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All Forum Posts by: Peter Jetson

Peter Jetson has started 6 posts and replied 34 times.

There was a previous thread on the same question a while ago and owners said their actuals were far away from the AirDNA numbers, which were ridiculously overestimated. This cooled me down from purchasing any STVR. I also take PM "predictions" with a pinch of salt as they have skin in the game, and would rather encourage you to become their customers than not... Not all of them are like that of course... In fact numbers varied by 40% according to whom I asked for the same unit! 

Post: Class A class B class C.... Help please!

Peter JetsonPosted
  • Cupertino, CA
  • Posts 34
  • Votes 15

@Manish A. these are great definitions many thanks. I had sort of guessed them but it is much clearer reading these paragraphs. It does not solve the problem of no reliable source to desktop research distant neighborhoods though. I wonder if I can identify typical retail stores nearby A, B or C neighborhoods. Or perhaps income levels and average age. I'm looking at Atlanta and Boise at the moment for instance, how do you think I could spot the B class areas on the map?

Post: Class A class B class C.... Help please!

Peter JetsonPosted
  • Cupertino, CA
  • Posts 34
  • Votes 15

Thanks guys! Yes sweat equity and a good pair of shoes (or tires) will build local knowledge no doubt, but even then, it's a bit hit or miss, and more of a challenge for out of state investors. With the amount of discussion about neighborhood classes on this forum, I was hoping an online resource existed somewhere that I could tap into. At least, some savvy people must have developed some sort of a proxy by which they look up certain demographic characteristics or some specific retail presence (Starbucks or something) to identify target neighbourhoods? Any experience on the subject from fellow distance investors? 

Post: Class A class B class C.... Help please!

Peter JetsonPosted
  • Cupertino, CA
  • Posts 34
  • Votes 15

I really like this easy classification of neighbourhoods. Has anyone seen a listing of cities or neighbourhoods with these categories indicated? Or does anyone know of a proxy criteria I can use? Really struggling to find good usable data to evaluate neighborhoods in a target city. It's easy to find the A or A+ areas, but how do you find the solid B? Help please! 

Post: Late to the party...☹

Peter JetsonPosted
  • Cupertino, CA
  • Posts 34
  • Votes 15

@Joel Owens many thanks for the response. I think I get your point, which is more about trying to get quality new builds early rather than chase the bottom of the barrel in low quality SFHs. Now that is a bet on appreciation, and also a bet that the market will not crash soon. I am encouraged by @AJ Leman data, which also points to the fact that more and more higher middle class and retired people are becoming renters, which would argue in favour of your suggestion to go for higher end properties. Clearly the risk is significant, you really have to go for the right subdivision in an area on the upside. How do you go about finding those (any good web site focussed on new construction?) and being early if OOS? It's kind of the hold version of a new house flip, but it requires the same ability to bet on the right ones.

Post: Late to the party...☹

Peter JetsonPosted
  • Cupertino, CA
  • Posts 34
  • Votes 15

I was listening to Podcast 245 this morning with Ryan Holiday and at some point in the podcast, there was a discussion about how everyone who invested in 08 and 09 looks like a genius today. Well, like perhaps many other newbies here, I was looking elsewhere in 08-09 and did not jump on the opportunity. Now I am ready to invest and of course, I'm late to the party :(

Everywhere I turn, I find cap rates below 5%, and I don't really want to go into risky C or C- properties or Rust Belt markets for my first investment, as I might find myself squeezed if the market crashes, assuming we are closer to the end of the up cycle now than we were 5 years back.

So what is your advice, seasoned investors? Faced with this challenging environment to kick things off, what would you do? Sit tight and wait? Be super prudent and accept 3-4% cap rate deals? Go all out and play the risk game alongside others who have a low cost portfolio to keep them afloat if disaster strikes? I'd be keen to hear your views especially if you started investing in 06 or 07, i.e. right at the end of the last cycle and before the crash. What would you do now armed with your experience if you were in my shoes?

Originally posted by @Nancy Bachety:

@Peter Jetson Yes. We are doing that now on the verge of "retiring". We diversify with index funds and real estate. Within our real estate, we diversify with long term and short term. One STR is separate quarters of our primary, near the ocean, so our primary is an asset instead of a liability. One STR became that after we renovated a sfh in a college town ahead of the lease for the college students (our daughter is one of the four) and it did so well I might revert to STR after she graduates in two years. One STR is in a great town where we'd love to vacation and live part of the year. We bought it for us in the near future but use it as a STR in the meantime to pay down the mortgage .

I said the exact same thing as you: I want to bounce to places I want to spend time in. We buy with that in mind and of course, the demand for STR too.

The next place I’d consider is in the mountains, like eastern TN or NW SC. 

Besides that, I want to travel also, like right now. Like @lucas Carl   we are vacationing on the beach for a week.

Incidentally, the IRS allows you to spend time in your STR while working on it, separate from the 14 day exclusion. We always seem to find something to do to work on, by definition.(check with your cpa.)

It might not be the maximal STR buy but it's a home for us that cash flows. Our other investments are much more optimized though.

Hi five Nancy ✋! I was beginning to wonder if I was crazy or just plain stupid. I think everything that was said about optimisation is true, but this is where it depends whether your objective is to milk the last dime out of ALL your investments or if there are some which also contribute to your own lifestyle and satisfaction (yes admittedly at the expense of optimisation). But what you are describing is foresight and planning ahead. So you have a mix of STR and students, but no real unfurnished LTR, correct?

PJ. 

Originally posted by @Jenessa NeSmith:

I could see this strategy working if there was one main place your family wanted to stay for a longer period of time, and it worked for vacation Rentals.

For example, let’s say you and your family love a particular beach town in Costa Rica, but live in Nebraska. You’ve done your home work and know that this beach town will support multiple Airbnbs, and are already familiar with the area because you’ve been there a lot. So you go ahead and buy several vacation Rentals, or some multi family units. You spend a few months in one of the units each year, but use that time to make updates on your properties and insure that everything is running smoothly.

If you are able to afford multiple vacation rentals in multiple cities, I say go for it. However, the idea of having one vacation rental in a bunch of different cities doesn’t make very much sense. Better for your time and money to stick with a local investment strategy and then jet off to wherever you want.

 That's another good idea I had not thought about. Multiple paradise properties and use one as base for DIY maintenance and upgrades! Fun and active at the same time... Thanks Jenessa! 

Originally posted by @John D.:

        If you are really good at renting out your properties, and maximizing the rental income, you will want to stay in someone else's property (if you are planning in advance).  You'll want to stay at someone's home who isn't as good as you at maximizing returns.  It will be far less expensive to stay there, then carving out time in your own (optimized) calendar.

 Hi John, that's a smart point of view. I had not thought of it that way, arbitraging STVR optimization skills 😎! 

@Ethan Cooke agree! Although I don't know about you but I hit disappointing snags in 15% of my AirBnB rentals. Something difficult to predict from pictures in spite of reading all the reviews. So a benefit of being the owner is that you know exactly what you'll find. Another small one is to have most of what you need in a small locked storage so you can fly in with a small bag. Or a larger locker, thinking bicycles or longboards in Hawaii. But I agree all this is modest if it means your investment is a dog as a result. Hence my asking if anyone has managed to win on both sides!