All Forum Posts by: Dan Maciejewski

Yes, its definitely still a tough market. What are you doing for your EMD (I realize you don't have much cash...)? Do you also have a home sale contingency?

$5k EMD, $2k appraisal gap, $15k over asking, $2k escalator clause up to $35k over asking, appraisal and inspection contingency. I could non-owner-occupy as my goal is to STR after 1 year of occupying. I just don't know the LTV of hard money lenders, etc.

@Steven Foster Wilson I am currently networking with real estate agents for pocket listings, off markets. Will be attending the next REIA meeting as well.

$5k EMD, $2k appraisal gap, $15k over asking, $2k escalator clause up to $35k over asking, appraisal and inspection contingency.

Not sure where you are or if your market has completely shifted already but in my market:

5k EMD is only 1% -- that's not going to win any competitions. I coach my buyers to start at 2% up front and another 1% after inspections. That can be the deciding factor.

If you're writing an appraisal gap coverage, it should cover the amount over asking that you are offering. We're not completely waiving appraisals here anymore, but as long as a house is priced reasonably, then an offer should cover the over ask amount, otherwise you're telling the seller that you're going to renegotiate after the appraisal anyway. Also -- you can't really waive appraisal on a VA loan. The VA addendum specifically states that it is dependent on an appraisal.

Market-dependent, but most sellers and brokers in my market don't like escalation clauses. Plus yours has the same issues as stated above -- you need the cash to cover the gap between asking and offer price.

Appraisal contingency means that a cash offer without appraisal worries will always look better, especially since you're not at a down payment that could eliminate worry (i.e. 20+%)

Inspections are normal -- you're not losing anything there except in the few cases where a cash buyer waives all inspections and makes the EMD immediately non-refundable.

So, you're going to want to look at the houses that have been on the market for longer than the median DOM. The ones that the sellers are worrying that they have no offers and especially no cash offers! They will look at VA a lot more seriously after a few weeks! The good news is that there are a lot more of those than a few months ago -- no matter what market you're in.

1 Vote

Quote from @R Jun:

Last year I bought a gorgeous 20 acres country property in a famous small town in the middle of a forest with a 2008 built house in like-new condition. I put the property in a LLC with the intention of using it as a winter home (warmer weather there in the winter) and renting it out AirBNB/VRBO for 5-6 months when I'm not there at my summer main home. However, the real estate market has been so hot since I bought it and it has now gained about $110k (or more) in equity in just a year. So I put it up for sale fully furnished (Spent about $10k on furnishings) just to see what happens and I got multiple offers within a week. I'm conflicted, my heart says keep it and my mind says sell it and make $110k+ profit after just a year because I feel we are at the pinnacle of the market and I sense that the equity will remain pretty stagnant for some years to come judging by past local real estate values through the years prior to the pandemic hot market and now the higher interest rates. I never did short term rent it out yet but I fear it could be more hassle than it is worth, especially since my main home is 12 hours away up North. I would have to hire a property manager which would cut into my profits. There are a few other short term rental homes in the area that seem to do well but don't look nearly as attractive or private as my property.

Question: Would you sell the property now or keep it and AirBNB/Vrbo short term rent it out half the year? Is short term renting worth it when living far away from the rental? As we speak I have offers I have not accepted yet and can back out and take the house off the market. I put it up for sale by flat fee MLS without a seller agent, (2.5% will go to the buyer's agent). Capitol gains tax will be 15%. I'll take home about $60k to $70k after paying commission and taxes which will be about a 25% profit gain. I'm conflicted, any insight would be appreciated. Thanks.

Honestly, you should be able to male that profit in a year or so of renting as an STR. That should pay back your initial investment, allowing you to deploy your capital again without paying the capital gains taxes. Or, you can re-fi/HELOC and pull some cash out and still cash flow. If you don't have a property/asset in mind, you should stay the course.

I don't know your market, but I know my market may stop or slow the inflation-caused appreciation of the past few years, but we should not go backwards in price. A "stagnating" sales market doesn't necessarily affect rent rates.

My vote, without knowing much more about you, is to keep it. Make money, realize all the benefits of being a Real Estate Investor, and decide at a later date what your plan is. At the very least, you will get paid to have a vacation property.

0 Votes

Quote from @Miguel A. Garcia V.:

Let me start by giving thanks to all the good people that dedicated themself to providing all the information that's helped me do a complete 180° on my original plan of buying a single-family home. A little background I've currently been completely priced out from my current city Miami for this type of property (well, at least a good move-in ready opportunity with a little bit of cash flow at the end of the month), but the good thing is that I work from home, which gives me the opportunity to have a massive footprint for my ongoing search mostly looking at:

Davenport - Clearwater - St. Petersburg - Sebring

So, the original plan was to max out my pre-approved amount of $420K with a 10% down conventional. Based on all the information, that amount can significantly increase if I find a good deal for a triplex or a quadplex. Now, this new path has led me to ask so many questions:

Is there a way to find a dependable list of multifamily properties?

Am I able to convert a unit into an Airbnb?

How much can I actually afford?

Can I add ADU's if the lot is big enough?

This baby chick needs help to spread its wings

Is there a way to find a dependable list of multifamily properties?

Mainly, small multifamilies get listed on the MLS. You can check the commercial sites like Crexi and LoopNet, but most commercial brokers don't deal with small multifamilies too much.

Am I able to convert a unit into an Airbnb?

As long as the zoning allows for it. There's nothing inherent about multifamily as an asset class that doesn't allow for any length stay.

How much can I actually afford?

