New to Short-term Rental

[Erik Petrovich]

This last week my wife and I looked at a couple potential Flip/BRRRR properties in Panama City, FL. One is interesting but we are not going to pursue. I have been analyzing these type deals for last several months and showing numbers to my wife. She is a very "safe" person and I think the acquisition and rehab costs scare her. So, after walking these properties we went for lunch in Panama City Beach where our discussion turned to buying a condo on the beach (we live about 1 1/2 hours away). This in turn led to a discussion about a short-term rental. She is all excited and we were arranging to put an offer in on one (after doing an analysis on cash flow) but found out we had to have 25% down on vacation homes in FL. Not to be deterred we asked for seller financing with $15K down. Our offer was not accepted as owner is trying to cash out for another investment.

All this to ask is there another source to help finance that may make sense.  We will have the 25% down in 5 months but that will then be tourist season.  Would like to get into one soonish.  Another issue is we just moved to FL so we haven’t really started networking yet so private money and partnerships might be a bit problematic.

[Daniel Green]

Getting started in real estate is an emotional roller coaster ride that folks don't really talk about.  They talk about rules of thumbs (heuristics is a fancy term) for buying real estate but not the feelings in your gut.  The typical cycle is this:
- Look around at properties.
- Unsure/anxiety about whether anything is a "good" deal.
- Read a ton of blog posts- A lot with conflicting info.
- Listen to pod casts to try and figure out what others are doing.
- Feel insecure that you don't have enough money to invest in real estate.  Wonder if you should just play it safe and just do your 9-5 job.
- Consider other investments.  Maybe I should just play the market?
- Do nothing for awhile because life is busy and there are plenty of distractions.
- Watch T.V. at the same time you look at real estate listings.
- Float the idea about real estate investing to relatives who have no experience and they say it "sounds risky"
- Get back into your everyday life and after you know it, a few years go by.
- Consider short term rentals or maybe long term rentals or maybe buy land and build something or perhaps trailer parks are hot now...or maybe passive investing in apartment buildings?

At some point you have to take the plunge.  No investment is a "slam dunk."  You will learn the most by doing.  The trap I fell into was "analysis paralysis."  It's good to minimize risk so do a ton of analysis but at some point you have to trust your numbers and that odd are very good there will be no "disasters."

After you've looked at the numbers- worst case, best case, middle case- make a move. If you've done your research you'll likely not be off by much.  The first time you invest will help you build confidence.  Talk to people who have been in the space for awhile.  Real estate investors generally are happy to share.  Go to meet-ups (zoom meetings now) and ask questions.  I learned the most from other investors but make sure it's people who own real estate and not people like you who haven't done anything yet.  Out of any real estate meet-up 80% haven't done anything and 20% are true real estate investors.

This will take a bit of bravery.  Especially if you are investing a sizeable portion of your savings which is what most first time investors are doing.  It will seem like some crazy gamble but it is not.