All Forum Posts by: Kenneth Garrett

@Chris Stonestreet

Congratulations!!! I spent my first year absorbing every book and listening to other investors until I figured my investment strategy. I ended doing many BRRRR projects and a few flips. Probably around 20 projects in 5 years. I'm glad you pulled the trigger.

Good Luck.

@Elizabeth Conklin

Of course you can ask them.  I always send them a thank you for staying at our place and ask for a review.  Many times if you review them first, they will in turn review there stay as well.  I probably receive about 75%-80% reviews on stays.

@Brent H.

If the guests has already checked in and they ask to stay on the last day to check out later and there is no booking that day then I’m ok with it.  Just had this happen.  Wanted to check out at noon versus 10:00.  It didn’t impact the cleaners or another booking.  I would not allow it if it’s going to cause me to miss out on potential income.  If they want to stay another day and the calendar accommodates that then of course I would say yes, but they would need pay for an additional night.  Just like a hotel, they get charged.

@Joe Stout

I can't speak for other people as it seems we all have our own philosophy. I went to my STR ordered things before closing and spent a couple of weeks there setting things up. Depends on your market how you furnish it. I'm in a vacation market and bought higher quality furniture. Look at your competition and see how they are furnished. It's really market driven.

@Taylor Johnson

You can use commercial lending. Some refer to it as DSCR. DTI is not part of the calculation. A few things regarding them; must cash flow, DSCR of at least 1.25 (most banks), good credit score, must own it in an entity such as a LLC. They are evaluating the profitability of the property versus you. I use small local lenders for this. The large banks will be difficult to work with. It's an option for you.

@Bryan Kelly

The 1% rule is only a rule of thumb.  It means nothing in my book.  If the property cash flows based on my criteria that is all the matters.  In this market you’ll probably have a difficult time hitting that 1%.   If a property cash flows $700 per month, but only hits at .60 instead of 1.0.  I would do that deal all day.  I like to look at cash on cash return.  If I can get between 20% or better, I think that’s a winner.

@Pat Jackson

The distinction is when it was an apartment you were grandfathered in. When you change the use those safeguards go away. Per the building code, an apartment is considered an R-2 Use, while a hotel (STR) is classified as a R-1. @Michael Baum had it correct.  The distinction between the two is familiarity with your surroundings.  A hotel (STR) people are visiting for a few days while R-2 (Apartment) where the stay is over 30 days at a time.  In theory, every bedroom should have an escape window  (100 year old building probably doesn’t meet the size requirements, hence your grandfathered in).  Remember grandfathered in is a common term used to clarify an existing building was compliant when it was built, but the rules changed (new code) making it now non-compliant or non-conforming).  You could review the existing building code which provides certain exceptions for existing buildings.

@Account Closed

A few stats that were left out. How much are property taxes and insurance. At a 30 year mortgage of $260K the P&I payment would be $1560 plus $225 HOA = $1785. Are rentals allowed in the condo by the HOA? If property taxes are $100/month and insurance the same then you are at $1985. Leave 10% of rent for maintenance and repairs $240 then your at $2198. It's about a 4% cash on cash return. Not the greatest. I would pass. The return is very small. I've made some assumptions here, but if can plug in the actual numbers maybe COC improves. I'm not a fan of condos since the rules can change and major repairs that are needed for building could kill your cash flow. The buildings fairly new so that's a plus.

@Trent Reeve
I am two blocks from the beach in the panhandle. I have a 3/2 SFH. It does great. On the beach would be best, but those are way out of my price range.

@Alex K.

You don't need a management company. They will eat into your profit. I self manage 1000 miles away. You need a good cleaning company and a handyman. I use Schlage encode to issue door lock codes and have a ring camera. Takes very little time at all to manage a STR. Let the VRBO and Airbnb platforms do the rest. You can manage it from your phone.