All Forum Posts by: Alex S.

This problem gets easier to solve when you get past 1-2 units.  Frankly, you'll probably pay a premium if you're calling a handyman once a month vs. 2x/week.  Same with the cleaning crew!

There is no "should" when it comes to profit.

How much do you want to make and how will you get there?  How many hours per week of opportunity cost will this business cost you?  Is there future growth potential?

Very complex question and only you have the answer!

Totally agree, commercial zoning is very helpful! I am negotiating a deal right now that is mixed-use/commercial (medical office on bottom floor, nice apartment on top). I feel little to no risk of regulation hitting the STR on the top because "hotel/motel/BnB" are included in the permitted uses.

Speaking of Avery Carl...her podcast The Short Term Show just got started, but so far I think it has been really good.  You should check it out.

I'm trying to learn more about syndicating as it relates to STRs as well.  In some ways, it is no different than syndicating LTRs, but you are right to dig deeper into the unique risks/rewards.

Thus far in my research the answer to all of those questions is "it depends."

I just finished reading "Raising Private Capital" by Matt Faircloth and he has multiple suggested deal structures to study.  At the end of the day, different investors will want different things, but having some options in your hip pocket might help to guide the conversation.

As far as regulatory risk, my opinion is that you MUST have a backup option if your STRs are regulated out of business.  Even if that option is to sell.  Medium-term is an option in some areas, or even furnished long-term.  The regulatory environment is just so dynamic at this point that a backup strategy should be included in any syndication agreement.

We typically add value through renovation, but there are other ways.  Buying in the path of growth, turning a 4-plex into 5+, improving management, etc.

You may not have done anything "illegal" with #1, but you "agreed on a price" and then backed out. They wasted tons of time with you only to have you find a better deal. Despite what residential realtors will tell you, SFR contracts are very easy to terminate and hard to enforce. It is almost never worth it to enforce a SFR real estate contract with litigation...in your case, definitely not worth it.

Consider that your word is your bond and should be more meaningful than a signed contract.  Move on to the next property with that in mind.

I know this doesn't have to do with real estate, but you make a great point about feeding their brain vs. demanding their emotions.  As a parent to young kids just starting their school years...I took this to heart.

My wife is a designer and has done all of our STRs.  It is stunning what she can do to a boring space.  I am design illiterate and often am caught saying things like, "a brownish-green toilet flushes JUST the same as a white one."

While she hasn't focused on STRs in her experience, it is a great niche for someone and one that we've considered. Obviously, very market dependent. Spending $15K on a designer in addition to the price of the furniture would be absurd for an STR that pulls in $20K/yr gross. However, if you're competing in the Smokies with cabins pulling in $100K/yr...it is a no-brainer to get a designer in there and make your cabin the FIRST STR that vacationers want to book.

Step 1: Call your local city and county planning division and ask them about their regulations for short-term rentals/airbnb.

Step 2: Use the ENEMY method (on youtube) to determine competition and price and quality of unit you'd need to build.  You can also check AirDNA, Rabbu, alltherooms, but search this forum...they have their limits.

Step 3: Find a cleaning crew and a handyman

Step 4: Sign up for Hospitable.com or some other automation software.  Spend the time on the front-end setting everything up with check-in instructions, notification to cleaning crew, etc

Now you make 3x what a LTR makes...good work.

The property purchased must be in a different market than your primary residence.  Additionally, you can only buy one residence per market.

5% is not possible unless it is a primary residence.  The only way to get less money down is with private money loans.  This would be an agreement between you (the deal provider) and someone else (the cash provider) to loan you money as debt for an agreed upon interest rate.  Usually friends, family, colleagues, etc...not a bank.