STR Flips - Thoughts?

Question

Hello BP'ers-

I would love your thoughts!

I am a real estate broker living in a resort mountain valley in Colorado (Vail). It is an interesting place for flips because prices are super high but often buyers (second home owners) do want want to remodel a home. They are turned off by the high construction costs but primarily, they just want to enjoy their vacations and not do a remodel. Often times an outdated condo will sit on the market... which is in direct contrast to Denver, where outdated homes are often quickly eaten up by investors.

My overall plan is to flip for the next year or two before I start holding (brrrrr'ing) to increase my cash situation. I'm liking the idea of buying an outdated condo, fully furnishing it (down to the silverware) and selling it to second home owners who very often rent them out. I don't necessarily consider them Investors, like on BP, because typically they are just wanting to re-coup some money on their dream vacation home during the months that they aren't in town.

Any thoughts from STR peeps? Or general thoughts at all?

I've been in real estate for a very long time but I'm just dove into investing about a year ago. One under my belt.

Ryan Thomson · Answer

What if you got a young person to team up with you! They buy the condo as a primary residence and together you only have to put 5% down. Then you can flip it while they live in it (and maybe they help). Then you move on to the next one the next year. And maybe instead of selling you turn it into a STR and make great cashflow return on only 5% down. I have a handy friend who lives in Vail that actually might be interested.

Will Barnard · Answer

Looks like you may have found a nice niche in your market. Start talking to potential buyers and get a buyers list going with their criterias. Then go find the dated deal that fits that criteria, fix it and flip to them. You also have the commissions paycheck too so you are generating multiple income streams from this niche.

Evan Polaski · Answer

@Jamie Salyer, I think there is certainly a market for this for all the reasons you mentioned. This is synonymous with the turnkey providers, but obviously with specific additional needs. Where I would see this being most beneficial is not only buying, renovating, furnishing, etc, but then also starting to operate as a STR to show perspective buyers what their income can be by continuing to rent when not using. And from a "increase your cash situation" you could be the manager after sale, so you can not only profit on the sale, but retain cash flow from managing the STR as well.

Many resort towns have agencies like this. I was in South Haven, MI last summer, and the vacation rental providers were all agencies too that managed the rentals, as well as listed for sale.

Steve K. · Answer

@Jamie Salyer Are you concerned about the talk of a moratorium on STRs in Vail? Many of us on the Front Range have switched to medium term (30+ days) as restrictions have increased. That could be plan B.

Jamie Salyer · Answer

@Will Barnard Thank you Will, yes!! :) I really appreciate your input.

Jamie Salyer · Answer

@Ryan Thomson Hmmm, interesting thoughts! I would definitely love to meet your handy friend in Vail, for sure.

Jamie Salyer · Answer

@Evan Polaski Thank you so much for your input!! I love the idea of rolling out the STR while its on the market once the rehab is complete. It makes it a bit trickier to show but could work around that.

STR Flips - Thoughts?

STR Flips - Thoughts?

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@Evan Polaski Thank you so much for your input!! I love the idea of rolling out the STR while its on the market once the rehab is complete. It makes it a bit trickier to show but could work around that.

@Will Barnard Thank you Will, yes!! :) I really appreciate your input.