All Forum Posts by: Jon Martin

Well, if that’s true then I stand corrected. I was honest with the lender about my intentions so I guess this one is on them if that’s the case. 

I used a 2nd home loan. The lender doesn't care if you rent it out on the side because that's pretty standard for a lot of second homes. APR was close to a standard 30 year owner occupied and only required 10% down. You are only allowed to carry 1 on your credit report at any given time.

Anything between Ann Arbor and 275 is a no brainer. You can venture further east, but will need to more homework on the specific suburbs. 

Kalamazoo and Grand Rapids are safe bets too. 

 Same reason why people call tissues “Kleenex” or inline skates “rollerblades”. Good branding and right place/time. 

 Yes- I have heard of the availability heuristic and it’s certainly a thing . . . just like you notice how many people have the same new car or shirt as you right after you buy it. 

That said if you hang out in investor and RE circles, you are bound to hear about STRs more. Whereas those with day jobs outside of RE or hospitality it’s far less common. That’s why I liken it to what Bitcoin must’ve been like before it became common news, where if you were in tech everyone around you bought in already but the general public was still weary of it. It’s when I started hearing gym bros and Uber drivers talk about Bitcoin in late 2017 that it crashed shortly after. 

That’s why I think STRs are in a similar point in the cycle. I don’t see it crashing, although it will get more competitive. Properties in hot markets will keep pricing up to the point of no longer being profitable, which will lead to the market cooling off and later repeating the cycle as these things always do. 

 
Agreed. Clearly a tough business to scale, especially in the current labor and supply environment. Not to mention the physical space required for all stages of the build and distribution. 

That said, I think is that we will see an explosion of these types of startups in the coming years (arguably already) and continuous improvement in quality and efficiency. 

I agree that it seems that way, however there is probably something similar to a self selection or healthy user bias at play. This forum would be an example of that. However in my normal friend, family and colleague circle of a few hundred people that I interact with somewhat regularly, I can count on 1 hand the number of people who I know have a rental, who all have a tiny house/ADU setup on their primary residence. Maybe 2 hands including those I haven't had this conversation with.

As an Oregon trail millennial, most of the generations above me are stuck in the Dave Ramsey debt is bad/work your day job and save cash mentality, or they are millennials who are quite successful professionally but priced out of even owning a primary because they've been on the sidelines too long. So in terms of the general population, I really don't think there are that many STR investors.

I liken it to Bitcoin in 2017, when the success and get rich quick stories started to become mainstream knowledge, but there was still  big profits to be made for those who took action. And like bitcoin, soon enough we will probably have a run up where a bunch of people overleverage themselves and lose their arse, followed by a cooling off and another run up later. I only see demand increasing as people get fed up with hotels and realize how much more value they get from a good STR. 

Yeah but you gain it on the way back! 

As many others have said in lots of these threads, you should set up your STRs in a way where your own boots on the ground are not required. 8 hours driving is still 8 hours. 

 Search the general area where you want to buy. The more you can zoom into the exact neighborhood, the better. Open up the calendars of the comps and see how booked out they are. See what they charge, how nice are the furnishings/decor, etc.  

Missing anything? No, I think your summary of California is pretty extensive lol. When entire counties are making their own ordinances then you know it’s getting tough. 

Unincorporated areas of SLO county (where I live) are still legal but are super pricey right now (but maybe not relative to Thousand Oaks). 

Visalia and the foothills are nice by valley standards and still somewhat affordable, and has a major medical campus and the convention center in downtown. I think Santa Clarita is a good idea as well if you can get very close to the park. 

That said, if you are willing to drive 8 hours, then maybe consider a market you can fly to if nothing in California works for you? You even have flyable options from SB if you don’t want to deal with LAX . . Food for thought.