All Forum Posts by: Marcelle Abel

Why did you buy an STR 2500 miles away? I've got 23 and all of them are in a 7 minute driving radius of where I live. I know how to replace a lightbulb and a flapper in a toilet. That's being very modest.

None of my houses are in the blast zone.

Schedule to have stuff arrive one 1st day you are there. Just have to time it right.

I have also bought local furniture on phone and had them deliver to house on day I picked.

Quote from @Marcelle Abel:

Running into a wall here and would love your thoughts and insights as I try to scale as a new investor. We have a chunk of cash to work with which I had originally planned to buy three STR properties with (traditional mortgage, 20% down) BUT I found a larger property with a larger price tag that looks to cash flow very well if done right. So my question is...do I spend 2/3 of my cash on this one property or stick to my original plan and look for three properties with a more moderate cash flow? Thanks everyone!

Run the numbers and do a scenario analysis that includes all risks associated with both property investments.

Define "larger" property.  4 units? 30 units? 60+ units?  There are very important differences with each of these, namely property management.

Also, these type of properties are built in different types of neighborhoods,... and you do not want to be in a "rental neighborhood" which will become a property management hassle.

FYI: I've owned and managed properties all over the country for the past 20+ years. 

Aside from running the numbers there are at least two key considerations.  First is risk.  Three sources of income may be better than one.  If two are doing well they can support the third.  The next thing is if you close on three properties you will pay three times the portion of closing costs that are non-reoccurring.  In my market, the closing fees aside from financing are about $1,250 regardless of the selling price.

In my market, larger properties tend to bring in more dollars because while many guests are millennials, they come with lots of friends and relatives.  Many of our guests arrive for bachelor parties, birthdays, family reunions and other small events.

Our larger properties that sleep more 10+ get more business than the ones that sleep 4-6.  The income is greater per stay and there are more stays.

There is no doubt that all of our areas are different and you should buy what the market is demanding.  Run the numbers and consider risk and closing costs.

Quote from @Jon Q.:

Quote from @Michael Baum:

Hey @Jon Q., I don't disagree with you, but 3 properties most likely will be more work than one. No not always, but usually. I agree that all things being equal 1 shouldn't be more than 3 as long as you keep up with the systems maintenance. Start letting that go and 3 will always be more than one when you have to repair 3 furnaces or A/C units.

All things being equal, yes.  But all things are never equal.

And… MF are often in rental neighborhoods, SFR are not usually.

So, making this generalization does more harm than good… is not useful, but harmful.  Understanding why and what variables impact what to invest and not invest in is what matters.

 @Marcelle Abel considering the quality of comments being shared on this thread, my suggesting is to consider it only one source of info and not that any info posted is true.  Doing that will protect you because relying on comments of some people could cause you problems and cost you serious money.

If interested, I can provide you with a list of books written by experts that provide “facts”.

Comments on here are only as good as the experience of the person providing them, so “trust, but always verify” what you hear/read, even from me.

I’ve been doing this 20+ years, but I’d say I know nothing,… just developed ways to overcome the countless challenges that have come up in markets I’ve operated in throughout the U.S.

It really depends on what your goal is.  There will be less work with just one (one roof, one water heater, one tenant at a time, etc...). There is less financial risk with multiple properties.  If something goes wrong with one (leaky roof, broken water heater, tenant moves out), the other two can help pay for it. 

My personal preference would be to have multiple properties, but I really hate vacancy.  Good luck!

More properties require more work, but they also provide a better return. Your cash flow can be higher. Your equity grows faster. You can have more tax deductions. When one property is vacant you are only losing 33% of your income instead of 100%.