All Forum Posts by: Dan Maciejewski

Quote from @Tyrek Brown:

Will you recoup the losses for the repair faster with the current property or with other properties?

If you do decide to move into the Atlanta market, are the neighborhoods/appreciation equal or better than the current?

If those two are true, I would say that it's fair to consider moving on. Especially because something like this will most likely be a recurring issue considering the property is near water and you can find a property that's closer to you in Atlanta. 

This is pretty much the answer.  You'll most likely be paying for the repair either way.  Either by fixing it before sale, or reducing the price, or giving a credit.  You can't hide the issue -- you'll have to disclose it.  I absolutely find that it's cheaper to fix prior to sale.  Buyers will add 2-3x the actual cost in their heads, and assume all sorts of other issues, too.

But, if it's better for you to move investments to closer, then that may balance out.  Remember, you'll be re-setting your equity position because of the appreciation over the past few years.  I would at least make sure that anything new will cash flow the same.

Quote from @Drew Sygit:

How'd you only invest $10k?

A VA loan is 0% down. The 10k is 2-3% closing costs - taxes and prepaids. If the property was turnkey, no money to flip it!

"It depends," is always the answer!  

It depends on your goals, how much capital you have to deploy, what your financing is, etc. . .

If you're buying mostly turnkey, good condition properties, you'll need a good amount of capital or credit to get your STR up and running as opposed to a LTR that may already have tenants in place. STR needs furnishings and decorations, and you'll be carrying utilities, electricity, and supplies. The insurance will also be higher. The returns can be better but the risk and initial investment is higher.

LTR is tricky right now. Across the board, SFR or multi-family, you're looking at sub 4% cap rates and interest rates above 6-7%. That's not a recipe for success for most people. That means you're either upside down with no cash flow, or you put a ton of cash in initially to force it to cash flow.

Either way you're banking on long-term appreciation of both property value and rents.  And with the giant boom of appreciation we just saw in the past few years, I wouldn't count on big appreciation in the next few years.

So the smart play would (as always) be to buy an undervalued asset, then add value and increase rents.  What that looks like in real life is buying a dump with low rents in a good location, then getting the tenants out and rehabbing and putting new tenants in.

Definitely seeing great returns and bookings still in Pinellas County.  The beaches always do well and the single family homes close to the beaches on the mainland are doing great, as well.  Coming into season and everyone's looking at full calendars!

They don't come up for sale often.  And I think the last one I saw was selling at a 4 cap a few years ago.  Most that I've seen aren't very updated.  I haven't looked at them in a while, though.

Depending on your price point, the almost completed JW on South Clearwater Beach is still pre-selling luxury "residences."  They are classed as condo-tels.  They will come fully furnished and ready to go.  They will be money makers for sure.  It's a beautiful property.  And I think the owners get a full month of use -- don't quote me on that, though!.

Also, you may want to consider looking at single family homes a bit farther south. West Central Pinellas does very well. Indian Rocks Beach and Indian Shores if you want a property on the beach island, and unincorporated Seminole and Largo are a bit less pricey on the mainland. They all do very well and are still selling at a very decent ROI.

Quote from @Michael Baum:

There are more 1m+ high end STR people here than you can shake a stick at. They are successful because they take calculated, measured risks.

You made sweeping generalizations about BP members. "BP is not the place to find anyone who can afford these..." among others. Plenty of BP members could afford 2-3m dollar rentals if they were so inclined.

I don't need to read your post slowly to see the condescending attitude towards BP members.

@Account Closed, sorry for the thread crap. 

Lol -- you're right!  He found at least 3 in this thread almost immediately!

Jim -- the other commenters that do own luxury vacation rentals are correct.  You will need to perform a higher level of service than your bread and butter 3/3 pool home with Kirkland sheets.  

But the good news is that you already are your own ideal client.  If you were planning to live where people strongly desire to vacation, you already know their tastes.  Obviously there will be learning, but for the most part, just ask yourself what you would want a host to provide you and you probably won't go wrong.  

