All Forum Posts by: Shiloh Lundahl

Hey@Jeremy French. First off, I am by no means an expert in the STR space. I am still in my learning curve. With that being said, I own and manage 5 large short-term rentals. Three in Costa Rica and two cabins in Lakeside, Arizona (you can click the link in my bio if you would like to see for a frame of reference) I have about 4 years of experience in this space and I would say I that your decision should be based on your goal for the property.

If your goal is just to save money on taxes and you aren't concerned as much with perfomance then I don't know if you would need any coaching. You may just want to make sure you work with a tax accountant who is very knowledgeable in the tax loophole you want to take advantage of. 

If you want to get a property as a second home and that you can rent out to help cover the costs of the second home so that it doesn't increase your cost of living then you may not need much coaching for that. You could probably get that by watching YouTube videos and making tweets along the way and you and a spouse or family member or cleaner could probably handle most of the work that comes with it. 

If you want to do really well with your short-term rental and have it really be an income source then you will likely need to get coaching on which house to buy, how to set it up, learn which software will be best to use, how to market it the best on the most poplar plateforms for the area, and how to respond to guests in such ways to get a 5-star review most of the time so that your property will stand out and become one of the top 10% of the short-term rentals in your area. This takes a lot of effort and time because you are stepping into the hospitality space which is a different aspect to real estate investing and much more time consuming. And it will likely take you a few years of trial and error to learn all of this. 

With all that being said, I have hired 2 coaches. One from your list above that I spent $10,000 on the education. And another not from your list that I gave $8000 to for 10 sessions of private coaching but I ultimately asked for a 50% refund because he ghosted me half way through the coaching program and it took me writing a review of my experience working with him and sending it to him to proof read before I posted it to make sure everything was accurate in my review, before he refunded the $4000.  My problem with the coaching program that cost $10,000 was that there was a little one-on-one coaching but it was self driven and I felt a little guilty taking up the time of the coach because he was very busy and he gave access to his materials so felt like I should watch his materials rather than take up his personal time. He also hosted conferences and retreats but the conferences and retreats were additional costs over and above the $10,000 which I didn't like. And then I was placed in a learning group with other people with varying degrees of experience which did not match my experience or my goals so I did not find the group helpful at all. 

So if you are going to get just one STR and you want it to perform really well financially then I would encourage you to get a coach that will do more personal hand holding throughout the process. Interview several of the people they have worked with personally in order to find out what their experience was like so that your expectations match what they deliver.

Good luck to you. 

@Chris John that's the color it was when we got it. My wife thinks that we should paint it so it's not so bright, however, I thought it looked awesome. In fact, this is how I wanted to do the kitchen but my wife wouldn't let me. She thought it would shrink the pool of buyers.

This thread is full of a lot talk and opinions. Let's look at actual data to see if it is a good time or not to get deals. Here are my last 2 deals that I purchased:

DEAL 1

I bought this house for 185k

https://www.zillow.com/homedetails/834-W-Cholla-St-Casa-Grande-AZ-85122/67430080_zpid/?utm_campaign=iosappmessage&utm_medium=referral&utm_source=txtshare

I put about 15k into fixing it up. The closing costs to purchase were about 7k and holding costs have been about 5k so far. I have it on the market for 275k for sale. I am also offering seller financing with 10% down or a lease option with a 5k option fee.

If it sells on the market with only 4% in closing costs then I make about 50k but I have to pay more in taxes because of short-term capital gains.

If I do seller financing then I get $27,500 up front I make about 56k over a 3-5 year period but I have no money left in the deal and I can get another deal with their down payment. 

If I do a lease with the option to buy I get 5k up front but I have to leave about 10k into the deal but I make about 98k over 3 years if they exercise the option. If they don't then I can do another lease option and make more or I can sell it on the market at that time and only make 86k.

DEAL 2

I bought this house for $206,500. We put about 15k into getting it cleaned up and replacing the carpet downstairs and painting the interior. 

https://www.zillow.com/homedetails/1649-W-Wilson-Ave-Coolidge-AZ-85128/71688582_zpid/?utm_campaign=iosappmessage&utm_medium=referral&utm_source=txtshare

Closing costs and holding costs were about the same as the other $12k and I have it on the market for $285,000. 

it is also on the market for sale or seller financing or lease option.

Sales estimated profit would be anout $50,000. 

Seller financing profit is estimated to be about the same as above 56k with no money left in the deal.

Lease option profit is also estimated to be just under $100,000 between the option fee, the debt pay down, the cash flow, and selling it 10% higher than today's value.

These deals were harder to find in my market a year or more ago. Now I have people calling me up asking if I will buy deals like this. 

