All Forum Posts by: Stone Jin

I'm disappointed that I was listed after @Jake Saliba. LOL.  I can try to make it but no promises at this point.

can someone provide a recommendation for Toledo OH?

Congrats Felipe!

For the best prices I generally act as GC for my properties.  What work are you looking to have done?  PM me the details and maybe I can recommend one of the contractors that I use.

Stone

Hi @Kyle Seidel

The 1 bedroom condo in my example had the following expenses:

Cable/Internet $150/month

Hoa $200/month

Electricity $125/month

Insurance/Taxes $80/month

We didn't have a mortgage, but you can add in your PI.  This is based on a 600 sqft condo, if you are buying a house maybe with a pool your expenses will differ.

If you plan on using it 2-4 weeks I assume it'll be during peak season since who would want to visit Phoenix in August.  I'd really run your numbers carefully.

The other thing to note is that the number of AIRBNB/VRBO is growing at 20% a year in terms of number of listings.  More supply may not be a good thing esp during the off season.

In the winter it varies, we rent with a minimum of 3 days but our regulars will stay for a month usually.  The key is to keep it filled to the max, the duration doesn't really matter.  There usually are discounts based on duration.  

Stone

Hi Kyle,

It depends on where your property is located.  200K houses in today's market you are not buying in prime VRBO neighborhoods.  

$3000 a month on average or just in peak season.  We've owned and operated 4 VRBO in Chandler AZ, our winter rates were $2800 for a 1 bedroom condo in a community very desirable by snowbirds.  However the same condo in the summer months was renting for $1300.  You should understand what the rents will be for your property.

Also, are you including the cost to furnish in the 200K?  Other owner/operators that I've talked to have spent 3-10K on furnishing depending on neighborhood and size of home.

Airbnb and VRBO are both very popular in the valley. If you are buying a condo, make sure you know the rules of the HOA otherwise it may limit your ability to rent it out.

Good luck,

Stone

Hi,  we recently faced the same issue.  We had  summer home up in Pinetop AZ, we just weren't using it enough so we decided to convert it to a rental.  We've owned and operated both VRBO and traditional rentals in the Phoenix so understood pro's and con's to it.  We ultimately decided that we were going to rent it out unfurnished.  

The reason we choose to rent unfurnished is comparing the profit from each approach vs the headaches from each approach. Property management on STR is about double the cost of unfurnished. There are also additional costs in utilities/furnishings/landscaping etc for STR. After all of that STR would probably still be more profitable but not by much. Plus our experience with STR in the valley, we knew that the clients were generally were more picky. We looked at our property as well, we have a newer stick built home but it was not a cabin style, there probably were $XX of work that needed to be done for VRBO standard of rental. So we just took a look holistically and for us it wasn't worth the hassle for the few hundred bucks more a month.

AZ passed a law that STR was allowed, if you are in an HOA then they may dictate some restrictions (min rental duration, need to pay some fee etc).

I know I kind of rambled, but hopefully the intent came through.

Stone

@Felipe Munoz I don't think it hurts to write offers, but you just have to fully understand the local market.   You have to figure out the next area that will start turning and start looking there.  If you are looking under 150K, then South Phoenix and Sunny Slope maybe?   

Doing verbal offers is easier than written, I had my agent do verbal offers and only write if we knew we had a real shot at the deal.  No point wasting time.  

Good luck.

@Felipe Munoz  we met at @Shiloh Lundahl's meet up.  Why don't you just invest with him to get your feet wet.  Be the money partner and learn the process.  You are getting an education while making your money work.  

If you can't put up the money to do their rehab which I think ranges from 25-50K all in, then you will need to figure out how to produce more income from other methods.  I believe you said you were an agent.  Right now it should be good to be an agent with the buying season right around the corner.  Start your marketing to get more clients and find a niche.  Take this year to build up your cash reserves and crush it next year.  

Good luck

@Casey Miles I used IPX1031.

I think your thoughts on consolidating properties to 1 part of the valley is smart.  I used to have properties all over but as we got more mature in our buying, we start buying only properties 25 min drive from my house.  This has improved my ability to effectively manage.  No more driving for 2 hours round trip to check something out.

We've done 6 1031 exchanges this year to trade properties we weren't interested in keeping into a different asset class. Selling condos in Chandler and exchanging into SFH in mesa. The returns as you know were questionable at best, but the way I looked at it was that I was exchanging cashflow. So if my 1 condo generated $500 a month in cashflow, then the property it exchanged into must also generate $500 cashflow. I did have to pick up a little more debt in the process but generally pretty happy with the process.

One thing someone mentioned above is getting a blanket loan on your properties and do a cash refi.  You can make a margin off of that on hardmoney loan or crowd funding.  There is some risk but you are then putting your "dead" equity to work.  We are in the process of implementing this strategy.  

I've struggle with the same issue you have are facing.  But right now, having strong equity position in cash flowing properties may be a good place to be.  I also recently heard on a podcast of a strategy of getting Helocs at the current high prices and using the heloc to purchase when the prices re-adjust.  If the adjustment never comes and you never use the money in the heloc, oh well no loss.

Good luck.