All Forum Posts by: Reese Newell

 @Julian Sage I have been listening to the VRM youtube channel. I decided this past week to pivot from learning on LTR to STR as I know I will be more passionate about it as an avid traveler and user of the service. It is highly appealing to me with my background and so I am consuming as much knowledge as I can this week to build out my blueprint. I've seen all of Scott's videos on airdna. It gets a bad rap alot here, but it is certainly extremely helpful if used for what it is good at and then backed up by data elsewhere.

Thanks @Julian Sage, that's pretty wild that you responded to the post I had up.  I am in the middle of listening to about 30 of your short term rental podcasts now.  Thanks for all the information you put out there and thanks for clarifying that...airdna has quite a bit of data that does not explain how they arrive at it.

@Jon Crosby, you've been a great help on these forums so thank you for that.

I was trying to find information on how they drive their "revenue potential" vs "revenue".  The revenue is in line w/ their actual performance, are they trying to state if it was run more optimal they think it could hit the revenue potential?  I'm a little lost w/ where they come up with this figure from.

Also, revenue is derived by also adding in the cleaning costs so when analyzing we need to take this out.  Since it does not include occupancy or city taxes can we simply ignore them in our calculations.  Airbnb passes those on to the guests now, so I assume those are a wash when we do our expenses to try and run our own numbers?

Cheers!

There are great threads on STR and I really appreciate you guys for answering so clearly in them @Mark Miles @Paul Sandhu.  Instead of starting a new thread, I figure it is easier to ask some here that I have for starting out.

1) Others recommend finding rentals that will also work as LTR or breakeven in the case of it not functioning well. I don't mind losing and in my market nothing for STR will even remotely work for LTR. Do you guys strictly underwrite them and find off market deals. Or are you simply looking for places that are potentially less work and fit your criteria and numbers to get on the ground running quicker? As an exit plan, I would be okay taking a loss so perhaps I should be looking at places that I think will work for STR that I find off market at some discount.

2) Have you done condos or just houses/multifamilies? I see a lot of townhouses in my area listed. I assume the play is to go on their website and check the HOA rules to make sure they allow STR. Even when they do, I would be nervous that neighbors may begin to dislike my unit and can turn on me.

3) Cleaners and handymen come up over and over again.  Once you've identified some do you do meetings or an interview with them?  Do you go and check their work the first few times and then every so often?

4) What were the first few things that gave you the most trouble when you began?  And which tools do you use to analyze properties?  I am used to trying to analyze LTR and I worry that I am miscalculating expenses or using incorrect data to project potential occupancy rates.

Amazing thread. I am highly considering doing a STR, for those who manage remotely, do you believe it is possible on the first one? I am in South Florida and think the best plan of attack is to manage one locally while this covid situation dies down and learn the systems while developing my plan to scale to other locations that can be even more lucrative.

@Mark Miles How are you able to manage them from being afar? Were you near your first few STR? It seems daunting to me to do it so far from where you live. Thanks for all the advice, it is killer.

@Mike Lambert, that is a great perspective all around on it! I don't have the knowledge built in the USA to expand yet, but would love to have things set up in Brazil potentially in the future if I did move on to another country for investing.  I will be getting my citizenship there this year.  If you do buy there please PM me to inform me how it goes, I would love to hear details on how the process is different there.  One big thing in foreign countries can be the ease of obtaining loans to provide leverage, but this varies drastically around the globe.

@Mitch Price, can you share your net ROI and how the property manager impacted that versus how it freed up your time to potentially earn more in this industry? What did you outsource to the property manager?

@Mike Lambert The main thing is you cannot count on currency fluctuations like that.  If it were that simple then it would be extremely easy to print billions within a few years doing forex trading.  I would really look at the future implications of a countries GDP, their growing or declining industries, and their main exports to see what kind of potential they have.  Of course digging to the very detailed would be what forex traders would do.  

I do see the upside to the short term rentals in Brazil and do see a potential very high yield.  The downsides are the government may just take your property one day out of thin air, and you may have large issues with renovations, permitting, and needing to know the right people to grease.

@Tiago Neto & @André Rairan Zacchi Pereira, sim eu acho que o Brasil tem um mercado interssante! Nao sei se eu posso escever em Portugese aqui :).  I really don't know if BiggerPockets minds answers being in another language.  

My fiancee is Brasilian and a real estate agent here in South Florida.  Her brother runs a company that is growing very fast with 300+ employees dealing with "Minha casa, minha vida", which is a government run program for affordable housing.  The regulations are much different, and the agents under him do not need to go through any formal training to be agents.  They simply learned on the go.

As far as Brazil, wow, the reais has lost a lot of value since I first began frequenting the country some 10 years or so ago.  Their main exports Iron, Petroleum, Sugar cane, and soybeans.  Most of their infrastructure has become outdated for petroleum relative to some big players on the World stage, and with the advance of alternative energy sources, this spells bad news.  

In addition, Brazilians were extremely happy during certain presidential runs due to the economy increasing, but were not aware of the macro economic policies and their future implications on rampant inflation.  The covid effect taking place can potentially really hurt these emerging markets like Brazil.  Lastly, I am always very wary of countries with open corruption taking place at the highest levels.  While I believe I could enter the Brazilian market and make fortunes relative to the USA, I would also be building systems to quickly convert my Reais back to other currencies, all while keeping an eye on the government potentially just taking my property one day with no recourse.  

Overall, these markets provide a lot of opportunity for savvy investors who speak the langauge, but you will have to deal with a high level of bureaucracy and a lot more headaches with properties, while having to learn new systems and taxes.  I think citizenship in these countries to add to a portfolio elsewhere as a hedged risk would be a terrific path, and one that I plan to explore once my US portfolio turns in to an empire in the next decade.  Feel free to connect with me and we can have deeper chats on this!