All Forum Posts by: Michael Bowie

@Simone Koga Great initial intuition. Automate before you delegate. I HIGHLY recommend Smartbnb. It's amazing. Automates guest communication, check-in/out, FAQ, coordinates cleanings, pre-approvals, sends market/pricing updates, shows where you rank in the listings, etc. All for a low monthly fee. 

@Paul Sandhu gave great tips. Just copied and pasted into my notebook and adding those to my to-do list for any new property. 

@Luke Carl definitely knows what he's doing managing units in the Smokies from Nashville.

Though, I have a slightly different perspective on management. I make plenty of money with someone else co-hosting. It's all about the deal.

@Scott Mackinnon Are you talking to a commercial loan officer? As you may know from your experience with the apartment building, commercial lenders start talking in terms of debt-service coverage ratio (DSCR) instead of DTI. In this case, the income on the property is used in order to qualify for a loan versus your personal income. I have found a couple commercial bankers who look at my DSCR instead of DTI, which by definition includes the STR income of the property. Just keep calling on bankers.

Taking a note from "Long Distance Real Estate Investing"... contact the best commercial agents you can find in the area and ask which bankers they recommend. They'll know the ones that can get deals done. From my experience, the smaller the bank, the better. Mileage will vary with that, though.

Facebook, social media, and bigger pockets. Just hustle and network. The main question here is "Who do you know that ... ? "

Guesty is high-way robbery, IMO. You can get virtually the same software they are using if you sign up for Smartbnb, and it's only a flat fee. Smartbnb is awesome.

This isn't a "deal calculator" per say, but this is my personal rule of thumb that I look for. 

I want to gross at least 20% of the purchase price, and I want to profit at least half of that. 

@Paul Sandhu any magic to be done in Borger?

@Luke Carl has a great point. It's much easier to operate in a tourist city. On the flip side, there is 10x the competition. I operate exclusively in a city, and it's profitable for me because there is a lot less competition. If you can operate within the rules that is... some cities obviously are much more of a "wolf" than others to put it in the words of @Paul Sandhu.

@Sonia Peak One is a multifamily and the other is a condo. One way to go about it is to find properties that are for sale and have sat on the market for a long time.... Engage with them about buying the property because you want to do STR... Since they're probably getting eager to sell it to you, they'll probably try to "sell" you and tell you how that's a great idea.. "my friend/sister/brother does STR and they do well, I think that would do well in this area..".. Then, go look at it, meet the owner, build a relationship, and leave to think about it... wait a few days or a week.. Follow up and say, "hey, I'm really interested in this house, but I'm concerned how well the location will do on the STR market. Would you be open to a lease/option? I'd like to lease for a year, then if it goes well, I'd be interested in purchasing the property in 12 months or less. Would this be something you would be interested in?"

That's basically how I got my two current lease deals.. I have the first right of refusal on both of them.. While I didn't end up purchasing the multifamily yet ( I'm into my second year on the lease), I actually purchased a house from the same owner right across the street for STR.

@Sonia Peak My experience with this has been quite different than the others, so hopefully this can provide some value. I actually have a lease option on a piece of property that I do exactly this. My landlord is fully aware. The situation works out nicely because he is too busy with other projects to do STR himself, and he had the property way overpriced so it had been on the market for over a year.

I also just signed a lease on another property where I'm doing exactly what you described... I'm testing out the building with a lease to make sure the location does well before I sink in a bunch of cash.

In both situations the landlords know exactly what I'm doing. The first one I mentioned is profitable, and the second should be profitable as well. So, it's definitely doable, and it's some of the lowest hanging fruit in the real estate world IMO. However, people are starting to become more comfortable with Airbnb and doing it themselves. I've found these deals becoming harder to find in my area.