My New Strategy for Starting out!?

[Joseph Umberto]

I thought my first deal strategy was to get a MFH with a FHA, and do a house hack. Now I have my dad as a partner and he will loan me half of the 20% down + closing costs to get into the deal. We learned that STR- Airbnb specifically, could earn double NOI. It appears a single family property for ~$100-125k could bring in roughly $30k in NOI on a short term rental in desirable FL areas, and based on rent prices in the area it would be half that NOI for a 12 month tenant. This seems like the best approach for example a condo/townhome in FL because you can find low purchase prices, as in a comparable growth market like the Carolinas or TX.

Does anyone have experience with starting out in short term rentals like this vs. MFH? What are we missing that doesn't make this the best option for starting out? What made it a good/bad deal? Did Airbnb turn out to be cash flowable every month or volatile?  If you did remote investing was it manageable over the phone/computer for the most part, with a local property manager? Is 20% conventional the only loan type for this? After year 1 we want to get into a 2nd property.

[Joe Vairo]

I was in the same boat. I wanted to do a triplex or quadplex, but the cash flow of that vs a STR wasn't even close. I ended up going with a STR for the first one because the cash flow was that much better.

It made it a better deal for us because we can still use it occasionally when we travel to the area but still make plenty of money to cash flow more than that of buying a triplex or a quadplex.

In the end it really comes down to what are your goals for the first property. Do you want to have a long term tenant and more peace of mind while have a little bit less cash flow. Or are you willing to be a little bit more risky and go times without a tenant but have the ability to make more cash flow per month. With the STR’s you will have big months bringing in more money then you will have slower months in the off-season as well.

The 20% down isn’t the only type of loan you can use, there are possibilities To put less Down, if you use it as a second home/vacation home.