All Forum Posts by: Brandon Patrick

Hello All,

I'm the owner of 3 Airbnb properties that I've acquired and renovated over the past 6 years. Initially it has been great, so great it has prompted me to leave my aerospace career in Jan 2022 to focus on real estate and remodeling. However, like many others, I've noticed the recent economic challenges impacting Airbnb hosts. In an effort to stay ahead I've tried renovating one of my properties since it's easier for me being a remodel contractor. While the process of fully renovating one of my properties was exciting, the outcome didn't match my anticipated returns. Although I was able to increase the nightly rates, the issue lies in the reduced number of booked dates compared to my similar non renovated listings. It appears that guests are more inclined towards a good deal than a nice home. This realization has led me to reevaluate my approach and seek strategies to strike a balance between attracting guests and maintaining a competitive edge in the market. What's confusing is the continuous increase in new Airbnb listings, even in states like Arizona, which ranks second in the US for Airbnb crashes.

After seven years in the Marine Corps waiting for rates to drop is not my style. Instead of sitting around I've ventured into property flipping to save up funds for when rates drop. However, the current flipping status isn't proving profitable even at listing below ARV. As a contractor I was expecting 15% profit, but my flipped properties are just sitting accumulating 13% interest on private investor loans. That being said I find it perplexing that other property flippers, who seemingly outbid me on deals, are managing to turn a profit. It's mind boggling to comprehend how their strategies are allowing them to profit in a competitive market.

Amidst these challenges, and with my son in our lives now I'm determined to not be a failure to my family. I'm highly motivated to forward, but have no direction at this point and in todays world it appears that many other property flippers and Airbnb hosts are hesitant to share their insights and advice. My intention here isn't to complain or come across as privileged. I am just trying to add context to my current situation and see what advice the cummunity has

Thank you so much.

Hello all,

I am doing my first flip in a 55+ community. I definitely want to flip the property in a way where the 55+ owners can benefit the most. I plan to redo the flooring in the house. It currently has tile with carpet. My question is do I replace the carpet or remove it?

Hello,

I am looking for recommendations for a rental Property CPA. I have been burned before with sketchy CPA's putting me into something I shouldn't be in just to charge me $1000 then to have to pay again to get me out of it.

 Anthony,

Thank you for that update. I guess I had my information wrong. Looks like I'll have to do a 1031 on these two properties.

 Hello Dave,

Thank you for the update. Truthfully I should know this since you helped me out with a 1031 before. Looks like I'll be contacting you soon.

 Hello Kathleen,

Thank you very much for the advice. With the past 5 years of tax returns, I plan on getting a mortgage on the next property. If possible I would like to find a property that needs some improvements. $400k down, $100k in renovations and get a mortgage for the rest. I haven't gotten to that point yet so I could be looking at a duplex or maybe even a fourplex. 

 Hello,

I have owned both of my properties for over 5 years and if I am correct with being married we don't pay capital gains on the first $500k. If I am wrong I would do 1031 especially with there being so much inventory in today's market. Definitely hard to achieve that 45 day turn over when its a sellers market

I grew up and lived most of my life in California. The only property I ever owned was for my primary. I Owned investments 1 in Virginia, and 4 in Arizona. Yes California has tons of money, but I just don't think there is much to be made for new investors. Just my opinion, It's hard to break even for what you pay in today's prices. All your profits will go to property tax and interest. Unless you have tons of capital for cash pruchase and renovations. Let's just say you pay $500k for a 2-bedroom home. Your payment will be at least $3000 with the ridiculous property tax and interest. If the home is renovated you might get $2500. $500 out-of-pocket cost for investment isn't the worst, that is if you don't get a squatter. California has the most relaxed squatter laws. My wife's hairdresser found a good deal on a property with current tenants. Thought they were buying their forever home for their growing family at a deal. After closing as new owners they assumed the tenant's current lease with 4 months remaining. Needless to say, the renters never paid. Two months go by the lender now wants their mortgage payments. 3,4,5,6,7 months go by. 6 mortgage payments and $15k in lawyer fees. Covid hits. Care act goes into place. 17 months go by and behind on mortgage payments they end up selling it to an investor. Stray far away from single-family investments. Unless you get the Unicorn for a rehab complex or commercial property. California can be a great state, but just not to new investors. I am a Loan Officer so I run numbers. Never made sense to invest heavily in California. You will have better luck purchasing a coin laundry in the right area.

Hello,

I just want to start off with saying it is an honor to be part of a community with so many like-minded investors willing to share their knowledge.

I currently have two Airbnb single-family properties in Lake Havasu City, Az. Due to the fact I bought them years ago, I still make a decent return of 15%-20% when I factor in pre and post-covid years. I don't like to include 2020 and 2021 due to the fact that everyone was flocking to Arizona since California was closed for Covid bringing it a lot more bookings than in previous years. Lake Havasu City is a beautiful town, but a party town in the summer which can bring many problems. This means I spend many hours dealing with rowdy guests and damaged property on top of managing the properties 200 miles away from where I live in The PHX area. With the long hours, the long drives, and headaches it is still profitable pushing me to think about a third property, but I am already paying two mortgages, two interest rates, two pool guys, two utility bills, and so on. 

If I sold both properties and pay the realtor commission I might be able to walk away with $500k that I won't have to pay taxes on. I Know some people have their opinions about Grant Cordone, but one thing that stuck from his story is he started with a single-family home, to two, then multifamily. 
Now that I know how to manage much of my time to investment properties and have a good amount of capital, what is my next big move? Continue runnings hotels or move on to something bigger. Maybe something that is closer to where I live and easier to manage.

Hello,

I am interested in selling my two Airbnb properties and buying an apartment complex.  After that I don't plan on doing any other transaction for a couple years unless it is to sell my primary residence for a bigger home with a growing family. I was thinking of getting my realtor's license for my own deals, but I don't think I have the time since I am a full time Loan officer. 

Right now a lot of selling agents are offering 1% commission with the buying agent receiving 3%. Both of my investments are located in a Lake Town valued between $550k-$600k. My question is can I or should I try to negotiate the commission with the buying agent or agents of my two properties? Lets just say in today's market I sell both of my homes for $1M. That would be a total of $40,000. 

Side note. I know some people might have different opinions on Airbnb's and apartments, but as Airbnb owners know it can come with alot of work. Especially since mine are 200 miles away from where I live in vacation town. Party goers in the summer and snow birds in the winter. It just takes too much of my time dealing with routy guest and damaged property.  Instead of hiring a management company 20% in the summer and 15% in the winter I prefer to just roll both of them into an apartment complex near by that I can easily maintain even if it means less of a return.