All Forum Posts by: AJ Wong

We're entering the final lap of the year — and for STR investors, Q4 isn't just about holiday bookings. It's about locking in material participation for 2025. Miss it, and the STR loophole benefit gets pushed a full year out.

Since the ‘Big Beautiful Bill’ renewed 100% bonus depreciation our phone has been ringing non-stop with short term rental investor interest. Fortunately we've been anticipating the return since prior to the election - and are well prepared to support investor searches and execution on a tight timeline - but to ensure it’s also the 'right' investment- requires added attentiveness, due diligence and tenacity to execute.

Here’s what savvy investors are doing now:

Closing Before the Finish Line
Deals that close by October should give investors time to rack up management hours and qualify for 2025. Anything purchased afterward? Too late — no 2025 loophole advantage. That means you need to be in contract within the next 6 weeks or so to realistically close and meet material participation.

Logging Hours with Intention
Material participation isn’t just a buzzword — it’s hours in the books. Q4 is where investors double down on active involvement: design, setting up systems, coordinating contractors, managing guest stays, and tracking everything. Speak with your tax professional for suggestions and whether activities are valid.

Targeting Licensed, Zoned STRs
Not all rentals are created equal. Properties with licenses, zoning compliance, and a history of bookings give you the best chance at immediate performance and tax eligibility. We’ve seen a strong uptick in pending sales - particularly for luxury STRs in the past month.

Strategizing 1031 Exchanges
Rolling gains? Align your 1031X timeline so your replacement property qualifies for STR material participation in the same tax year. Mistime it, and you'll watch a golden opportunity slip. Our most recent luxury sale was a combination of exchange intended for STR usages. This particular clients timing was optimal as they were in contract prior to the Bill passing and closed last week.

Are you trying to cross the STR finish line this year?

You're doing a great job Mr. Brown! The quality and depth of STR insight has improved considerably and we truly appreciate your efforts. Keep it up!

I have one theme that maybe is too deep lol..but keeps coming up from many of our STR investors..where does weather and climate risk factor? Or does it..things like costs of insuring and areas that might be both less prone or more likely to experience migration in the coming decades? For example: Not sure it counts as 'weather' but some of my clients are understandably have a redline about being out of the Tsunami zone. Another is prime oceanfront homes along the Coast that have increasing erosion concerns - some that are perilously close to the properties. There is literally less oceanfront...but it is softly driving demand in areas unaffected by that type of risk. In fact- one of clients even purchased an elevated oceanfront property, at least partly in response to being affected by the LA Fires..There was a great series by Yahoo a few years ago entitled: Finding Safe Haven in the Climate Change Future where they analyzed each region by risk and 'benefit.' It was produced several years a go and I'd be super interested to see how the community feels or has concerns or related considerations before investing in a region or area? Such as excluding properties in flood zones or high wildfire risk areas?

I've been increasingly incorporating data from https://firststreet.org/ into analysis and projections. They have some impactful insight.

Spent A LOT of time in Gainesville! 

Fantastic new post about an evolving and very strategic investment strategy around STR markets in College Football towns on the BP Bigger Stays Blog today! They are really providing some excellent insight into short term rentals and to their credit the SEC Schools and markets are true powerhouses. 

We've touched on this topic a few times regarding Eugene OR due to having THE #1 NIL money in the country - anchored by Mr. Knight and Nike. We are generally high on the trajectory of Eugene as a still 'affordable' PNW/West Coast town that is extremely family friendly and under-recognized in STR markets due to the extremely high volume of track and field events at Hayward Field (event calendar below). With nearly $1B!? in NIL funds there is also a lot of demand for long term/mid term housing for: athletes, coaches, sponsors, scouts, agents and otherwise - in a region that is chronically luxury home deficient.

As for vacation rentals - If you've ever tried finding a hotel in Eugene during one of these events - the demand speaks for itself. Lane county is receptive and obtaining an STR permit is generally quite straightforward. Another Lane county destination offering close proximity to Eugene of note is Florence Oregon. Currently a low barrier to entry for STRs and within an hour of the airport - visitors find a plethora of recreational activities and temperatures typically 20-30 degrees cooler!

