All Forum Posts by: Paul Sandhu

$997 is a lot of money to learn something that you can figure out on your own using common sense, psychology, finance and marketing.

Put yourself in your potential tenants shoes and do what it takes to rent yourself a house, from scratch. 

That's Paul Sandhu's STR Formula, and it was free! Put the $997 of yours towards unexpected expenses, they will happen. Especially when a meth head breaks into your STR and steals the HDTV, Roku and modem; but you can catch them the next morning when they are still sleeping in the house. That happened to me 72 hours ago.

I agree with Tim. That software is overkill.  I have 22 STRs.  My wife and I do the book keeping.  I have a dead tree calendar where I write down the rent collected each day.  At the end of the week I total the amount collected for the 7 days.  At the end of the month I total all the weeks.  At the end of the year I total all the months and use that number for my taxes.

My wife does all the expenses in a spreadsheet.  The 3 categories are utilities, supplies, repairs & maintenance.  There is also depreciation, but we let the accountant figure that out.  It's simpler than it sounds.  

Now if you were running a petrochemical factory, an amusement park, or a grocery store; then I can see the necessity of software.  

The accounting for a STR shouldn't be much more complicated than the accounting for a lemonade stand or a garage sale.

Never used Mash or Air Academy.  Tried AirDNA a few weeks ago and the results were spot on with my rentals in this town.  Dug a little deeper and realized that AirDNA's data was just my properties and nobody else's. 

Find a bank foreclosure sale, you can probably buy it for 25 to 40 cents on the dollar.  If it's in a good neighborhood in a good city, you have the potential to make a lot money in your big pocket. 

No website is going to tell you what a good neighborhood in a good city is going to be.  That's where you do your groundwork in person.  People (not necessarily you) think they can just do some research on the internet, buy a house, sit at home, and the money starts flowing in. 

Start with your city, then work out from there (unless you are LucasCarl).

You would probably be better off renting out living space in your own house for STRs.  Instead of buying a condo, what if you spent that money enlarging your own house?  Add 2 more bedrooms and a bathroom, and another family room.

It could probably be done if you live in the same city. But I see you live in Cali and are trying to run a STR in Las Vegas.

My two words of advice:  Forget It

LucasCarl could probably do it, but they have experience running a remote STR.

I drive by one of my STR's on my way to work every morning. I can see the back yard and the back porch. I leave the porch light on. Wednesday morning the porch light was off. My wife noticed it too. She went in to investigate and saw a q-tip on the floor and the medicine cabinet open. She told me about it so I went in there Thursday evening. Front door was locked, but the HDTV, Roku, cable box, modem and 39 gallon plastic trash can were gone. A big mirror that was over the fireplace was by the back door, along with some small kitchen appliances. I figured someone had a key and let themselves in. The back porch light was unscrewed. I screwed it back in. I contacted the cable company to get the serial numbers of some of the electronics.

This morning I drove by and decided to take another look inside.  I unlocked the knob, but the deadbolt is locked.  I didn't lock it. I unlock the deadbolt and push the door open with additional effort.  There were some sections of 2x4 that were bracing the door shut.  I picked one up and walked through the house, with the 2x4 ready to swing.  A door to a bedroom that I left open was now shut, and there was another 2x4 that was bracing the back door shut.  I thought there were 2 possibilities:

1. Someone entered the house and braced both doors, then left through a window.

2. Someone entered the house and braced both doors, and is still in the house.

The police department is 4 blocks away. The first unit arrived in 90 seconds, the second arrived 30 seconds after that.  I explained what happened the night before, and how today both entry doors were braced shut.  They drew their guns and flashlights then went in the house yelling "Coffeyville Police! Identify yourself!"  A minute later I hear more shouting, it sounded like "Get on the ground!"  A minute later they are escorting a handcuffed person to the back of their car, then they invite me in.  He was sleeping in a bedroom, and they were going through his duffel bag.  They found a sufficient quantity of meth to qualify as intent to distribute, plus clothes, lottery tickets, soap, shampoo and other personal items.

He didn't have a key.  He broke open the back door window wide enough to stick his arm through and unlock the door knob from the inside.

That's my story.

On the refrigerator there was a flyer with pictures of my other houses.  But that flyer is now gone.  I'm concerned that this meth head gave the flyer to other meth heads.

98 percent of the people I rent to work at a refinery, they have to wear flame resistant (FR) clothing.  All the FR clothing has tag or other mark on the shoulder that identifies it as such, and some custom embroidery on the chest identifying the employer.  The most common brand of FR is Bulwark.  The laborers wear a solid colored FR shirt.  Management wears some sort of checkered or striped FR shirt.  So I bought half a dozen striped Bulwark FR shirts and had "Paul's Palaces" and the Bulwark logo embroidered on the chest.  I wear one 3-5 times a week.  I bought some used solid ones on eBay and had those embroidered too.  Once in a while a new tenant needs an FR shirt, and they ask me where they can get one.  I give them one of my solid colored ones.

What do you do?

3. Most people that I deal with don't want to share a house with strangers.  So I rent out the entire house to that person and the rest of his group.  It might be 1 or 2 people staying in a 2 bedroom house. 

Michaels post above is dead on about ROI. I have 22 furnished rentals in this town. About half are 2 bedroom units. The other half are 3 or 4 bedroom, my largest has 9 beds and 4 baths in 3 stories. On average, they all make about the same amount of money each year. That house with 9 beds and another house with 6 beds have generated up to $1200.00 each per week, but around $800 is the norm. They sit vacant over half the year. My 2 bedroom places top out at $400 per week, and they are usually rented. Yes, it would be more economical to just have 2 bedroom houses, but you can score a grand slam every now and then with a big house that makes the higher cost worth it. I'm paying between $6-$8 per square foot on bank foreclosure houses.

Find a niche market and aim for it.  My 22 STRs are for travelling workers at a local refinery.  On any given week there may be 25 to 125 travelling workers here in town for shorter jobs.  My houses are an alternative to living in a motel for the duration of their work.  Costs less, can do laundry, can cook food; those are the 3 main selling points.  Minor selling points are having more space and privacy, a streaming HDTV, bbq grill, and outdoor recreational areas.

It's pretty straightforward accounting.  Depreciate the cost of the house straight-line over 20 years and expense everything else in the current year.  One thing my accountant does is deduct for gas/mileage on my work vehicle.  $6000/year.