Introducing Myself- Hi I'm Rachael, Aspiring STR Investor

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Introducing Myself- Hi I'm Rachael, Aspiring STR Investor

Rachael Lucas
Raleigh, NC · Member since 2019 · 8 posts · 4 votes

Hi everyone! I've been a member for awhile, but i have not posted to date. I have one LTR and am working to make my second investment a STR in coastal NC. I am still doing some market research to narrow down my location and am therefore looking for any insight be it advice or warning, I'm open to it all. I love learning from people who have been through it :).

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Travis TimmonsPro Member
Rental Property Investor · Ellsworth, ME · Member since 2021 · 1k+ posts · 2k+ votes
2y

I think that we are in a "What can you do that is really hard?" market. 20% is going to be very, very difficult. You're going to have to do some blocking tackling to get there.

I would do some research on square footage and road frontage needed for parceling off additional lots (STR the house, sell off or build on additional lots). Maybe look into properties that have 3 or 4 bedrooms with 1.5 baths and the potential to convert the half bath to a full bathroom.

Also remember that it is death by 1000 cuts getting a property to market. You're going to bleed cash before you make a dime of revenue. That "Holy crap! This better work; we are spending so much money!" feeling is going to be real. 

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  • Jay SevilleBusiness Member
    Wilmington, NC · Member since 2024 · 13 posts · 3 votes
    2y

    One used to be able to cash flow with 10-15%. Now it usually takes 35%. Generally prices are too high to hit ideal numbers on most beaches, however there is usually a good vacation rental or 2 on each beach. There may be 50 listings and 2 of them are ideal for STR. Then there are general ROI trends on various beaches. Some might be grossing 7% while 11% is more frequent at other beaches....One can shoot for $30,000/room for oceanfronts with pools for example. Without the pool it might be 25,000. However each home and scenario is case by case and must be analyzed.

    There are also particular property managers to avoid based on many clients' experiences the past few years.

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    1Reply
  • Jay SevilleBusiness Member
    Wilmington, NC · Member since 2024 · 13 posts · 3 votes
    2y

    there are actually good listings for sale now that are "no brainers." They are in a variety of price ranges.  Buyer changed his plans to November after we had identified and run the numbers on some homes.

    Ocean Views Real Estate, Inc512 Reviews
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  • Michael Kazalas
    Pittsburgh, PA · Member since 2015 · 24 posts · 4 votes
    2y

    Hi Rachael! Do you have desired cashflow % for the STR and are you going to outsource property management or self manage?

    0Reply
  • Savannah Holzer
    Lender · Austin, TX · Member since 2023 · 233 posts · 96 votes
    2y

    Hey Rachael! Coastal NC can be a great market, but it’s important to research local regulations on STRs since some areas have restrictions or require permits. I’d also recommend looking into off-season demand, as coastal markets can fluctuate. It might help to connect with local property managers who handle STRs to get a sense of what types of properties perform best. 

    Would also love to help with questions/advice on financing!

    2Reply
  • Madri Koppe
    Interior Decorator · CA · Member since 2020 · 78 posts · 30 votes
    2y

    I’m not familiar with that particular market but I generally recommend to do your research and run your numbers across multiple scenarios to see if the property still works and to have some back up/exit strategies mapped out before going into any deal. 

    0Reply
  • Rachael Lucas
    OP
    Raleigh, NC · Member since 2019 · 8 posts · 4 votes
    2y
    Quote from @Jay Seville:

    there are actually good listings for sale now that are "no brainers." They are in a variety of price ranges.  Buyer changed his plans to November after we had identified and run the numbers on some homes.

    Thank you for the insight! I’m happy to connect to discuss properties you are referring to. I think I am open on exact location as long as the deal makes sense, but I also was to understand all my limitations/STR friendliness of different areas. 
    0Reply
  • Rachael Lucas
    OP
    Raleigh, NC · Member since 2019 · 8 posts · 4 votes
    2y
    Quote from @Michael Kazalas:

    Hi Rachael! Do you have desired cashflow % for the STR and are you going to outsource property management or self manage?


    Hi Michael! I want to self manage, ideally. I would love a cash on cash return of about 20%.  I know that’s not always easy. 

    1Reply
  • Rachael Lucas
    OP
    Raleigh, NC · Member since 2019 · 8 posts · 4 votes
    2y
    Quote from @Savannah Holzer:

    Hey Rachael! Coastal NC can be a great market, but it’s important to research local regulations on STRs since some areas have restrictions or require permits. I’d also recommend looking into off-season demand, as coastal markets can fluctuate. It might help to connect with local property managers who handle STRs to get a sense of what types of properties perform best. 