That's a question for your lender. Above you said you could afford more with more units. AFAIK, you'll need 15% down for a 2-unit, and 20% down for a 3/4 unit or more. Most lenders will allow 75% of the market rents to count towards DTI. You should be able to get a owner-occupied loan if you are living in a small multi

Can I add ADU's if the lot is big enough?

Again, as long as the zoning allows it. Practically, the building will most likely take up the buildable space, or max out the units per acre for the zoning. It's rare to find a multifamily that is zoned for additional units AND has the space to put them.

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I'm with everyone here. Provide smart TVs with the apps on them. Even a Firestick or Roku would work for older TVs. And in the checkout instructions, tell them to logout of their accounts. Maybe also have the cleaners logout on their checklist, as well.

I just stayed in an STR in my local area. The local cable is trash! I haven't watched "tv" in ages and it's worse than I remembered. The TVs should have at least allowed me to screencast to them but they didn't even allow that. I definitely survived, but it was something that "could" have some guests knock a star off on a rating. Most kids have tablets they watch YouTube and Twitch on, but adults still want to watch a movie or something!

1 Vote

Quote from @John Vitta:

How are investors doing Short Term Rentals in St Petersburg if you can only do STRs 3 times per year? I see STRs all year long, are they just taking a chance?

If you're talking about St Pete proper, most are doing it "under the radar." The city hasn't been enforcing it like Clearwater. But if I was a betting man, I'd wager that they will realize they can ease the housing shortage a bit by cracking down on all those illicit STRs -- eventually! Every housing unit counts.

As to a comment above -- Gulfport only allows short term rentals in a very small area. And unless you have a very tight budget, I would stay out of Lealman and Kenneth City -- they have a lower ROI than other areas. There are profitable areas that have St Pete mailing addresses that are actually unincorporated. Many of those do very well.

Vacation rentals in Pinellas as a whole are still looking like great investments. Especially compared to most commercial and multifamily markets here (and nationwide). Plus you get a vacation home in sunny Florida if you choose!

West Central Pinellas is where most of the above average to luxury STRs are right now.

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Comment here to find out the highest performing STR / Vacation Rentals in Pinellas. Where are they, what do they need to have, do you need a Manager? Are condos the way to go or is a SFR better? DanMac has been the resource for many successful investors in Pinellas. Comment below to get your questions answered.

0 Votes

Saint Petersburg, Florida

Hmm. I don't know your market but the whole country seems to be in a housing shortage right now. The first thing that always comes to mind is that the price (rent) is too high. You're the 2nd highest price in the immediate area on Zillow.

You could have someone (or a few someones) you know request a showing through the various sites it's posted on to see what happens. Have them do that and don't let your PM know -- that way you'll see the process and what happens.

When I have vacancies, I just set all showings for an open house. That way when half don't show, I don't want to yell at them, and it creates a little sense of urgency for those that do show. I let them take paper applications with them and see if they actually follow up. I do not charge for the application -- they will only pay for the background screening if they make it through our initial screen.

Zillow screen grab below. The one listed at 4,800 went up on 6/26. It's a touch bigger and looks slightly nicer from the few pics I looked at for both listings.

2 Votes

Baltimore, Maryland

Quote from @Jon Martin:

Quote from @Bruce Woodruff:

Quote from @Rodney Sums:

It might backfire, Rodney.....I, for one, would choose a Mom and Pop over a corporate entity all day long. I do not like giving my $$ to corporate entities. I would rather support a small business.....

Agreed . . . . It is also antithetical to why people choose STRs in the first place. It would be like going out of your way to visit a restaurant in a unique location, only to have it serve food from Applebees.

Lol -- my Aunt goes to Walmart everywhere she goes. And then buys a T-shirt with the city's name on it! My BIL seeks out Chili's and Bonefish in every town!! Then there's me that loves finding the local restaurants and shops.

2 Votes

Atlanta, Georgia

In Florida in my area (Tampa - St Pete) a pool seems to add about 30% to STR numbers. If you're in a higher end LTR, it may add 10%. It's been awhile since I've checked but housing is tight so it may add a bit more.

If the rent numbers are truly identical, then the pool just adds maintenance costs. Then it comes to personal preference. I know people that love owning pools and others that are very against pools.

I suspect a pool would add rent revenue and possibly up your occupancy but you know your market and market segment better than me!

1 Vote

Fort Lauderdale, Florida

Quote from @Matt Splittgerber:

Its in Gatlinburg. I've spoken to the someone from the planning board to confirm what the realtor is telling me that only one dwelling unit is allowed on a site. Maybe I'll have to inquire about renting the smaller unit out as a long term rental. Not sure if that's allowed.

But good to know there is a market for the MIL Suite included. I can't imagine traveling and having someone in my family in a totally separate suite. Kind of the fun of having a big house. But i suppose if theres a family with a small child they may enjoy the separate space.

Kind of think of it as separate cabins on a cruise or separate hotel rooms. Same location and you can still have breakfast together, you just sleep a little farther away! Sometimes there isn't enough room to fit everyone and not everyone can upgrade to a suite that is big enough!

1 Vote

All Forum Posts by: Dan Maciejewski

Dan Maciejewski has started 2 posts and replied 879 times.

Post: VA with no money down getting beat by all cash offers

Post: SELL VACATION HOME NOW OR AirBNB/VRBO IT?

Post: My fist deal! looking for my fist Multi-Family.

Post: Providing Streaming Services in STR

Post: Short Term Rentals in St Petersburg, Fl

Post: Buying a Short Term Rental? 3 ways to maximize ROI 👇

Post: Need advice: Taking too long to find renters

Post: STRs: The upside to a pending recession....

Post: House hacking With or without a pool

Post: Illegal Accessory Dwelling Unit