All Forum Posts by: Andy Whitcomb

I think you're on the right track, but in my opinion having a site for your listings is pointless unless you are taking direct bookings. In fact, it should be the main reason you go through the effort of creating a website (I also think everyone should take direct bookings). 

I would recommend using a PMS like Guesty, Lodgify, IGMS, Hostfully, etc. I personally use Lodgify and it works fine, but there may be a better one out there. I would (and do) have all of my properties listed on one site, but with the ability to send out a link to each particular property. That way guests can see all of your properties in one spot. This is especially essential if you are developing a brand. 

Yes, I have been hearing some grumblings like that. I think it is a result of a landslide of investors who jumped in to the STR/Airbnb game in the last couple years because they saw dollar signs, but never learned to operate their properties as a legit hospitality business. As a result, guests are getting a bad taste in their mouth because they can sense when someone is just in it for the returns, and not focused on creating an incredible guest experience.

To me these are just growing pains, part of the process of the industry maturing. Eventually the bad operators, the ones with shiny object syndrome, will be forced to either improve or get out of the industry. Then the industry will be stronger than ever, with a balanced supply (quality supply) and healthy demand. 

In the mean time, be a good operator! Offer unique, well designed listings and focus on creating the best possible experience for your guest. And as I always say, build an email list, take direct bookings, and DON'T rely 100% on airbnb.

You can minimize your risk exposure by being a pro operator.  On our properties we have been very diligent to do things that will put us in an strong position during a downturn.  The main things we did are: be one of the best properties in the area (interesting and well designed), being proactive about your marketing (be so popular that you have a waiting list), and "own your customer". If you rely entirely on Airbnb you are basically renting their customer. If you start taking direct bookings that customer becomes yours and you can not get their direct contact info for future bookings, marketing, etc. 

One your big risks of doing an Airbnb is the risk of a single platform. Market could be buzzing along and you get kicked off the platform, creating a massive economic downturn for just you. You can reduce that by listing on multiple platforms and eliminate it if you take direct bookings and build up a big list. 

There are so many factors that go into this.. it's very hard to make generalizations and have them be close to accurate. Yes it is market dependent, but it goes much deeper than that. Not all STR's are created equal and the guest avatar of each property will determine how successful it is during any given downturn. You don't need to be in the industry for 15 years to see examples of that. We had a house in an urban area of Seattle that was 100% occupied and pumping out $20k/mo on average, then in a single day (march 2020) that dropped to zero and stayed there until we closed the doors. Meanwhile, some of our other rentals spiked and we increased rates.

You need to start by identifying to what strategy you're using, who is your guest, and why are they staying there. From there you can start to assess your risk profile. 

In my example above, our typical guest was coming to Seattle for one of the following: going to a convention, going to a large sporting event, or just coming to visit the local scene of restaurants and nightlife.  Of course those all got shut down, and in Seattle it was for 6-12 months. Had we been doing mid-term rentals we would have seen an increase in demand (traveling nurses). 

I'm not a big fan of the advanced guest screening procedures. In my experience it tends to limit legitimate guest inquiries and just leads to unnecessary correspondence with would-be guests who can't book for whatever reason. 

I do like that you can see which "category" they've got you listed in. So many people are complaining of being excluded from searches because they don't fit into one of Airbnb's preferred categories, so now you can know if you're in one or more, or not. I recommend that all hosts do whatever they can to fit into one of those categories, especially when buying or building a new STR.

Hey guys! I'm negotiating with a seller on the purchase of a property that will be a BRRRR using short term seller financing to purchase. I'm planning to negotiate a balloon payment 1 year from closing, but I'd like to include in our contract an option to extend.

An obvious option would be something like 1pt per month (or some variation on that), which I've seen hard money lenders do, but I'm wondering if anyone has any other ideas on how this could be structured? The seller is an agent/investor with a fairly aggressive negotiating style, and will mostly likely push for an extreme (multiple points) extension penalty. So I'm looking for alternative strategies that I can offer in case he gets stuck on something too extreme.

Any creative financing experts have ideas on this?

Their interest rates start at 4.5, and go up depending on your personal credit score and the LTV.
Yes, they qualify the loan off the income generated, similar to a commercial loan. If it’s a purchase, they use AirDNA to determine the projected income. They will also look at your personal track record and take that into consideration, especially if you have vacation rentals in a similar style and/or area.
If it’s a refi then they use your actual numbers. 

@Jessica Parker

Yes I’ve looked in to getting a line of credit on my STVR properties, but I don’t think I have enough equity to get one of a decent size.

I have been doing a lot of research on lenders for vacation rentals, and I have found two that I’m going to try out.

The biggest one, and most popular is Visio lending. I have heard this is the go-to STVR lender as they qualify the loan based on current (if it's a refi) or projected (if it's a purchase) vacation rental income. They definitely make you pay for it, with higher closing costs and a higher interest-rate than a conventional loan. but other than that it seems like a great option. 75-80% LTV on purchase and 70-75% LTV on refi, and they'll refi after only 1 month of operating as a vacation rental.

The other lender is very similar from what I can tell, it’s called Host Financial. These guys only lend on vacation rentals, and from what I’ve heard they will even do rehabs. I have not yet spoken to them, but i plan to do that soon.

Yes you can use as STVR

If DTI is the issue you'll need a lender who will qualify the property based on the projected Str income alone (plus your personal credit score).

In my research talking to STVR experts that I know, Visio Lending is the best (although I’ve recently heard Host Financial is decent too). While I haven’t personally used them yet, I am planning to test out Visio on a refi soon.

Keep in mind, you’ll pay higher closing costs and higher interest with these type of loans, but you can’t have everything!

Also,if you use Visio make sure you go to them directly, rather than through a broker. Otherwise you’re just getting the same loan at a higher price.

Other than that you’ll need to just call around to local banks (you’re looking for a portfolio lenders) to see if anyone has an appetite to lend on STVR properties.