All Forum Posts by: Tim Bergstrom

This thread is super interesting! @Bryan Clement I've also been considering this strategy for a time now as well for similar reasons. I'm still in the data gathering stage of this. I have two STRs here Nashville that I own, so I have some experience under my belt at this point. But I can empathize with your line of thinking! Thanks for starting this discussion!

I appreciate the more conservative approaches of @Paul Sandhu and @Luke Carl. Their models seem to work really well and with their experience they have good insight!

One thought or element to this whole thing that I've been thinking of and would love to add to this discussion is cutting in the landlord on a percentage of the net profit that the STR would produce. In my mind that would provide more incentive for the landlord to not cut you out and to also enjoy added cashflow at no extra cost to him/her. From what I've read/researched, it seems to me that since there are people doing this successfully its a matter of which landlords you choose to work with, being up front with them, and how you pitch it to them that makes or breaks success with this model? What would be anyone's thoughts in adding that kind of element? This way when the STR listing has a great month, both the landlord and you the operator get to enjoy the benefits. Everybody wins.

Even though I'm interested in this model, I'm still looking to buy properties that would work well as STRs and would also love to help other investors who want to get in on the Nashville STR market! To that point @Steve Frye your comment was very informative! Thanks for the info you shared there. Gonna put that info in my tool kit!

Hey @Dave Kirby, all these guys seem to have good info in the Florida and Gulf Shores areas (which seems great!). Like some of the other guy's responses I don't know of a marketplace specifically for STRs, but I do know of a lot of opportunities and have a great and growing network of resources for STRs here in Nashville. If you'd like to chat at all about that let me know!

Hey @Michael Weisman, good on you for posting and asking about this on here! Definitely doesn't sound like you're  a rookie. @Luke Carl and @Luka Milicevic are both very knowledgable about STRs here in Tennessee. I have a couple myself as well. One owner-occupied, another non-owner occupied. I don't have the same level of experience as Luka in needing to go to court and those types of things, but I too have been down the road of getting the proper permits, going to the codes office and all that racket and I agree with him in that if the property is not zoned as a designated "non-owner occupied" zoning type (which you can find here: https://www.nashville.gov/Codes-Administration/Sho...) I would definitely not try to run operate it as a "kind of" owner occupied. Especially if you are just his partner. Not to mention that the more "attractive/marketable" STRs will be closer to downtown than that.

If you are interested in still finding an STR here in Nashville I'd love to help. Like Luka I also have resources for finding STRs/management/set up/cleaning/permitting and all that. But you're in great hands with Luka too!

@Brian Garlington Lol! Awesome

@David Waddleton I grew up in Indianapolis. I actually spent some time in LA myself for almost 4 years so I get it! I currently live in Nashville but am looking into Indy for similar reasons to you. I have recently been investigating Indy more and more and starting to develop relationships there. I also have some things happening in Memphis. DM me if you’d like to chat more and I’d be happy to share my experience with you!

Hey @Anne Williams, here's my two cents.

What I always tell people who are buying a place to live in is to have a list of "must haves" in the property. Then have a list of "would be nice to haves". Unless this property has everything on your "must have" list, then don't even consider it. So that is the first question you have to ask yourself is "does this property have what I need it to have?"

That being said I agree with a lot of what other people have said in this thread. If your agent is well seasoned and has a really good handle on what is happening in your particular market, then maybe that could be a viable strategy based on what he/she has done in previous deals. But in my personal opinion I think making an offer over asking price is generally a bad idea and should really only happen if:

1. It is incredibly common for properties in your area to go for over asking

2. you are confident it will still appraise

or

3. you are comfortable with and ready to compensate the difference between the appraised value and your offered amount in your down payment

I don't think hoping the appraisal will come in low so you can negotiate down after the fact is a solid strategy or a strong starting position. There are a lot of moving parts and elements that are out of your control in that scenario as other people have eluded to in their responses here. If the seller isn't willing to negotiate you'll have spent a lot of time on this you can't get back and not to mention the $$ for the appraisal and inspections and all that.

But really I think it comes down to this:

1. how much you REALLY want this property. 

2. can you afford it if you do have to end up "overpaying" for it (and perhaps you've already run these numbers and already know the answer)

3. Are you comfortable buying a property for more than what it appraised for in a market where it is possible that we could be pretty close to the top of the bubble.

This is a long response but you said yourself that you don't think its worth what they're asking for it based on the data you've seen. Also what I tell people is that there WILL be other properties if this one isn't it. This isn't the last property that will ever be sold or be available to you. So in short, I agree with everyone else who has responded in saying that overpaying for a property is a bad idea, or even offering to overpay in hopes of having a negotiating point later.

I'd say wait and be patient to put yourself in a stronger and more stable position where everyone can win.

Hey BP I’m looking for a trustworthy recommendation. I’m looking into the Indianapolis market to start getting info on where to possible start doing flips. If anyone has a recommendation of a great Agent who has experience with flips and has a good handle on what is happening around town I have a few questions old love to ask. Thanks! Cheers, -Tim

@Benjamin Vail yeah that is the consensus I've gathered with the Nashville STR climate too. But things are going well thus far for my properties! And I know they're going well for some other investor friends of mine.

And thanks for that info! I'm checking out your website now and would love to chat with you more about the Indy market.

There's some really good conversation/discussion happening in this thread. Thanks everyone for posting/sharing. I've learned a lot/had good insight to other perspectives and thoughts from reading through this.

@Benjamin Vail That's awesome news! I have a couple STRs down here in Nashville and the ever evolving regulations have a lot of people looking over their shoulder down here/always waiting for a shoe to drop. So great to be in a city where it seems like you can now have some peace of mind about the STR operations! I'd love to hear more about your management company. I know you said your company is Housepitality, but do you have a website? And I'd love to know what the STR traffic is like there and more about your Indy efforts.