All Forum Posts by: Michael Glunk

@Bruce Woodruff I've seen a slightly slower bookings for March on some of my STRs compared to the past few years which was a bit of a surprise as my properties are in a ski town and usually the March spring break time is strong for me. Not this year...but I've been booking at higher rates during other months. (e.g. January and February were both solid months). 

I've got STRs in Colorado and Montana. In Colorado I had a high occupancy rate in January and February and lower than normal March as mentioned above. But overall my gross revenues were higher than usual. I tend to look at things over the year/season versus looking at it this granularly, but your question caused me to take a look. My Colorado STRs tend to be higher price point per night vs. Montana where I set up an STR recently that is more of an entry point STR. This property has been booking up pretty solid minus the spring time which tends to be a bit of a mud season and therefore pretty low from a tourism perspective.

We will see!

Agree with @Avery Carl as well. Real estate is local/regional. And to build on this a bit further, how are you defining saturation and in come cases, does saturation matter?

What do I mean by this? 

I'd hypothesize that to most, "saturation" means there are too many STRs in a particular location. And while there may be a lot, there might be niches within the STRs in a given area that are underserved. Creating hidden opportunities for those that seek them out. Example: I have property in a ski town that many consider "saturated" based on the number of STRs, but it is saturated with 2-4 bedroom properties. I differentiated myself with a larger STR option, a 6 bed ski property (among other design aspects of the home) and have little competition.

I've used Evolve. They aren't worth it. As mentioned by some other folks on this topic, it isn't completely hands off with using one of these two companies. And in my opinion, the services they primarily offer (marketing the property and some guest messaging) is the easiest part of an STR. They also didn't prioritize getting me reviews. I was just a number. I manage myself now and what Evolve and Redawning offer can easily be created on your own with a good PMS (property management software) and pricing tool (I think AirBnBs isn't great).

I'd say do it yourself or if you want to be completely hands off hire a full service company like a Vacasa or a local company. They will take a chunk of your profits, but they you don't have to think about anything. It really comes down to preference.

@Brandon Gamblin Not sure if you mean which is better for the most cashflow or which type of cashflow do I like better? So I will answer both.

#1: From a max cashflow perspective my STRs do the best. My best producer is a SFH STR. It's in a resort area and I always look for ways to differentiate my properties. So besides the design and location, I made it a 6 bed and 4.5 bath that sleeps 15. In my market, there aren't many properties that size. Most are 2-4 beds. So it does really well. From a LTR perspective, for cashflow, I like small multifamily properties.

#2: What kind of cashflow do I like better? Sounds like a strange question right? I'll take any cash flow! But certain types of properties work better for different types of lifestyles in my opinion. It depends what your goals are. I personally don't think STRs are that much effort once you get your systems in place, but they do take some of your attention. Whereas my LTRs (all but one) are managed by a property manager and about as close to zero effort as you can get. So I'll be looking to buy/build more STRs to increase my cash flow at a faster pace. While using those proceeds to build my LTR portfolio in markets where I have a higher likelihood of appreciation. As LTRs with good property management are about as little effort on my side as something can be. I answer questions for my PMs now and then, but my PMs know what I want done. And I keep my properties in good shape (and get them into good shape when I buy them) to ideally prevent issues before they happen. And they like this as well because it creates less work for my PMs so it's a win win.

Hi @Peter Garcia if you are looking to have control over your own destiny and be rewarded for the effort you put in, the USA is a great place. Especially in the Real Estate space. I can say that not only because I am a real estate investor and agent, but because I am both a German and USA citizen. 

You are already taking the first step to accelerating your RE journey by "lurking" as you mentioned on BP and of course by your post here. To break your question/post apart a bit....

#1: Credit Score: I am not an expert. I am not an accountant. But in America it is beneficial to have a strong credit score. I have a friend (and real estate client) who is from Austria and dealt with this exact same thing. So yes you will definitely want to build your credit. My personal suggestions would be to get an American credit card as quickly as possible. Sometimes you can't get one right away. So form a relationship with a bank. Usually a small local bank is the best option, but talk to a few and see who is willing to work with your situation best. If they won't give you a credit card right away, often you can start with a debit card. But assets in their bank. And start to build that relationship. Don't be afraid of telling them your goals when you are interviewing banks to put your money in. Ask them what steps need to happen in order to get that credit card. Then once you have a credit card. USE IT! USE IT FOR EVERYTHING YOU CAN. Pay it off every month. And gradually over time your credit limit will increase and your credit score will also increase.

