All Forum Posts by: Ryan Moyer

Nothing wrong with starting with arbitrage and building up some money to buy a place later via arbitrage rather than leveraging all-in at 100% financing at the potential top of a real estate bubble (unlikely, but possible).  This just isn't the place where you'll find any useful info on it.  And people here will generally steer you towards buy-at-any-cost since everyone here is a real estate investor, which isn't necessarily bad advice, but it could be extremely risky depending on your financial situation.

The only real outlier amongst all the communities is Reunion, which is higher end and less ROI friendly. If you want it primarily to use for yourself and want to make a little money on the side then it might be worth considering because it's the nicest neighborhood with the nicest homes. But if you want it primarily with cash flow as your number one goal then it's probably not a good idea both because the homes are more expensive there (and while they'll rent for a little bit more, not enough to make up for the higher acquisition price) and because your guests don't get access to the resort amenities unless you use their preferred PM (bad idea, your best returns will come from either self managing or finding a smaller boutique PM that takes a smaller cut).

Outside of that, there are a bunch of neighborhoods that are basically the same.  Champions Gate, Solara, Storey Lake, Solterra, Windsor at Westside, etc.  I stressed over which of those neighborhoods to buy in and, in the end, now that I have mine in Champions Gate and manage a few others in other resorts, I've realized it doesn't really matter.  If you want, you can visit the area and pick your personal favorite.  Short of that you can expand your search to all of them which will give you the best chance of finding the best deal since you'll have more inventory to choose from.

So long and short of it, based on your goals you need to decide on Reunion vs. all the rest.  If you choose 'all the rest', I don't think it really matters much which one unless you have a personal preference.  They're all essentially the same thing.

ETA: Oops I forgot to mention the other outlier.  The original Windsor Hills, which is older homes, a lessor resort area, but much closer to Disney than the rest.  This would be a good option if you're looking to buy a place to do value add via major renovations on and really modernize.  A fixer upper option, of sorts, moreso than the normal theming any of them will require.

In practice "corporate lease" is more just a term that STR arbitragers use to pitch their idea to landlords to try and get an agreement to be able to sublet their place without using the term "airbnb" or "short term rental" in the sales pitch. It's a way to make it sound a little more classy to the landlord. I think it's kind of silly, both because it's misleading, and because it's unnecessary (the better idea is to just convince the landlord why short term rentals are a good idea for them), but it works for a lot of people.

Ultimately this isn't a good place to find info on arbitrage.  It's a legitimate business model but this is more of a real estate investing forum than a business forum and most of the folks here have an irrational hatred for it.  Even further, those of us that don't dislike it don't really have any experience with it (we're here as real estate investors) so any info we're providing is just guessing and probably less helpful than what you'll find in arbitrage groups on Facebook, etc.

Davenport/Kissimmee are pretty well separated into STR resorts and residential neighborhoods. Yes the STR resorts have HOAs, but they are HOAs designed to manage a short term rental neighborhood. They're not your traditional HOA where you have to worry about them changing their mind.

Average daily rates/income are going to be heavily dependent on what kind of place you're talking about.  If you're looking at big 8br themed homes I'm happy to share the numbers from my place with you.  Everything else AirDNA/Rabbu are a decent starting point, and you can also comb through calendars of listings that are similar to what you're interested in and get an idea.

Regarding saturation and CoC and Orlando, I wouldn't do Orlando without theming. Even that is starting to get a little saturated, but not there yet. As far as regular nice houses with nice furniture go yeah, that's pretty saturated. You need to stand out in this market.

A lot to unpack here.  I will say in regards to uniqueness of the property/location, a lot of that is going to be market dependent.

For instance I think most people here will agree that your money will go a lot further, in terms of ROI, in Destin if you're looking at places a block or two off the beach instead of beachfront property. That is, a beachfront home may bring in 20-30% more revenue than a home with a pool a block off the beach, but the beachfront home will cost 200-300% as much to acquire. Though you're not wrong that the beachfront place has room for a lot more potential appreciation, if that's your goal.

Part of this I think is more recent, as well.  For instance in Collin's example I bet there is a much higher premium on acquiring a riverfront property in Gatlinburg now than there used to be.  That property would probably sell for $1.2million now, and I'm sure it makes a lot more than a bland 2br cabin in the woods.  But does it make more than a 4br pool cabin?  Because that's more what it's comparable to in terms of pricing.  I think you really have to evaluate it market to market and deal to deal on whether the price premium is worth it, given that those premiums are much higher now than they used to be.

I'd say the same thing in regards to your question about rural locations.  There is definitely more upside there if you can identify a new market ahead of time.  But rural locations are in a really tricky spot right now.  Rural rentals shot to the moon coming out of Covid when everyone wanted to get out away from the cities.  So revenue blew up, which meant home prices blew up.  Now travel trends are returning more to normal and rural rental revenue is normalizing back towards pre-covid numbers, but the home prices haven't adjusted yet.  So a lot of those homes are kind of in a weird limbo right now.  I have a place in rural Utah that has followed exactly this pattern.  Historically 50-60% occupancy.  2021 occupancy was more like 95% as everyone flocked to the outdoors stuff around there.  Now occupancy is getting back towards 50-60% but investors haven't caught on yet and are still paying silly prices.  There's no way places in that market cash flow with historical occupancy and current prices, and I think that will adjust soon.

I see Orlando listed in your post. Is that where you live? Depending on your budget, you're already right in the middle of one of the best STR markets.

Hard to underwrite something like that.  Seems like you'd have to take a leap of faith on it which means the returns could be huge (much moreso than a traditional spot where it's easy to underwrite and that will drive the price up to the proper amount), but obviously tons of risk as well.

I don't know much about that area but I see the place you're looking at and it looks really cool, although probably needs a lot of work. Looks like most people that travel to the area are there for the lake, which this is far from. Not sure if there is demand to stay in downtown Wallowa, but the fact that there is only 1 STR there would skeeve me out some whether it's due to regulations or lack of demand.

Isn't the wait list for those things like a decade at this point?

Last I heard they had a waitlist of 100,000 that they wouldn't even get started on until after they finish deliveries for their government housing contract.

LTR is not going to work as a backup in many STR markets now that home prices have caught up to revenue in STR markets.

When most people talk about LTR as a backup though they're usually talking about due to regulation, which is so unlikely it's almost a non-factor in the Smokies. Not having to worry about a backup plan to STR is one of the main draws of doing your STR in the Smokies.

How do you find new leads to co-host for, and sell them on your (I'm assuming remote) management?