All Forum Posts by: Yash Bhatt

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $925,000
Cash invested: $75,000
Sale price: $1,190,000

Bought and styled and managed a luxury Airbnb in Scottsdale.

What made you interested in investing in this type of deal?

The income potential for STR

How did you find this deal and how did you negotiate it?

Found on Zillow by researching the area and income trends for STRs

How did you finance this deal?

Conventional financing

How did you add value to the deal?

Upgraded the backyard and re-styled and provided high end furnished to the home

What was the outcome?

Had excellent success self-managing as an Airbnb in the winter months and switching to a mid-term rental the summer months.

Lessons learned? Challenges?

I learned a lot about managing an STR, specifically with revenue management and guest messaging. I also learned about what to look for and how to use data to style a home for the purposes of a STR. Challenges we faced were dealing with the slow summer months so we decided to pivot to mid term rentals and did very well!

Caveat: I'm not familiar with rules regarding STRs in Seattle.

In general, we are seeing more vacancies in STRs but of course this is market dependent. There are probably many homes that do have more vacancy now than before. You can go on airdna and click around those neighborhoods to see how homes are doing. Also, when there are downturns, the high performing homes will still do well but the lower performing homes will remain vacant. There are probably still many homes doing very well but they are likely ones with very good reviews, something unique, lots of amenities, etc...

Try to find homes with calendars that are more full and do a deeper dive to see what they offer. You will probably see some trends (like homes with pools in Phoenix, homes with a view in a resort destination, etc...)

Quote from @Chase Puckett:

Now that denver doesn't allow STR on non primary homes, what are you guys? I have been running mine as a MTR and it is performing well but not as good as STR. Any advice helps.

What are the rules for MTR? We ran an MTR last year in Phoenix and it ended up out-performing the STR projections. There are definitely strategies to maximize revenue as an MTR, such as:

1) Make sure you have good design and specific amenities that people staying longer than a few weeks would want. A lot of MTRs or longer term furnished rentals are just not very nice usually.
2) call a bunch of relocation companies and partner with them so that families who need temp housing due to repairs happening in their house can be relocated to yours. The insurance company will front the money and they usually pay really well. One example is ALE solutions.
3) list on places like furnished finder to target traveling doctors and nurses. You can also find the placement agencies for your nearby hospitals and tell them you have a furnished rental available. Make sure you have amenities that a traveling provider who might be working night shifts would want like access to good coffee and black out shades. 
4) check out your competition on Zillow and furnished finder and make sure your rental stands out and offer some unique amenities. 

 
these are just a few ideas. MTRs can do really well when run properly!

Cheers,
Yash

Hi,

We bought and rehabbed a home and it's been active as a short term rental for almost a year now in Sedona, AZ. We are looking to pull some cash out to recover our rehab costs and having a hard time finding a solution. We secured a 3.5% loan so we would like to avoid doing a cash out refinance. Ideally, we were looking to see if a private investor would do a 2nd position mortgage or HELOC.

loan balance is 740k

house would appraise between 1.3-1.4 million

We would like to pull out 200k

willing to discuss all creative options.

Thanks for considering! 

Yash

Hi,

we recently put 2 properties in the Joshua Tree market. There is a lot I would share. First of all, Yucca Valley is heavily restricting permits and they have a cap on them. Max occupancy is 8 and higher than that requires special consideration. Also, there is heavy saturation and our PM has told us the projections are significantly lower than they were 6 months ago. Joshua Tree is similar but with different rules. Definitely more last minute bookings and also lower ADRs. You can still make it work but definitely need the right property. It's tricky for sure. If you have other markets you're looking at I would also consider those. Now, that being said there are a few properties with a pool on sale for a decent price since they're not selling quickly anymore. I'd highly recommend a pool as it significantly increases ADRs, in some cases almost 1.5x to double. I'd also make sure the property is unique and not a cookie cutter home.

We have an amazing agent we used in the area who is very familiar with STRs. I can DM you his info if you need. Happy to discuss more as well. 

I'm also a Phoenix investor who owns a few airbnbs. The market has definitely become more saturated but there are some great deals out there right now.

