All Forum Posts by: Marcello Di Gerlando

@Ben Morand

The BP forums have been good to me for the past 11 years. However, of all the BP forums I have spent time on, the short term rental forum consistently has folks on it that are not shy of using toxic internet speak to insult and discourage others.

One would expect a more refined, graduate level industry knowledge from purported professionals and experts.  I hope this changes as this type of toxicity will doom this wonderful community we've been building. BP is not twitter, parlor, Facebook or 4chan.

First, based on your comments the first thing that comes to mind is your real estate license. I think you will find that in many states pursuing arbitrage may put your license at risk.

Second, make no mistake arbitrage is a JOB it is NOT real estate investing! 

Are you looking to start your own business? because that's what you are suggesting.

In order to be successful doing arbitrage the stars really have to align.  local ordinance and laws, on-ground services, software management, staffing, accounting, insurance to name a few.  And of course Deal flow - you need a bunch of properties. What about Interruptions? I'm sure you have considered seasonality, damage, maintenance etc.

If you can squeeze a few hundred bucks a month out of each deal you are probably doing well. Be prepared to work for it.

Those who tell you STRs are not work are lying to you. Scaling STRs like you would for arbitrage is full time of work.

I have an STR that does very well. However I'm just about ready to move on to my next venture. My options include bringing in someone under an arbitrage arrangement.

I'm in touch with a fellow US Army officer who has the arbitrage game firmly in hand and has about a dozen STR properties both his own and arbitrage rentals he lists on Airbnb. His success and workload has forced him to consider resigning his commission to pursue STRs full time.

He is under no illusion about what arbitrage is and how it works and the real risks associated with it. The cash flow he generates is rather impressive but expenses are also impressive. His success is a product of his understanding of the law, excellent management and exceptional operational talent. He has a team to help and a lot of motivation. Most folks don't have the traits he has. I surely do not.

Arbitrage is an option, its just not Real estate investing.

I wish you success

BLUF: Expressed as a percentage of revenue; what are your cleaning costs? please chime in if you can help with any other STR industry averages for expenses.

For the trailing 12months my cleaning expenses account for approximately 15% of my revenue which is the largest expense I have. I would love to know if my cleaning expense is within industry norms.

Thanks BP Family

1) read through the BP forums before you ask basic questions 

2) read REI books....lots of them

No reason this has to be emotional at all. What's your BATNA? - Best Alternative to a Negotiated Agreement. simply speaking, what is your best-and-final offer before you walk away and start looking for other deals. I agree with @anthnoy angotti  on this, In most cases its not only the sale price that's is important to the seller. lots of other factors can be addressed in your offer that may tip the balance in your favor. Good luck.

Marriot Homes and Villas seems to think so. They have acquired 4000 single family properties to operate as STRs in the past year alone, many in ski areas, and all high end. Do they know something I don't ? 

I have an STR in a ski area in Colorado and we are up 155% from last December. Demand is insatiable, it may be a COVID bump, but I tend to think not. We raised our price projections 3 times this year throughout the year as demand increased.

Our new years eve guests cancelled recently, they had our place booked for 5 nights at $900 night. After the cancellation, we raised our price for that week and had it booked within 36hrs for $1400 per night.  In ski towns across America, housing prices are at an all time high demand is at all time high and supply all time low. Is now the time to buy? At the right price I certainly would.

Looks like Marriott is taking up some space with its own luxury STRs. If they continue to do well as this article suggests I suspect other hotel chains will follow suit. 

What do you think the impact will be to independent STR operators?

https://skift.com/2020/12/03/s...

Take a look at Evolve vaction rental online. They are nation wide and handle a portion of the 'management'. They do not manage on ground services but have a network of affiliates that may be able to help. For 10% they fit the bill for some folks with what they can do for a home owner.  However, add cleaning and maintenance and other services and you will tagging on an additional 25% at least. 

Whats your question Jesse?

We went through this in 2017. In Placer Valley, Alma, Colorado. Its not only the highest town in the USA it is also regonized as one of the only sub-artic micro climates in the lower 48 states. Double digit sub zero is the norm in winter months. We used electric space heaters and we had no issues. They worked well. I recommend staying away from the super cheap ones. Maybe get a variety. Modern electric space heaters have safety switches on them and will shut off if they tip over. Keep them away from combustibles and concentrate on where you have pipes,  bathroom, kitchen utility room etc. Electric heaters will FAIL so don't count on just one. Check them regularly. We were shooting for 50-55 degrees as a general rule.

NO SOUP FOR YOU!!!!