All Forum Posts by: Michael Porche

I'm looking to partner with a friend of mine and buy some land and then build PreFab's near a national park or outdoorsy area in either VA or PA (Think Poconos or Shenandoah NP). Our thoughts are are a city/town that's a close destination to the outdoors, but also not too far from some major cities.

Basically, the location isn't strictly determined yet. We'll look for land, maybe 3-5 acres and dig for water, route electricity, etc, and then build either a prefabricated home or an A-Frame perhaps. We're both in the very early stages of this and really looking for some insight/advice.

- Has anyone done something like this?

- How hard is it to build one STR, and then build a second or third STR a year or two later?

- What does zoning look like for something like this? Is it township/city specific?

-What are some other things I should be looking into/consider before purchasing land?

Not sure what else I need to add for more context, excited to continue this conversation!

Thanks!

-Gabe

Great question! and love what you are doing. I have some land I am building on now in Shenandoah! I also started doing this project in Idaho where we are looking to buy land to build for the same idea. It all depends on the availability of contractors and land use. The city/county has to be willing as well.

1 Vote

Quote from @Chi Sonubi:

Quote from @Scott E.:

Here are a few things to add to your due diligence checklist:

1) Home inspection, just like on any other property you buy

2) Additional inspections depending on age of property (like scoping the sewer lines, for example)

3) Study STR regulations in your city to ensure this property is permitted for this use

4) Interview 2-3 STR property managers to understand your income potential on this home

5) Study competitor properties on Airbnb and look for what they are charging per night, how they are finished, how they are furnished, etc

6) Consider your backup plans in the event your city starts cracking down on STRs and impacts the sustainability of this business for you

Appreciate this list! Interviewing STR property managers is something I hadn't thought of.

I love this list! Definitely what you want to do. I would really hone in on looking at the comps of the airbnb's near yours and most like yours. Find out how much they make through airdna, that will let you know how much income you can expect. And then give planning and zoning a call for the city and find out what the STR regulations are. Regarding Scott's #6, that should definitely be in place. Ie back up plans can be long term rental, boarding stay, 30 day stays, market to nurses, market to construction works, sell property, etc

0 Votes

Atlanta, Georgia

Quote from @Isaiah Bellah:

Yeah... That's what we were coming to realize. I believe we can get that 10k back through minor updates and appreciation. I do have an in on air BNB management, but still we are not looking at a great deal here.

My follow up question is, everyone is paying over asking right now. We have had a hassle from conventional loan guys because we are self employed, even though we have the money. This is part of the reason why our loan terms are not great. Would it be better to form an LLC and get a different type of loan? We do eventually want to own a couple properties, so I'm trying to understand how to do it correctly.

Time in the market is better than timing the market. as long as you buy right and cashflow you'll be able to live through any down turn

0 Votes

Fort Worth, Texas

Thats a great question. I would advise you to get a free consultation to Anderson Business Advisors. They are a firm that specializes in structuring people's assets and tax savings. I literally saved thousands in taxes because of them. I actually have a link I can send you if interested, it allows for the free consultation (usually is $750 an hour... yikes). Definitely worth it.

1 Vote

Memphis, Tennessee

Quote from @Scott M Dorau:

David Greene briefly mentioned the 1% rule for shopping for investment properties. I am shopping now for my first property, can someone explain this?

I guess I am really trying to find out what the minimum cash flow should be?

Thanks in advance!

So the 1% rule is good for a general rule of thumb to see if something pencils really quickly in terms of cashflow. Normally for properties that are around 100k-400k would cashflow anywhere from $100-$500 a month with that. However I use the 25% rule on Short term rentals. I look for rental rates to equal 25% of the purchase price on an annual basis. If thats the case I cashflow anywhere from $2,000-$5,000 depending on the property. Let me know if you need any help with that

1 Vote

Quote from @Luz Quinones:

Hello all,

I'm new to BP but have been curious about real estate investing for some time. I purchased my primary residence 3 years back in Phoenix AZ and have a good amount in equity. I have am considering an opportunity to invest in property in Denver with a friend. Ideally the home would have a finished basement so he would live in the home and do STR with the basement. I'm willing to refi my primary for money for down payment but I know I need more education on how it would all work as it would not be my primary residence. Any thoughts, feedback and ideas are welcome.

TIA

Hey Luz! First of all congrats on making a purchase in Phoenix and having a good amount of equity in it. There is a lot to this I would consider. I would first look into how much $ would you both profit from the purchase first? That way you can decide is it even worth it to pull a loan on your house. If you are not profiting after having split the proceeds with your partner then it would be hard to justify. I personally would pull a loan from your house to buy an STR in a higher leveraged area where you can make your money back on that loan in 1-2 years. Let me know if you need me to analyze a deal for you. Would love to help

0 Votes

Quote from @Cole Simpson:

This common side hustle attracts many who are looking to make money off existing assets in their home. ⁣
⁣
About half, 54%, of those who own their own home say they’d consider renting it out through a service like Airbnb, according to a recent survey of 1,000 people by real estate data company Clever. And 82% believe this is a good money-making strategy.⁣
⁣
Airbnb hosts in Charlotte make, on average, about $924 a month, according to research from low-interest lender Earnest. Of course, that income can vary dramatically depending on where you’re based, how frequently you rent out your place, the quality of your home, and the services you provide.⁣

What are your thoughts?

Hmmmmm so there is a lot that can go into that. It really just depends. Are you solely looking for how much money you can make on your own property you are living in? Or are you looking to purchase a property in a strong market with high cashflow and a low barrier of entry. I have people in this group I am a part of that are cashflowing (after all expenses paid) on properties around 4k+. It's pretty crazy

0 Votes

Charlotte, North Carolina

Quote from @Oladimeji Sonibare:

@Michael Porche

Hey, Michael. Thanks for the reply. I’m leaning more towards arbitrage for a few reasons:

1. Less money up front. All it takes is one month’s rent and security, as opposed to a down payment.
2. My potential exit is a lot simpler/less messy. Assuming my LL was open to signing leases for as short as 6 months, I can use this model to work the peak seasons, exclusively. Once is over, my lease is up and I sign another one the following year. Compare that with having to worry about a mortgage year-round.

For sure my man! I actually started my journey with no money down strategies and went from 1-6 properties in 4 months. I believe it takes the same amount of energy, just got to learn a little more on how to do it. Would you like some info on that? If so I can message you

2 Votes

Jersey City, New Jersey

Hey!!! so this is a tough one. you definitely want to do some research and work at it. I have found little pockets that allow you here and there but ultimately its better to just call the city and ask where are they aloud or what kind of zoning is aloud for them to do less than 30 days.

2 Votes

Tampa, Florida

Kyle! that's the way to go! You're network is your networth! I think that's a great strategy and too be honest there are a lot of great markets out there that do really well. I have a guy who just bough a 46k property and is cash flowing 2k on it a month. Let me know if you need some help with this

0 Votes

Atlanta, Georgia

All Forum Posts by: Michael Porche

Michael Porche has started 17 posts and replied 209 times.

Post: Wanting to buy land+ build STRs near a NP on EC, anyone have exp?

Post: Due diligence on STR

Post: First home. Is this a good investment?

Post: Optimizing investment strategy to increase paper losses?

Post: What is the 1% rule for profitability?

Post: Real Estate investing newbie

Post: How Much Money Can You Make On Airbnb?

Post: Can I STR with an apartment that I don’t own?

Post: Areas to look that allow STR?!?!?

Post: New to GA STR Investor