I think the issue with building is it will probably take twice as long and go 30 to 40% above budget right now. We don't know what the short term rental market will be like in a year with potentially more restrictions or changes, so just keep that in mind with new builds.

If you're able to find a ready to go property with an owner who's selling undermarket value, that might be better right now. The peak season is here and you could capitalize on super bowl and high bookings in March and April. We usually convert to midterm rentals in the summer months and it works very well. Let me know if you want to discuss more.

The trick is getting approved for a large enough amount to cover the entire furnishing. You could open credit cards at the stores you're buying furniture from, but if you're doing a large house it may be 50 to 60 thousand dollars which is hard to get approved on a card. Some stores may do it for a higher finance charge, or you can get creative and do a mixture of cards from different stores. You could also apply for a business line of credit which is usually a larger amount and use that. Or multiple business credit cards... 

Quote from @Yash Bhatt:

Quote from @Tiffany Cohen:

Quote from @Yash Bhatt:

Quote from @Michael Baum:

Nah! Scenic pics are great! You have all the house photos first, then the extra surrounding area pics. Works well that way. More pics isn't really a bad thing. Really helps sell the area and let's guests know exactly what they are getting.

I would also add some snowy pics when it hits up there. Really adds to the overall feel of the place. 

I'd say I agree if the extras are at the end. But I would make sure all the featured ones are first. I think I saw a hot tub photo buried deep in the photo set. I would move that earlier.

just like a house listing, most people aren't going to scroll through that many photos initially as they decide to book your place. Just make sure any photos that are deeper in the photo set shouldn't be more of a feature photo earlier. 

Yes agree I should move some photos up. What would you suggest being my top 5 hero photos? Upper deck, living room, hot tub and…

 I like photos 1, 4, 11, 13, 53

I would say when selecting them, look at your competition. See what properties in your areas are booked a lot and what amenities they offer and make sure your photos offer the same or more. If you have something that stands out I would definitely showcase that. I also like photos that show big open spaces and photos with views. Someone had mentioned in a video once that they like picking photos that have some sort of feature in it that requires the person to click on your property to see more. 

 Also you can try an ad campaign on Instagram with the top 10 photos as individual posts and see which ones generate the most clicks. 

Quote from @Tiffany Cohen:

Quote from @Yash Bhatt:

Quote from @Michael Baum:

Nah! Scenic pics are great! You have all the house photos first, then the extra surrounding area pics. Works well that way. More pics isn't really a bad thing. Really helps sell the area and let's guests know exactly what they are getting.

I would also add some snowy pics when it hits up there. Really adds to the overall feel of the place. 

I'd say I agree if the extras are at the end. But I would make sure all the featured ones are first. I think I saw a hot tub photo buried deep in the photo set. I would move that earlier.

just like a house listing, most people aren't going to scroll through that many photos initially as they decide to book your place. Just make sure any photos that are deeper in the photo set shouldn't be more of a feature photo earlier. 

Yes agree I should move some photos up. What would you suggest being my top 5 hero photos? Upper deck, living room, hot tub and…

 I like photos 1, 4, 11, 13, 53

I would say when selecting them, look at your competition. See what properties in your areas are booked a lot and what amenities they offer and make sure your photos offer the same or more. If you have something that stands out I would definitely showcase that. I also like photos that show big open spaces and photos with views. Someone had mentioned in a video once that they like picking photos that have some sort of feature in it that requires the person to click on your property to see more. 

Quote from @Michael Baum:

Nah! Scenic pics are great! You have all the house photos first, then the extra surrounding area pics. Works well that way. More pics isn't really a bad thing. Really helps sell the area and let's guests know exactly what they are getting.

I would also add some snowy pics when it hits up there. Really adds to the overall feel of the place. 

I'd say I agree if the extras are at the end. But I would make sure all the featured ones are first. I think I saw a hot tub photo buried deep in the photo set. I would move that earlier.

just like a house listing, most people aren't going to scroll through that many photos initially as they decide to book your place. Just make sure any photos that are deeper in the photo set shouldn't be more of a feature photo earlier.