All Forum Posts by: Alex Olson

Great work! Congrats on correctly using a 1031 Exchange!

Adam Schwery with Country Financial or Justin Miller. 

Great work with your 1031 exchange!! That's how you lever up!

This is exactly how you use a 1031 Exchange to upgrade your wealth. Congratulations!!

I am curious as well!

 STRs are labor intensive. If you have a PM manage your STRs they typically take between 20-30% of the revenue. So yes if you manage yourself they can make a bit more but you are also laying for utilities, furnishings and any time a sofa is broken or a TV is stolen you have to replace it and is a sunk cost. 

Where as if you take that some money and buy a owner occupied four plex and either cash out refi after a year or two or sell after a year or two you can double the number of units you own. Then, you own 8 units and tenants are paying down debt and you can concentrate on acquiring deals rather than managing as you scale. Managing an STR and scaling is more difficult, risky, and the reward is not worth the risk.

I had 5 str houses - regulation, the travel economy, broken furniture and demand for quick service didn't allow me to think about scaling...only managing and getting by. 

I think they can work on a small scale to make a few extra bucks but they won't make you wealthy in the long run based on my experience, who I have spoken with etc... Unless you love the service industry and serving others, it is not enjoyable. Hope that helps. 

 It would really depend on size, location and quality of the house/building. And, how hard you work at it. Long term rentals allow you to scale faster.

BJ Craig Craig Associates Casey Crawford Chinnery Evans and Nail

@Daniel D. I would have @Dave Foster chime in here but I think you may be ok if you sell it and 1031 exchange into another house. You cannot however exchange in to your new owner occupied house through a 1031 exchange (correct me if I am wrong Dave?) Hope this helps. 

@Cody Petersen Let me know how this goes. I won't be able to make it tonight.