All Forum Posts by: Dave Stokley

Totally depends upon the arbitrage spread of the property. You can do research on potential STR income on sites like Airdna and come up with an offer that's a win for both parties.

Why do you want less seasonality?

I understand your perspective as an investor, and I appreciate you so perfectly demonstrating exactly why I'm shifting my business away from working with investors. Not everything can or will have a demonstrable and/or quantifiable ROI, especially in the hospitality business. What's the ROI on that extra blanket you dropped off? Will it result in more bookings? What about a hair dryer? Ironing board? Sometimes you just have to do things because you know it'll improve the experience.

Regarding the rug specifically, my reaction was from a visual perspective it looks bare and minimal. Like I’d expect a corporate Airbnb run by an investor to look. From a comfort perspective I’d much rather wake up and put my feet on a warm rug than a cold floor. And that’s something that may not even register consciously for people but could subconsciously add to the comfort factor.

Anyway, hope this didn’t come off too aggressively. Just one guy’s opinion! 

Quote from @Ryan Moyer:

Quote from @Dave Stokley:

Quote from @Ryan Moyer:

Quote from @Justin Fox:

Paying 3k/year for a vacation place in the Smokey Mountains is cheaper than a time share.  Less scammy too.

Some would say owning a desirable cabin in the mountains is the value.  Not only now, but more so later.
I'd do it if I was a bit wealthier.  I just don't have the income to bank-roll bad years.

 Of course you have to consider that in the OP's hypothetical deal you're locking up $250k+ in cash that you can't invest elsewhere.  At current rates even just sticking it in a completely liquid money market account would net $10k a year which would buy a pretty sweet vacation.

I don’t think you have to consider that - that’s what investing is. I’m guessing the people buying a $1m can also afford the $10k vacation anyway. Plus you own a home you can vacation at, and can reasonably expect some appreciation on the property itself. 

 All I'm saying is you can't directly compare $3k/yr on a vacation home to $3k/yr on a timeshare.  Because it's really $3k/yr + losing reasonable access to $250k cash on a vacation home vs. $3k/yr + full access to $250k to do whatever you want with.

I'm not saying the latter is better, I'm just saying it often gets left out of these comparisons.  It's a huge difference.

That’s fair, I didn’t look closely at the context of your comment.

An extensive network of cleaners, contractors, landscapers, etc 

Experience managing property

Quote from @Ryan Moyer:

Quote from @Justin Fox:

Paying 3k/year for a vacation place in the Smokey Mountains is cheaper than a time share.  Less scammy too.

Some would say owning a desirable cabin in the mountains is the value.  Not only now, but more so later.
I'd do it if I was a bit wealthier.  I just don't have the income to bank-roll bad years.

 Of course you have to consider that in the OP's hypothetical deal you're locking up $250k+ in cash that you can't invest elsewhere.  At current rates even just sticking it in a completely liquid money market account would net $10k a year which would buy a pretty sweet vacation.

I don’t think you have to consider that - that’s what investing is. I’m guessing the people buying a $1m can also afford the $10k vacation anyway. Plus you own a home you can vacation at, and can reasonably expect some appreciation on the property itself. 

Hi Molly, I live and invest in Cleveland and manage STRs here. Happy to answer questions or refer you to others that can help too.

Quote from @Alice Chen:

Quote from @Taylor Jones:

How does anyone buying in the Smoky Mountains make money buying today?

$1M purchase price and $125k in revenue

P/I/T payments run -$78k/yr (assuming 8% interest rate and 80% LTV)

Cleaning fees -$20k/yr

OpEx - $30k/yr

Total = $128k expenses

-$3k in cash flow.

Do people like losing money or am I missing something?

I guess people don't really buy when interest rate is 8% 😂 Those STR hosts making $$$ now I assume bought long time ago with much lower rate

8% interest rate

 Nah, you can make $ at an 8% rate if you know what you're doing.

Quote from @Taylor Jones:

Quote from @Luke Carl:

I agree with Dave I can't imagine 30k in OpEx where did that number come from?

How big is the house?

 If you assume a 4 bedroom cabin that's ~2,500 sq ft, that's what I went off of.

OpEx includes utilities, WiFi, property maintenance, household supplies, furniture replacement when worn out, fixing broken appliance, fixing amenities that break (hot tubs, game room, movie theater, etc), CapEx issues such as Roof, HVAC, Water heater, etc.

 I still think you're way high on a lot of this stuff. How many STRs have you operated and for how long?

Here's what I'd project for that stuff:

Utilities (wifi/TV, water/sewer, gas, electric): $5,000/yr max

Yardcare (Grass/snow): $2,500/yr

Routine maintenance/Repairs: $1,000/yr

Consumable Supplies: $2,000/yr

If you don't buy cheap **** the amenities shouldn't be breaking or wearing out very often. I'd lump that in with general CapEx and $5k seems like a generous budget.

So I'm at $15,500 with a large CapEx budget.