All Forum Posts by: Thomas Don

Formerly a PNC bank, has a drive-through. The mall behind it was recently sold, new owners plan to redevelop/improve it. There are also plans for a self-storage facility in the back of the lot. Additionally, the lot has a bowling alley, restaurant, and gym. High-volume road. Personally, I think it would make a great location for a Starbucks (there are no drive-through Starbucks locations for 20-30miles). I'm selling because all my energy is focused on STR's at this point.

https://www.remax.com/pa/east-stroudsburg/home-details/209-s...

Quote from @Pamela Pfeiffer:

I have experienced all of this and then some! Still not regretting my decision to buy. Bought in early 2019 when they could barely give away my chalet!

That being said, I'm new to BiggerPockets and would appreciate if anyone who reads this can recommend a reliable housekeeper/ manager in the Big Bass Lake area(Gouldsboro) Made my first call to a "company" listed here networking to STR owners in the Poconos. A guy answered "Hello" like I woke him up at 1pm. The conversation went downhill from there.

Much appreciate any responses or recommendations.

 Yeah if you bought anything pre 2020 you're basically sitting on a double by now probably. Especially the smaller houses, used to be able to find a lot of them for under 100k now they're all 200+.

I have a management team that I use out there but unfortunately, I can't recommend them because they are closed to new clients and overwhelmed with what they currently manage now. Keep searching make a lot of phone calls and you can eventually find someone probably. 

Also be wary of anyone showing you numbers from 2020/2021 the pandemic inflated occupancy as people fled the city. Also, Scott K is right about off-seasons, even with a great house- mountainviews, sauna, hot tub ect you're lucky if you get more than just the weekends. In general, I would try to avoid HOA's just another mini-bureaucracy you are subject to. Taking on extra regulatory risk anytime you buy in an HOA. But I'm sure plenty of people would disagree with me on the HOA thing.

Quote from @Andi Ndini:

Quote from @Thomas Don:

Quote from @Mark Miles:

Quote from @Mark Bills:

Hi @Scott K.

Out of curiosity what about the Poconos market makes it tough? 

In 2019 there were 10,000 homes for sale in the Poconos. In 2020 and 2021 during the Covid pandemic, folks from Nyc and Philly bought them all up. And they turned about 5,000 of them into Airbnbs. This has caused at least 3 major problems: 1) the market is now oversaturated with Airbnbs, 2) rental rates have come down bc of so much competition, 3) there's a dire shortage of workers available to service the huge increase in the # of Airbnbs.

Wait times are often a month or longer for service providers. I have a friend who needs an electrician & has been waiting a month. He had to cancel all of his reservations until he can get an electrician. Another friend's hot tub has been out of commission for over a month while he awaits a hot tub repairman. He has had to give refunds bc of a non-working hot tub. Another friend needs to renovate his house but can't get anyone to do it, it's brutal.

Plumbers, roofers, lawncare, there's no one available to do this work bc there's waaayyyy too many Airbnbs for the local labor market to support.

Not to mention the dire shortage of cleaners and handymen. Home prices have shot up in the Poconos, there's very few homes for sale, there's bidding wars on the few homes that are for sale, and there's a drastic shortage of available workers. Not an ideal place to run a business but good luck if you wanna try it!

Personally, as someone who lives near the Poconos, I would recommend the mountains of VA, NC, or TN. Or the beaches of NC, SC, GA, FL, AL, MS, or TX. I’ve built quite a little nest egg investing in some of those markets 👍👍

Would have to agree with him. If you enjoy smashing your head against a brick wall to eventually make a higher return then invest in the Poconos. If you value peace of mind and don't mind lower returns just go somewhere else with a functional labor market, lower property taxes, and utility bills that won't make you sick. 

Quick example your heat bill being electric can hit $1,000 in the winter, and your property taxes are probably $500 per month. That's $1500 in expenses in the wintertime months not including a mortgage. There are decent houses renting for only 200-300 a night, many only rent on weekends. I'd imagine a lot of people out there are making no money.

Another personal example is a house across the street from mine that sold for 170k a little over a year ago. The buyers were from NJ. They made it a STR, they didn't put in anything special(no hottub, maybe because hot tubs were six months out when they bought the house). But it was still a nice 4bedroom 3bath, on over an acre, ten minutes to the ski slopes, hiking, ect.They rented most weekends in the summer but beyond that, I didn't notice it rented that much. Now they are trying to sell it, listed two months ago for like 320k, just reduced to 300k. They'll probably get at least 250k for it. But was it a profitable STR? I doubt it, they busted out and now they're trying to flip it.

I'd imagine a lot of people will bust out in the next year or two but it will be not as noticeable because they'll be able to sell at higher prices. The real tough part is when we face a market crash at some point and that house that was bought for 500k can only be sold for 300k. Sounds drastic but prices have tripled out here in a few years. Houses that were 100k in 2017 are 300k+ now. That said if they actually do build the train from NY to here I'd be pretty bullish on the area.

@Thomas Don, every property that I have seen, taxes are between 2500-5000 a year. 

I just started looking up that way.

There is a property in Emerald Lakes. The house is currently a STR through airbnb. I was told that in 2021 it generated 75k in income and had 11k in expenses. Expenses below:

PPL, Internet, Lawn, HOA, Home insurance, Taxes (School, County, Township), Wifi cameras.

I'm missing snow removal and the % withheld from the management company, but when I do my math (even after adding additional expenses like vacancy, repairs, management and snow removal) this property (taking for base the 75k generated in 2021) will cash flow $2100 a month.

AM I MISSING SOMETHING????? Looks too good to be true. I was able to find the property on Airbnb and only had one review. Is he fooling me with the numbers???

