All Forum Posts by: Ken Boone

Ok I have 4 cabins in that market myself and know many owners in that market.  It’s gonna take a very special 1 bedroom cabin to make 76k.  I think that projection is too high for that cabin.   I could be dead wrong but I don’t see that happening. I don’t own any 1 bedrooms so that market is not my specialty so I would look for some feedback from someone who is managing cabins like @Collin Hays

So if I did my math right you are going to pay $911 per sq ft?   Wow.  Purchasing this depends like all other investments on how the numbers work out and what your plan for the property is.  Are you doing this for purely an investment?   If so are tiny homes a fad that is here today and gone tomorrow?  Or are you purchasing for your use and you want to rent it out when you are not using it?   So it depends.  From a purely investment standpoint  I would like to see the numbers you ran. 

Quote from @Ed O.:

Are you folks really paying 2500-3000 for a cost seg study on a single family home? If so, I think that's ..... crazy. Why not do it yourself?

Because 1) I don’t have the time or energy to go figure out exactly what I need to do myself.  They produce a huge detailed report.  And 2) if I am audited they back me up. And 3) I’ll recoup enough money the first year to make it worth it for me.  To me it would be crazy to do it myself.  

Quote from @Michael Baum:

Well that I a good thing @Ken Boone. I was quoted 12k to do ours. Not sure why. 

So my cpa initially told me the company they use was going to be much higher like 8k or more but then when I talked with a friend of mine who is also a cpa he told me no no no that's not the right product and pointed me to Madison Specs. I think the the thing is is that most people doing cost seg are more familiar with the larger commercial market and not the SFH STRs and they point you in the direction of the companies that charge those amounts that typically do those larger properties. Think the cost seg has gotten more popular in the STR market and there are a lot of people that just don't have the expertise with it yet. That's just me guessing though based on my experience and the people I talked with. Madison Specs specializes in this Str market.

@Yatin G. Actually the prices are going up.  They were $2500 last year.  I think the demand has definitely gone up and that is why the price is moving up.   They do the whole deal without ever coming on site.   They use pics, surveys, floorpans etc.. 

@Michael Baum From my understanding those numbers you posted is in more inline for commercial properties.   I am having a cost seg study done right now by Madison Spec that @Luke Carl Mentioned above.  The cost is 3k and they will back you up if you get audited.  My CPA is also happy with them so far.  

Depending on where you are located in that market, you will most likely get the lion's share of business from VRBO.  All of my cabins in that market with the exception of the one I have in Wears Valley get 80% or more of the bookings from VRBO.  This seems to hold true for most of the owners I know in that market as well.

OK since this is new construction.  I will GUARANTEE you are going to have issues.  You really are going to need to stay there for a couple of weeks to flush everything out.  You need to test every outlet, be there when it rains, test every window, take baths, showers in every bathroom. Make sure hot water is where it is supposed to be, cold water the same.  If this is a well, good chance you might have bad water quality and will need water treatment.  Use all the appliances multiple times, check every inch of it out.  You are going to flush out a ton of stuff.. Been there many times, especially in that market, a lot of builders jumped on the bandwagon, they don't have good labor in that market, and there are high odds of a lot of punch list items that need to be done before you have guests in there.

Sure it's fully furnished, but I guarantee it will NOT be fully furnished.  There will be items you need to add to do things right and you won't know until you live there for a week or two.

So for 3 of my cabins, we have a power outage every now and then, but they are usually brief and don't last long.  My buddy on the other hand has a 6 bedroom pool cabin with propane fireplace and he has a ton of power outages every winter that last for days.  The first year he had his cabin, the new guests lost power, and that is when he learned the prior guests used up all his propane.  It was costing him big bucks in refunds so it was worth it for him to install one.  I don't feel like it's worth my time and money to install one at my cabins due to the amount of times the power goes out.  Now my mountain cabin that is at 2000 ft elevation I have more risk there, but we tell people if a storm is coming pack food, water etc.. and if its gonna be  bad storm, we give them the option to cancel with a full refund.  They can get iced in up there and it's just not worth the drama.

@John Underwood The only problem with the IP address is that it will be different depending on where they booked from.  Many ISP also hand out dynamic addresses so they change over time. Also if the person normally uses a VPN, you got nothing there too.  I had to do forensic audits, tracking IPs for law enforcement in the past for suspected pedophiles, and it was extremely difficult due to how the ISP was setup, and I had full access to all of the ISPs equipment.  When it was all said and done, we could not pinpoint the suspects IP, they ended up getting him with different evidence.

The guest does agree to the rules when they book in VRBO and AirBnb, but in my case, with pools, my Insurance company requires me to have certain verbage along with a signature on that clause to give me the best support in the case of a liability issue.  I feel safer with own digitally signed RA.