All Forum Posts by: Michael Glunk

I'm looking for some creative, but ideally justifiable thinking on this topic. Thank in advance for any thoughts.

Here's the deal, I am evaluating a property that is in a commercial zone but can be used in a commercial or residential capacity. I think it would make a great STR. This area doesn't allow STRs unless it is permitted as a B&B. Any thoughts on how to structure it in order to run it as a traditional AirBnB type STR so it's more turn key and less labor intensive, but classified as a B&B?

@Jake Sklanka When you say cost comparable are you asking about Modular vs stick? Or something else? If it’s modular cost, I was at under $200 a sq ft.

Yes the boxabl seems pretty interesting. Especially if they either get higher end finishes or create an option unfinished that you can finish yourself.

@Tim Schroeder An interesting topic based on all the great feedback and discussion thus far. I did this same model (short term that my family and I could use) you are looking to do up in Grand County. It's always tough making the numbers work. I was able to make them work to my advantage by building. I built two homes. I long term rent the smaller of the two houses out for a few specific reasons, and then I short term rent the larger home out. (Note, this was a modular build.) I was able to build them and pull all of my money out so I own two cash flowing properties without any of my own money left in the deal. In fact, I pulled a little bit more money out than I originally put into the deals. I just finished these up and starting short term renting about a year ago. And while the "COVID" bump in value definitely makes the equity in these two properties even sweeter, they were still positioned strong upon completion from an equity and cashflow perspective.

Net, sometimes you need to look at the situation from a different perspective. Finding something already existing to buy that will cash flow in many of these mountain towns can be tough. Not impossible by any means, but tough. But there are other ways to approach it...traditional build, modular, glamping, etc. that can create a lucrative opportunity from both a financial and a family time perspective.

@Kayla Uderitz @Austin Elm is correct in everything he has said. (He's also a great agent resource if you are looking for one. Just to give him a quick plug.) To build on the comments thus far, and being a property owner in Whitefish now for 15+ years, STRs are doable. But I haven't found them to be extremely lucrative in Whitefish. I know of a few condo STRs that do decent, but that's about it. And I don't like Condos or HOAs personally. There are strict STR areas as Austin has mentioned. In the downtown area, generally speaking, this is the Railway district. Google Whitefish zoning map and you will see where you can and can't have an STR. The toughest thing is it's very seasonal in my opinion in the Flathead Valley as it relates to STRs, but would love to be proven wrong. I continue to explore STR options, but have looked outside of Whitefish Proper and more at other alternatives. Buying a place and building a garage apartment (where allowed by zoning) is another good option) pros and cons to this. Way easier to manage and more consistent cashflow. But the cashflow won't be huge. Happy to chat more or answer any specific questions.

@Krista Goodrich Great question! And one that I have both passion and experience in and have commented on in a few other posts. Lot's of great thoughts thus far. I'll build on what's been said with a few of my personal thoughts.

There are a lot of factors that come into play. Personally, I believe that you can make something work in any market if you know not only WHERE, but also HOW to look at it. Takes a bit of creative thinking and sometimes you have to flip things are their head. Look at it differently than others with a bit of a disruption mindset.

In my opinion, much like BRRRRing or Flipping, where you can't pay retail in order to make it work...the same is true with mountain/ski area properties. Every once in a while you find a diamond pop up, but these are rare. And when you can find something it either is a wash from a cashflow perspective or barely cashflows. Nothing wrong with this if you are an appreciation investor. But my personal strategy is for some form of cashflow. So when you analyze markets and properties, especially in the mountains of Colorado where I live and invest you will find, as you have described, that nothing seems to work. A bit different from the midwest markets that I also invest in where cash flow is a bit easier to come by. 

 What's next? Well you can definitely monitor a market or two waiting for something to inevitably pop up that probably barely brakes even. Or you can flip things on their head and look for ways to create equity/cashflow. Definitely takes more effort. So what does this leave you with? Like my BRRRRing/Flipping comment, it often leaves you with either looking at/for properties that no one else wants because they are trashed (and therefore you can often get them at a discount) or building. Both options leave you with needing to find and hire local contractors/trades unless you are planning on doing the work yourself. Personally, this is where I have found success. It's harder and more stressful, but most things that are worth it are. 

A potential third option is to send out mailers, typically to out of state owners. I have found property this way as well.

Other factors to think about are costs. How can you keep expenses down? This can be a big issue in mountain markets. Most of these markets have a deficiency in skilled labor. Or even labor in general. As a result, everything costs more. So one thing to think about is how you can strategize around this. e.g. If you want to build, maybe don't build something on site, build it off site (pre-fabrication) and bring it on site. It's a lot cheaper to build in Nebraska or Minnesota than a ski town. Contractors/Trades...is there a market close enough that you could find someone skilled and willing to make the drive to wherever you are rehabbing or building at a more affordable price?

I've personally leveraged these approaches and techniques and have found success. I'm sure there are other thoughts and approaches from others here on BP. I recently finished building two ski houses near Winter Park. I long term rented one (because the size is common and STR income is on par to slightly less than long term renting) and then I short term rent the larger one. I was able to pull out all of my money I put into it to finish the build. I actually pulled out more than I put into it. I have a bunch of equity still in both properties. And they both cashflow. So worked out well. But definitely was a lot of work. More so than a traditional purchase.

Given the crowds at resorts and the growth in desire for the backcountry, I've been working on an Off-Grid Backcountry Ski House property. Still working on access so it's a slow burn, but making progress.

Happy to chat more if you'd like, just reach out.

Best,

Michael

@Danny D. I think you can make pretty much any place work in Colorado if you are creative. I just finished building two homes in Fraser, CO (so Winter Park basically). One I long term rent because it's only a 3 bed and properties in this size and in this area tend tend to be a dime a dozen on the short term market. Other is a 6 bed and I short term rent that. All cashflows. But many factors to think about here. Reach out if you want to connect and if I can help in any way.

Best,

Michael

@Jennifer Thompson Are you still looking for a STR and/or Long Term rental? I just built one of each in Fraser, CO. Happy to chat.

Michael

 @Bo A Vanecko Did you ever net out anywhere? It's been a year since you posted, but thought I'd jump in on the conversation. Grand County can be tough when it comes to short term properties. If you buy anything 3-4 beds or less, you are a dime a dozen in the STR market there. This is mainly due to the fact that many from the front range with a rental here typically rents their properties when they aren't using them so there is a lot of competition. Short Term property management companies in the area usually charge 30-40% which I personally think is too steep. Especially for these sized properties as it typically cuts into any potential profits.

I recently finished building two houses in Fraser. Pull out more money than I put into them so I got paid to build two houses. (e.g. no money into the properties) I'm long term renting one and cash flowing on that. And am short term renting the second larger house. I decided to use Evolve Vacation Rentals. So far so good. And they put the property on all the sites. 10% fee seemed more reasonable. Key thing is getting a good local cleaner. They help coordinate this as well.

Feel free to reach out if I can answer anything else.

Best,

Michael

@Nathanael Jones Glad to see your excitement to start investing. It can be a great addiction. I'd recommend connecting with as many people as you can. Learn their different approaches and then start with what you feel makes the most sense for you. I'd be happy to share my thoughts with you, feel free to message me anytime.  I've been investing for a while. I own property in three different states so I have experience investing both local and remote. I just finished building two houses in Fraser that I turned into rentals. One long-term and one short term. Happy to share any knowledge I can.

Good luck and reach out if you'd like to connect.

Best,

Michael

@Matt M.

Thank! I have heard good things about elevation but hasn’t called them given their location but will give them a call.