Regards,

So I'm in the East Stroudsburg/Stroudsburg area which is one of the highest for property tax I think. My cheapest property is about 3k Property tax+1k HOA. The most expensive one is 12k per year.

Well, how big is the house? What's the asking price? 11k expenses sounds kind of low but anything is possible. Management companies for STR usually take 20-30% of gross income which would bring it down to around 55k income.

Also consider the 2020/2021 numbers to be not the best data. During 2020-2021 the Poconos had a boom of people coming to stay there who wanted to escape NYC during covid ect. As a personal account, there is a creek near my house, it's a mile-long dirt road with little cabins along the creek. During my previous years there all those houses were basically empty, at one point during covid maybe 80-90% of them were occupied. Before that over a three-year period, I had never seen more than maybe 10-20% of those houses occupied.

But that is just an anecdote, AirDNA reported that the Poconos occupancy is down 20% this year so there's actual data as well.

Quote from @Himanshu Agrawal:

@John Geldert or anyone experienced in the area- Thank you for replying to this post, and sharing your input. I am taking a trip today to Poconos, and was wondering if you can provide some guidance: 

1) what areas would you recommend to look at for properties with good STR potential? Also, are most of the areas gated community with HOA or do they have some single family options as well with NO HOA involved.
2) what's the average number of nights(Vacancy factor) that the property in Poconos gets rented for lets assume something with value Add like hot tub or pool, and something basic

3) Avg cost of utilites in the area?

Most houses are in an HOA but there are definitely ones that aren't.

In the off-season which is fall and spring, even with good amenities, you'll probably rent weekends and maybe a little extra so maybe 30-40% occupancy. In the summer/winter should be more like 50-70% occupancy. The problem with the winter is if the snow season is bad you'll also have fewer renters.

I lived in the Poconos for a while, energy costs are up now. But for a 2/3bedroom 1800SF winter months were easily $500 per month. Can be $1000. I'd plan for at least $6,000 per year in utilities for a 2,000sf house. Many places only have electric.

Quote from @Mark Miles:

Quote from @Mark Bills:

Hi @Scott K.

Out of curiosity what about the Poconos market makes it tough? 

In 2019 there were 10,000 homes for sale in the Poconos. In 2020 and 2021 during the Covid pandemic, folks from Nyc and Philly bought them all up. And they turned about 5,000 of them into Airbnbs. This has caused at least 3 major problems: 1) the market is now oversaturated with Airbnbs, 2) rental rates have come down bc of so much competition, 3) there's a dire shortage of workers available to service the huge increase in the # of Airbnbs.

Wait times are often a month or longer for service providers. I have a friend who needs an electrician & has been waiting a month. He had to cancel all of his reservations until he can get an electrician. Another friend's hot tub has been out of commission for over a month while he awaits a hot tub repairman. He has had to give refunds bc of a non-working hot tub. Another friend needs to renovate his house but can't get anyone to do it, it's brutal.

Plumbers, roofers, lawncare, there's no one available to do this work bc there's waaayyyy too many Airbnbs for the local labor market to support.

Not to mention the dire shortage of cleaners and handymen. Home prices have shot up in the Poconos, there's very few homes for sale, there's bidding wars on the few homes that are for sale, and there's a drastic shortage of available workers. Not an ideal place to run a business but good luck if you wanna try it!

Personally, as someone who lives near the Poconos, I would recommend the mountains of VA, NC, or TN. Or the beaches of NC, SC, GA, FL, AL, MS, or TX. I’ve built quite a little nest egg investing in some of those markets 👍👍

Would have to agree with him. If you enjoy smashing your head against a brick wall to eventually make a higher return then invest in the Poconos. If you value peace of mind and don't mind lower returns just go somewhere else with a functional labor market, lower property taxes, and utility bills that won't make you sick. 

Quick example your heat bill being electric can hit $1,000 in the winter, and your property taxes are probably $500 per month. That's $1500 in expenses in the wintertime months not including a mortgage. There are decent houses renting for only 200-300 a night, many only rent on weekends. I'd imagine a lot of people out there are making no money.

Another personal example is a house across the street from mine that sold for 170k a little over a year ago. The buyers were from NJ. They made it a STR, they didn't put in anything special(no hottub, maybe because hot tubs were six months out when they bought the house). But it was still a nice 4bedroom 3bath, on over an acre, ten minutes to the ski slopes, hiking, ect.They rented most weekends in the summer but beyond that, I didn't notice it rented that much. Now they are trying to sell it, listed two months ago for like 320k, just reduced to 300k. They'll probably get at least 250k for it. But was it a profitable STR? I doubt it, they busted out and now they're trying to flip it.

I'd imagine a lot of people will bust out in the next year or two but it will be not as noticeable because they'll be able to sell at higher prices. The real tough part is when we face a market crash at some point and that house that was bought for 500k can only be sold for 300k. Sounds drastic but prices have tripled out here in a few years. Houses that were 100k in 2017 are 300k+ now. That said if they actually do build the train from NY to here I'd be pretty bullish on the area.

A lot of the contractors in the area are unreliable and have alcohol or meth problems. Be careful if it's a decent-sized job.

Just closed on a loan with them, wanted a lot of docs but overall fairly smooth and quick.

Is host financial legitimate? Can't find any reviews.

Thanks to everyone for all the advice so far! Going to start contacting people once I'm back from vacation. 

Some more details on the building- it's a standalone building in a plaza, across from a supermarket on a high traffic road. It used to be a bank so there would definitely need to be some remodeling, it has a drive-through. The plaza isn't the best but there is a bowling alley and gym in the plaza so it has some attractions already and plenty of parking. One negative is the plaza does not have its own traffic light.