All Forum Posts by: Robert C.

@Alex Euziere, Co-hosting is definitely something I haven't heard much about. I will do some research on that. I definitely think partnering with a company would be fantastic if I could find the right contacts. One thing I learned from my brother (a doctor) is that some of the hospitals actually partner with nearby hotels/motels to provide extended outpatient care after they have to leave the hospital. I'm exploring that option, since there's a hospital really close by. 

@Lauren Kormylo, Some of the units could have a doorway cut, but I'm not sure if it will be worth the cost. The tricky thing about this is also balancing setup costs with potential income. Since I'm eventually just going to knock everything down, I don't want to overspend just to make a few bucks. Constructon costs in the Bay Area are out of this world right now. 

Boy oh boy, where’s that “can do” attitude BP? ;)

Maybe we can reframe my asks a little. Instead of looking at the scenario as “this guy’s an idiot with a loser property”, can we just assume the building is what it is and talk about how we could make the best of the situation for the best chance at getting some renters?

@Lauren Kormylo, to your point - what do you think if instead I just rent half the bedrooms. So then it’s only 6 renters sharing two bathrooms. And I can provide the empty rooms as extra storage or something else marketable/rentable?

My cup is half full here. Anyone else want to join my world of rainbows and unicorns?

@John Underwood, To be clear, the intended purpose of this property is a development project. My question is for feedback on whether there’s a way to get it cash flowing for a couple years. I would never purchase a weird property like this for rental only. 

@Michael Baum, Yes, there are 12 single occupancy rooms. Everything else is shared including the two bathrooms - kind of like a dormitory. 

I've got a "brain storm with the audience" question for the Airbnb/FurnishedFinder/Furnished apartment/STR experts out there - looking for some ideas. I'm mostly a long-term hold apartment investor, and now getting deeper into the development world. I've tried doing STR on a couple apartments but haven't really figured out the right formula yet (and it's not my focus), so my experience with sites like Airbnb is super limited.

Here's the scenario: 

I've got a property lined up for housing development, but the planning process is probably going to take 2+ years before breaking ground. There's an existing building (looks like a house from the outside) on the site that was previously used as a senior living facility. It has 12 dorm-style bedrooms and two bathrooms, plus lots of common space (TV area, kitchen, outdoor space, big basement storage). I'd like to see if I can make some income while subdividing the lot and obtaining permits. While STR would probably make more sense the way it's laid out, my preference is 30-day+ rentals to avoid problems with neighbors and the local jurisdiction. It's in a nice residential neighborhood in the Bay Area, so near a lot of tech employers as well as hospitals/small businesses plus access as a home-base to all the things the region has to offer.

What would YOU do to make this thing marketable and income-producing? Amenities? Target audience? Price point compared to standard rentals? Any other ideas?

Airbnb keeps reporting that 30+ day rentals (has anyone coined the phrase "MTR" yet??) are on the rise during the pandemic, and they claim it's here to stay. And with still super-high local rents, I was thinking maybe some cheaper alternatives could be appealing with the right marketing/amenities/pricing.

Any thoughts would be appreciated!

@Lane Kawaoka, I think not a big game changer due to the owner occupancy requirements, lots of loopholes for cities to push back, and high construction costs. 

Also, people here seem to be confusing SB9 urban lot splitting with the ADU law. My reading of SB9 seems to show you need to choose one or the other.

If there is a larger impact than I predict, then it’s like any of the other regulations here, where there will be winners and losers. For example, certain neighborhoods may be more conducive to speculation and drive down single family home prices there. Meanwhile solidly high end neighborhoods where nobody wants to split lots may go up even more in value. 

Whatever the case it's going to be awhile to see how this pans out on the local level. And as with the ADU law, I suspect the state will have to modify SB9 later to try and enforce it better.

Anyone look at AB345 yet?? Now that looks like you might start selling your ADU's! One thing is certain - CA is feverishly changing zoning at the state level and there will be money to be made if you pay attention and react faster than the rest.

@David Taylor, I'm not an STR investor, so take this worth a grain of salt. But your question implies that you are buying a property based on inflated STR income numbers. If you buy based on other fundamentals like the underlying value of the property (buying at a slight discount), or regular long term rental numbers, then you will have one or two other exit strategies at least if things go south on the regulations. If you buy based on hotel-type returns, I think that's a much riskier proposition.

@Seth Borman, Can you point to the text that excludes the duplexes from owner-occupancy? I want to scope it out and didn’t come across the distinction in my first reading of the law. But even if that is the case, I wonder if many conversions for single family to duplex will actually pencil in terms of value since duplexes often trade at a lower $/sq ft. And I wonder then how the market will eventually value sfr+adu vs duplex if there are a lot of conversions. 

@Lauren Bellis, If you haven’t established residency yet, I would look at all legal structures to protect all your non-California assets/income from being captured by the California tax code. This doesn’t exactly answer your question, but it’s something to think about depending on your financial situation and future investment plans.

There are many successful, wealthy investors in CA, but if I had a time machine, I wish I knew about the clawback provisions California has in their tax laws for if you ever decide to move real estate assets out of California through 1031. 

@Adrian Hollifield, I think SB 9 is hamstrung by the rules around owners needing to live in one of the units up to 3 years. 

SB10 is super ambiguous from what I can tell and depends on what city you invest in. 

On the other hand I am encouraged by the increasing pro-development initiatives from the state. It will just take time to work out a lot of kinks and see the effects on the local level. 

My impression of FIRE is that it's not a mindset of abundance. It's financial freedom through careful planning and calculation. And I think to its credit, it teaches people that achieving a realistic retirement at an earlier age is more achievable than some folks think. The basic goal, from what I see, is to reach a certain minimum through frugality until you can quit your job. 

On the other hand, I think the mentality of many entrepreneurs is about financial freedom by reaching monetary escape velocity from the system. There's a different risk psychology, and there's probably a higher statistical chance of failure. But there's way less interest in counting all the pennies, with the emphasis on productivity, growth, and financial reward.

I don't think they are mutually exclusive concepts.