    Would also love to help with questions/advice on financing!


    Hi Savannah! That’s one of my goals for reaching out on BP, advice about those regulations and what areas to choose or avoid based on that and anything really! I am doing my research, but love all the insight!  

    0Reply
  • Mike H.
    Rental Property Investor · Manteno, IL · Member since 2009 · 2k+ posts · 2k+ votes
    2y

    I think ultimately, thats the key. If you're paying retail for a property, its hard to make the numbers really work. STR changed that rule for a bit there for a run of 3 or 4 years but now even that has come back down to reality.

    The key to investing has always been to buy right. Whether its LTR or STR - if you buy at a discount of around 70 to 75% LTV, you should do ok. If you're paying retail, there are very few markets out there that can give you a reasonable return on your 25% down payment.

    That being said. I always add that if people are truly factoring in all the ways real estate makes you money, then there are some markets that make perfect sense as an investment even if you pay retail.   Just have to run your number on the market and the product type (i.e. small houses versus big houses, etc).

    3Reply
  • Travis TimmonsPro Member
    Rental Property Investor · Ellsworth, ME · Member since 2021 · 1k+ posts · 2k+ votes
    2y

    I think that we are in a "What can you do that is really hard?" market. 20% is going to be very, very difficult. You're going to have to do some blocking tackling to get there.

    I would do some research on square footage and road frontage needed for parceling off additional lots (STR the house, sell off or build on additional lots). Maybe look into properties that have 3 or 4 bedrooms with 1.5 baths and the potential to convert the half bath to a full bathroom.

    Also remember that it is death by 1000 cuts getting a property to market. You're going to bleed cash before you make a dime of revenue. That "Holy crap! This better work; we are spending so much money!" feeling is going to be real. 

    4Reply
  • Mark Brown
    Member since 2022 · 30 posts · 18 votes
    2y

    Hey Rachael!

    If I were you I would get a list of the top 5 largest hospitals near you (ask google or LLM). Then I would take those zipcodes and look for properties near there. If you can get fixer-upper in an otherwise safe (looking) Class A/B neighborhood, you could put in some sweat equity then rent that out. The downpayment should be less since it should cost less and you can use what you save to rennovate the airbnb.

    1Reply
  • Andrew SteffensBusiness Member
    Tampa, FL · Member since 2022 · 4k+ posts · 3k+ votes
    2y

    I would say to target something unique in areas that are high demand or at least underserved.

    I would also have your management plan down pat

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    0Reply
  • Marc Bell
    Member since 2024 · 4 posts · 2 votes
    2y
    Quote from @Rachael Lucas:

    Hi everyone! I've been a member for awhile, but i have not posted to date. I have one LTR and am working to make my second investment a STR in coastal NC. I am still doing some market research to narrow down my location and am therefore looking for any insight be it advice or warning, I'm open to it all. I love learning from people who have been through it :).


     Happy to help if I can!

    I'm with STRLocator. We find, acquire, manage and find operators for high-cashflowing AirBnb-approved properties across the US.

    Do a lot of business in the South and Southeast.

    0Reply
  • Marc Bell
    Member since 2024 · 4 posts · 2 votes
    2y
    Quote from @Rachael Lucas:
    Quote from @Michael Kazalas:

    Hi Rachael! Do you have desired cashflow % for the STR and are you going to outsource property management or self manage?


    Hi Michael! I want to self manage, ideally. I would love a cash on cash return of about 20%.  I know that’s not always easy. 


     Yep, not gonna be easy.

    First off I'd advise looking to do arbitrage in your target area first. This will give you a feel for the numbers in realtime.

    Second, I'd advise looking hard at the travel nurse/corporate travel market, as opposed to general tourism market.

    After arbitraging for 6 months to a year you'll have a very good idea of where to find your 20% CoC opportunity.

    1Reply
  • Daniel Netzer
    Developer · Bend · Member since 2023 · 64 posts · 12 votes
    2y
    Quote from @Rachael Lucas:
    Quote from @Michael Kazalas:

    Hi Rachael! Do you have desired cashflow % for the STR and are you going to outsource property management or self manage?


    Hi Michael! I want to self manage, ideally. I would love a cash on cash return of about 20%.  I know that’s not always easy. 


    You'll probably have to look in an up-and-coming market for 20% ROI. In 2020, I built under $200 a foot with long-term rates in the 3's to get 40% ROI. Today, I couldn't do anything close to this in my area.

    0Reply
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