just viewing it as an add-on price, not from where it started. Sellers of A are profiting off you, think about that. The original buyers of the A bought it likely discounted too, so they're making value both sides. On the bid & the offer. 

     No, you’re missing the fact that when you buy a house fully furnished you can roll in the cost of the furniture into the purchase price and get it all financed on a 30-year mortgage (depending on appraisal price of the home, YMMV). You can’t do that with an unfurnished property - you have to pay for the entire cost of furnishings up-front. Huge difference paying for furniture in cash $30-50k up front vs financing it over 30 years

    My cash on cash ROI goals require me to outlay as little up front cash as possible and buying furnished homes facilitates achieving that high ROI

    4Reply
  • John UnderwoodPro Member
    Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
    2y
    Quote from @Michael Baum:

    No home runs. Some base hits...

    Story of my life....


     I can tell you about properties I have bought (and am still buying) between $1,300 and $30,000 that are worth 6x and over 1000x more today and have been generating rent every year on top of that appreciation.  

    Some owned are inside ROTH IRA'S so I will never pay or owe ANY tax or capital gains on the profits.

    Some are 1000% tax free profit, before adding in the accumulated tax free rental income, If you finding better investments, I'd love to hear the details.

    I tried to use a financial calculator once, it just got real hot and burst into flames.

    3Reply
  • Tom Dieringer
    OP
    Investor · OR · Member since 2020 · 61 posts · 32 votes
    2y
    Quote from @John Underwood:

    I tried to use a financial calculator once, it just got real hot and burst into flames.

    :D
    Super impressive - congrats.  I'll continue to pay attention to your posts with that type of track record!
    0Reply
  • Garrett BrownPro Member
    Rental Property Investor · Houston, TX · Member since 2024 · 505 posts · 551 votes
    2y

    Welcome to the forums Tom! 

    I would say option A has been successful for me, but my best ground rule double (I don't think I have a home run yet) was land hacking, essentially. I bought a house on 10 acres with 5 % owner occupied down. I fixed the house up some and eventually rented it out for around 60k revenue a year. I used the cash I saved to build a geodome on the land that brings in almost 80k revenue a year. Then, I was able to put a mirror cabin in the back that brings in almost 100k a year.

    My mistake in the end was I should have build a more equitable unique cabin instead of the geo dome to start but I also love my dome's performance. We still have land to build on and have all the infrastructure set up, mainly from our prior builds, to make it even cheaper. 

    [email protected]
    BiggerPockets
    3Reply
  • Stephen KeigheryBusiness Member
    Rental Property Investor · New Orleans, LA · Member since 2018 · 716 posts · 555 votes
    2y

    I bought an STR I was staying in directly from the owner on a lease option. I lived there a few years then turned it back into an STR. I mainly do long term rentals but this feels in my lap and has been great.

    Home Buyer Louisiana4.855 Reviews
    WebsiteView Page
    2Reply
  • V.G JasonPro Member
    Investor · Member since 2022 · 3k+ posts · 3k+ votes
    2y
    Quote from @Tom Dieringer:
    Quote from @V.G Jason:

    Great comment, V.G.  This is what my gut's been telling me, but gut + advice from seasoned pro's = higher odds of success.  Thank you!

    I disagree on the latter part-- seasoned pro's are likely from post GR. They got caught up more by luck and happenstance than pure skill. I'm 1.75 years into REI, but I'm in a long time and mean long time in asset management. The former part--gut-- is going to be the underlying root of your success. If you really believe and understand how to manage downside, you will succeed because that's your only option.

    3Reply
  • Collin HaysBusiness Member
    Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes
    2y

    In the height of the Gatlinburg bubble, I bought a place for $230K and sold it 5 months later for $370K. 👀

    I never even drove past the place, much less set foot in it.  🤣

    Bought a Lexus LX 600 with the proceeds.  😂😂


    [email protected]806-672-7102
    SMOKY MOUNTAIN FALLS INC.51 Review
    WebsiteView Page
    3Reply
  • Garrett BrownPro Member
    Rental Property Investor · Houston, TX · Member since 2024 · 505 posts · 551 votes
    2y
    Quote from @Collin Hays:

    In the height of the Gatlinburg bubble, I bought a place for $230K and sold it 5 months later for $370K. 👀

    I never even drove past the place, much less set foot in it.  🤣

    Bought a Lexus LX 600 with the proceeds.  😂😂



     That is what I would consider a home run, basically lol.

    Nice! 

    [email protected]
    BiggerPockets
    0Reply
  • Collin HaysBusiness Member
    Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes
    2y
    Quote from @Garrett Brown:
    Quote from @Collin Hays:

    In the height of the Gatlinburg bubble, I bought a place for $230K and sold it 5 months later for $370K. 👀

    I never even drove past the place, much less set foot in it.  🤣

    Bought a Lexus LX 600 with the proceeds.  😂😂



     That is what I would consider a home run, basically lol.

    Nice! 


     Indeed.  And I've kissed a few toads, too.

    [email protected]806-672-7102
    SMOKY MOUNTAIN FALLS INC.51 Review
    WebsiteView Page
    0Reply
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