I would say that deals are out there for those that have more experience and skill. But I would also caution against putting too much in the market right now because things may take longer to sell or you may need to switch strategies and hold on to the deal longer and leave money into the deal. So I would say whatever you decide to do, make sure you have enough money in reserves to handle things when they don't go as planned.

@Peter Tverdov how do you source your deals?

@James McGovern when I was new to real estate investing I used to think the same thing. But after purchasing hundreds of deals through wholesalers, I've learned that it is important that everyone gets paid and that I have a good relationship with wholesalers . It isn't up to me to determine how much a wholesaler gets paid just as much as it isn't up to them how much I make on a deal. If the deal makes financial sense I would say go for it regardless of what a wholesaler makes. Wholesalers have made me millions of dollars and they are a vital part of my business system. So I treat them as such. When a wholesaler send out a deal and I sent them a text back saying that I want the deal, I want the wholesaler to have the confidence in me to tell everyone else that the deal is no longer available even before I get the earnest money in. 

@Travis Timmons, Nate's reply to you is exactly what is wrong with new investors who want coaching but don't want to pay very much for it. When you basically offered to be his mentor for free he stated, "I may take you up on that  down the road." He doesn't understand what is being offered and he is undervaluing it. His response should have been, "Really, you'll take me under your wing and show me the ropes. I'll rearrange my schedule and do whatever it takes to learn from you." But his response wasn't that. It was more like, "Gee thanks Mr. I'll keep that in my pocket in case I need it in the future.

This is what I have learned by both paying for coaching and by providing mentorship and paid coaching. And I am going to separate mentorship and choaching. Mentorship isn't something that is paid for. It is something that just happens organically or spontaneously through relationships. It's looking up to someone and learning from them through proximity. There is no contract and no expectations that must be fulfilled. On the other hand, coaching is a specific roll with expectations and often compensation. The coach sells a student on what they can expect to learn from them during a specific timeframe. The student realizes or should realize that they are buying education, services, products, or experiences. There is usually a contract either verbal or better, a written contract defining expectations. 

With all that being said, most people who are willing to pay for coaching tend to take it more serious than those who don't because they exchanged a store of value (money) for another store of value (knowledge). Yes you can learn from what you read in books. However, books on real estate often provide you with the ingredients of a good meal, but they don't provide you with the directions on how to use the ingredients correctly in order for the meal to turn out the best that it can. And if you misuse the ingredients you may come up with a dinner disaster.  Having a coach his gone through the process over and over again is like someone alongside a student driver, helping them feel comfortable behind the wheel. Can you learn how to drive from a textbook? Technically, you probably can. But until you get behind the wheel, you're not going to know what it feels like to drive that car. And having three teenagers, I definitely see the value in having somebody alongside of them, helping them get the feel of how to drive.

Hey @Jeffery Barnes, this may be a pretty risky deal. Is that specific area in Apache Junction zone multifamily? Because if it's not, and if you're putting a lot of units on one parcel, then it will be hard to get the bank to refinance you out of your initial loan. Also, with regard to short term-rentals, Do you have a lot of experience in that field? I don't know anybody that is doing short term rental in Apache Junction. It's not really a destination place. I've owned probably 30 different houses in Apache Junction over the last 10 years and I wouldn't think of it as a vacation rental market. 

It's possible that they posted it on the wrong forum and it was removed by a moderator. What was it you were hoping for with the on-demand coaching?

@Ethan Tomlinson you don't have to have a lot to offer. Here is an idea, find some investors in your market that have between 3 and 10 properties. Reach out to them and say, my name is Ethan and I'm pretty young but I've been learning a lot about real estate investing. I was wondering if I could treat to to lunch within the next couple of weeks to ask you about how you got started investing in real estate. You will likely get a good response if you approach it this way. 

@James Wise I get the frustration of working with a newbie investor. They have read or listened to real estate investing information and have tried to piece things together to do a deal and make money. But their problem is, they don't know what they don't know. And then, when they start to see their profit disappear, and then their own capital disappear, they start to panic and go into survival mode of every man for himself or I need to stop the bleeding to save myself. They don't have the context of this is just one deal and that developing and maintaining relationships will bring a better ROI then burning relationships over one deal gone bad.

This is part of their learning curve and they are responding out of fear like most humans do in similar situations. I'm not saying it is right and clearly it is not the best way to handle the situation.

I think in order to not get strung along and then eventually dropped without getting paid for the services provided, it is important to define roles and go over expectations with new invesetors. Especially on what to expect if things do not go the way the investor hopes. 

This may just be a lack of experience and having unrealistic expectations rather than a fundamental flaw in personality.