Oh, and another option I just remembered while typing this is to look into a multinational bank. If you are with a bank now in Europe (or could get with one before you come to the USA) that offers services here as well, often times because you already have a relationship, they can be more flexible with you in the USA in the options and services they offer. Credit Cards, loans, etc. But again don't be afraid to have the conversation and ask up front.

Oh and maybe this isn't an issue for you, but if it is you will need to get over the European mindset on money. My Austrian friends would only pay cash for things. Not helpful towards their goal toward building credit. It took them a little while to get over this. Credit cards can have a bad reputation in Europe. As least I know the do in Germany and Austria. In the USA putting money on Credit Cards is a good thing when it comes to building credit. Just treat it as a replacement for carrying cash, never spend more than you can afford, and pay it off every month. (At least that's my opinion.)

#2: Journey Acceleration: This is dependent on your situation. If you don't have cash reserves to start now then you will be dependent on mortgages and this is dependent on credit score. If you do have strong cash savings then it's easier to get started.

Another option is your time. You could hustle your way into deals. What value can you offer another investor to "buy yourself" into a deal or deals. Many conversations could be had on this, but hopefully this gets you thinking.

#3: Location: Sounds like you want to live in the same state as you invest. If this is the case, then you need to decide what your goals are and then choose a state where the real estate situation is advantageous to meet these goals. e.g. if your focus is cash flow move to a high cash flow market like the midwest (one example), etc. Click HERE to read my recent post response on why it's important to narrow down and identify your real estate investing goal.

But you don't have to live in the same state as you invest. Many people invest out of state. Myself included. But this is a personal decision. Click HERE if you want to read my recent post on the places I invest out of state and why.

Happy to dig into any of these points a bit deeper. And if you end up in Colorado or want to invest here, let me know. I also have good connections in a few other states so let me know where you end up landing or end up wanting to invest.

@Brandon Gamblin Great question! I've been investing out of state for years. I invest out of state for a few different reason, but my two primary reasons are as follows:

MI - I invest here because I can get better cash flow than where I live. My initial investment goal was to gain as much cash flow as possible so that I could become financially free from my W2 job. I have since achieved this and now just focus on real estate. Why Michigan over other mid west areas? I have a friend in there and that's what I needed to get started there. Now that I am started and have a solid team, why leave? I'm still able to find deals, so I'm still investing in MI. But if/when that ever changes, that would cause me to look in other areas.

MT - I live in CO, but love MT because it is less crowded then CO. I see myself moving there in the future once my kids are through school. So that was the main initial driver. But the market has also proven to be decent for cash flow. Not as good as MI. But I get better appreciation than MI. So it's a good balance.

CO - I live in CO and I'm an agent that works with investors in CO. So because I am here, it makes it easier to invest here. It also makes it easier to take on more time intensive projects. For example about 2 years ago I finish a project where I build two homes in a ski town in Colorado. I was able to be there on site which helped in this process. And I ended up with two free ski homes out of it! One I LTR to provide housing for the mountain community. And the other I STR and do very well. Given I have $0 into the properties, the cash flow, as you can guess, is better than any other project I've done. Because of the market conditions, I was able to achieve this by pulling all of my money out of the project when I converted from a construction loan to a traditional 30 year fixed. I probably wouldn't have taken on this project at a distance. But I did because it's only an hour from my house and I could be there if needed. Now that I have done it, well I would do it from a distance. But I needed to have the experience of first attempting a project like this closer to home to build that confidence. (Come to think of it, I should probably write an article for BP on this as it was a pretty interesting project that could be duplicated.)

@Joseph Z. First of all, congratulations on starting your real estate investment journey! 

I agree with @Luka Milicevic and @Jim Pellerin and others...You need to first determine what you want. i.e. What is your goal? And it can't be as broad as to make money. It needs to be specific. I've been a real estate investor for over 17 years and my goal(s) have definitely changed over time. But I always have a goal that I am shooting for. 