Here is a snap shot of Eugene area sporting events in 2026: 

Agree with Mary & Andrew - Paid AirDNA Data can get very granular. 

Also - try connecting with a top local STR PM in the area that can provide a strong written projection with comps (of ideally homes they manage.) Good luck!

 You're welcome. BP is doing a great job with content lately! 

Did anyone else listen to the PB Podcast about 1% rates? 

I thought it provided some really great insight and ultimately concluded anticipate for rates to stay within the current 6.5% range +/- 

I think if borrowers were able to qualify with rates beginning with a five (for 30 year) that buyer and investor demand would accelerate significantly. 

I have seen some ver attractive conforming 5/1 and 7/1 ARM pricing - would you consider a ARM now?

Link to the article and Cast is here. 

 Well said. Personally - all recent personal and professional victories are by tap out - but it only came after some heavy and total losses, deep retrospect and recommitment to the crafts. 

I’ve been investing in real estate and practicing Brazilian Jiu Jitsu for about the same amount of time - nearly two decades. With both - I haven’t been as consistent as I would like - but I remain committed and my games' tend to grow in concentrated periods of intense effort and dedication. Each has sharpened (and humbled!) my ability to regulate emotions, apply strategic pressure, and protect my physical, mental, spiritual, and financial well-being. I am not black-belt level in either yet - but mastery is inevitable when one keeps showing up. 

Today’s flow touches on Seller Concessions: A technique that investors (of any degree) can utilize to incentivize investments into submission!

In real estate, seller concessions are often sold as a sweetener— extra cash from the seller to cover closing costs or repairs. But for leveraged investors, they’re not just a perk; they’re a weapon. Used correctly, they can improve cash flow, reduce capital outlay, and boost returns. Used poorly, they can quietly eat into your deal for decades.

What a Seller Concession Really Is - A seller concession is not “free money.” In most cases, it’s simply a price adjustment in disguise—one that your lender allows you to apply toward certain costs like closing fees, prepaid expenses, or interest rate buydowns. With most conventional mortgages the maximum seller concession is 2%, second homes can be 3%+ and primaries can be 6%+ (although cannot contribute to the actual down payment percentage).

If you’re financing the property, part of that concession is effectively rolled into your mortgage. Translation: you could be paying interest on it for the next 15–30 years. However - depending on how long investors are in a particular loan will factor into the recapture or recuperation 

The Good: Strategic Uses That Boost ROI - Think of seller concession BJJ as redirecting the seller's give into your financial gain.

Examples include:

• Rate Buydowns – Use the credit to permanently lower your interest rate or lock in a multi-year buydown, improving cash flow immediately.
• Revenue-Critical Repairs – Fund upgrades that directly impact booking rates and occupancy for STRs (hot tub, furniture, curb appeal).
• Preserve Cash Reserves – Cover closing costs with the concession so your capital stays in your pocket for emergencies or expansion.

The Bad: Illusion of a Better Deal - A $20,000 concession feels good—until you realize the seller simply padded the purchase price to make it happen. If that inflated value pushes you above market comps, you’re now overleveraged and your “deal” is already underwater.

For example on our most recent primary purchase even with our 2.5% concession the home still appraised for $25K more than our purchase price :) In the event the home does not appraise - parties would need to renegotiate terms or revise the concession. 

The Master Move: Anchor the Price, Then Negotiate Concessions

In martial arts, you use your opponent’s momentum against them. In real estate, you lock in a fair purchase price first, then negotiate a concession that actually serves your investment goals - or that is justified through inspections or required repairs or anticipated cots. This keeps your loan amount realistic (and capital requirements low) while extracting maximum value from the concession.

Seller concessions can make or break your ROI—especially for leveraged investors. They're a tool, not a trophy. Use them to strengthen your position, increase cash flow, or preserve liquidity. Increasingly sellers are more open supporting creative or collaborative solutions towards mutual acceptance and compromise towards closings.