Also, In my opinion:  The luxury guests will still be visiting the lake throughout the next year or two.  I don't think there will be any real downturn in the luxury side of STRs.  The mid to low level short term rentals may see some occupancy/rate drop, but in my experience, people that can afford a 25k hotel bill aren't worried about the cost of eggs.  I think you got yourself a great value-add investment!

I have a client that's going through it in St Pete right now.  I think he's GCing it himself but he definitely needed plans drawn up by someone.  

I know Dan Lee of KW takes all kinds of jobs with his construction group.  They might be able to do it.

St Pete definitely wants more housing so the approval process isn't too bad as long as you follow codes.  I'll attach the new adopted ordinance below:

Link to St Pete Ordinance on ADUs

For that price range a condo might work due to the lower acquisition cost, but @Jeremy Kloter is right that the fees will eat you up! I also find another problem you will run into in condos. In any building that allows short term rentals, you will have a majority of the owners doing STR. They will all have essentially the same product as you, BUT they will have purchased at a much lower price point. That means their overhead is way lower, so they have no pressure to increase rate to what you will need to get to cash flow. The fact that there's a ton of competition and similar products in the same location actually puts downward pressure on rates! There are exceptions but I see this a lot.

For your questions:
Pinellas is the most densely populated county in the state, so there are good ROI spots but you'll just want to look at each property on a case by case basis. Doing by zip code won't work unless you're looking at beach zips! As a rule of thumb, the closer to the beaches, the better. I'll let others in Tampa tell you about those areas. In that price point, you'll do well to look in Seminole Heights.

Value add will always be your best bet for better ROI, but out of town buyers usually will want as close to turnkey as possible.

A pool will add 30%+ to your ADR.  In a vacation rental in Florida, people want a pool.  That may not be doable at that price point, but keep it in mind.

Hillsborough and Tampa say they have a 7 day minimum; I've never heard of anyone enforcing it. Pinellas has a lot of different cities with different regulations. Clearwater definitely enforce their regulations, even if there's been plenty of people flying under the radar. St Pete allows owner -occupied STR, and 3 turns under 30 days otherwise. Then they limit to 30 day stays. There's plenty of people flouting the rules, but I don't recommend it -- at any time they could address their housing shortage by cracking down on STR heavily.

Quote from @Robin Simon:

 interesting and thanks for sharing this experience - begs the question though, is Vacasa really the best solution, or is the problem less Evolve specifically and maybe just the model of the super large nationwide management platform?  Sounds like that may be more the issue rather than a specific national co

It's definitely the national model that's the issue.  To be blunt, their business model makes it unavoidable that you'll be dealing with employees that have less than zero stake in your STR business. 

They are not incentivized to get you good ratings or bookings or to maximize your profits.  The owner liaison (or whatever they're called) will be incentivized to deal with issues as quickly as possible, not to make your guests happy.  Or to make the vacation rental owner happy.  They are clocking in at 9 and clocking out at 5.  Period.  The company gets your percentage, but the employees are getting the same salary no matter what.

A local short term rental PM will have more incentive to make sure that they remain a superhost.  That means they need your guests happy because it directly affects their profits.  They are getting paid a percentage of sales so they have an incentive to get good bookings and maximize rates.  They will want to keep overhead down, as well.  And they will want you to succeed so you buy more properties to give them and they want you to refer other local owners to them.

You would have to sue the city.  The annoying part is that they will be using tax dollars to fight you.  I am not a lawyer and you should talk to a few.  My guess is that you need to wait until they enforce their rules (as in you keep doing what you were and make them come to you), and then you sue for whatever cause the lawyer advises.

I know several municipalities near me that were successfully sued for varying instances like this.  One was small enough that the lawsuit spent all their budget and they had to drop it.  The town attorney now advises the council to just ignore the issue.

The good news is that there are many of you and you can pool your funds for the lawsuit!  It's much worse when it's just one person.

I don't know if the city has a leg to stand on, but you should talk to a few Real Estate lawyer -- and especially ones that litigate.