I am also a real estate agent in Colorado and I see this a lot with my investor clients. They say they want an investment property but they don't know what they want. They just know they like the idea of it, but don't know what else to do or where to start. So this aspect is where I add value in helping them uncover their goal(s). But without a goal, it's hard for anyone to answer your question and provide solid value. 

The cliff notes approach to this is to start by asking yourself, what am I looking to achieve? And then to continue asking yourself questions until you get down to something very specific. e.g. Keep asking yourself "What would I need to do/make true to achieve that result?". Let's say the answer to that initial question is monthly cash flow. So how much cash flow do you need to make per property or per door to feel it's a good investment for your situation? Is that desired cashflow specific to a particular property value or value range? Or are you also looking for a certain cash on cash return? If so what type of cash on cash return? Because of course you could pay cash for a property and of course it will/should cashflow if you pay cash, but is that the best use of your money? That's your call, but many like to use leverage so they can accumulate more. So what's the balance of cash on cash to cashflow that you are looking to achieve? Is there a price range you feel most comfortable in? You mentioned you are not very risk tolerant. So maybe you want a property that isn't that expense because to you it feels less risking. 

So you see one example, many questions (of which the above isn't all of them and is just one individual scenario that could branch in many different ways), but I hope you get the point. 

But when you know the answer to that question, you then have a focus. You then have something to go and hunt for. And you have something for others to hunt for. e.g. If you tell a realtor, I'm looking in a max $500,000 price range. I only want a long term rental. I'm going to use a property manager. I want a minimum of at least 10% cash on cash. And or a minimum of 10% cash on cash but if the property is a cheaper property I want to at least cash flow $200+ per door. That's something tangible. That's something that someone can help you find. 

The answer could vary again based on different scenarios. The answer could be a single family home that you rent. It could be a small multifamily that you rent or that you live in one side and rent out the other(s). Or it could be a property that you house hack. (Of course if you have a preference here that helps narrow things even further.) But having a goal(s) at least gives a specific enough request to which someone can help find solutions. 

Make sense?

Hope that helps. Happy to chat more. Hey, you're on here so that's a start. Starting and taking action is step one. So congratulations on that!

@Nicholas Hausmann

I built 2 modular homes and completed them about 2 years ago. I STR on and LTR the other. They are in a ski area of Colorado. The cliff notes are that I built them for free. How? I finance them with a construction loan (so no you don't have to pay for them entirely up front) then when I refinanced them, I pulled all of my money out. I was able to do this based on the cost to build modular versus the high cost per sq ft in the area.

Modular companies can vary. Some have a really good product and others are lower grade. So you get what you pay for. I would research those that will deliver to your area of interest. Are you going to GC the project yourself? If so there are many things to consider. If not, then have a conversation with the GC you are going to use/might OR there are companies that do the install of the modular units that can help get you ball park numbers for site work and other aspects of the build.

@Joel Nelson

I agree with pretty much everything that was said here, especially many of the points that @Ryan Moyer called out. With this said, I believe there is opportunity anywhere if you can get creative enough. Whitefish is a bit restrictive as has been called out. I own a few properties in downtown Whitefish, but I long term rent these as I am not in areas that you can short term. 

I recently bought a property closer to Glacier NP that will cashflow as a long term rental, but I am going to take one of the units and test it as an STR. Worst case, I have a place to stay when I come up from Colorado. But I think it could do well as a mid-priced STR. Might even LTR/Mid Term rent it during the off seasons and STR during the prime time. We will see, it's an experiment that will cash flow either way so I have flexibility.

Mountain towns can be tough, but not impossible to get something to cashflow. Again, you just have to be creative. Example: I live in Colorado and built two ski houses for free (built them and then pulled all my money out when I refinanced from the construction loan to the perm 30 year loan). So they cash flow great! I LTR one to some locals as I want to help with the housing shortage and then I STR the heck out of the other. There are definitely shoulder seasons, but the prime seasons more than make up the difference.

With this said, if you need an agent in the Flathead area, I have a good one. Just hit me up. Or if you are ever interested in Colorado, I am also an agent here and can help you out and also put you on my investor email list.

Good Luck!

Michael