First STR with $100k or less?

[Jayme B.]

I've been back and forth on the idea of using our savings to invest in a STR. I've read how it has changed people's lives, but have been super apprehensive seeing how saturated the STR market has become since 2020. I work for myself, have a small kid and one on the way. My wife and I are ready to do something different to replace my income. However, this is a situation where I need to be right the first time. I'd say being right means cash flowing at least 3k per month. Now how do I get to that point and what market to do that? I have no idea.

I thought about purchasing a property using owner finance option and using our savings to build a smaller home. The plan is to use the cash flow to pay the land off. 

It seemed like the only option. With interest rates being high, it seems ridiculously dumb to purchase an existing home in this market.

Am I missing something? Seems like another case of dollar short, day late.

[James Hamling]

You need to take a step back @Jayme B., because I hear you asking the wrong questions, and with the wrong focus. 

First you need to decide if your going to INVEST that capital, or Launch a Business with it. And yes, these are 2 very different directions. 

STR is a BUSINESS. Yes, it has a component of Real Estate, but it is NOT Real Estate Investing, it is HOSPITALITY business. The "STR Trail" is strewn with graves marked "I thought it would be easy" and "but the books said". NOT everyone can do it CORRECTLY, well, proficiently, profitably. Problem is many get confused for fact any can do it, with any can do it PROFITABLY, which no, MOST don't. Just look-up AirBnB, look at all the janky places, charging near to nothing, with few to little bookings, and then that "one" jumps out that's booked solid. Now think, that's ONLY those failing now, today, that's not the grave-yard of those who already failed.

STR is a HOSPITALITY Business, and coming into it with anything less than a focus on building a Hospitality business is planning to fail.

And that whole needing a 4-sure homerun hit out the gate, STOP, that does not exist in a startup business of any kind more or less a hospitality business which is one of the single most competitive in existence. 

You want assurances, INVEST via a Pro. Yeah, it means lower returns, but that comes with safety. You don't know, so put your $ with someone who DOES. It's just that simple. And than learn from the experience until you grow your knowledge base to be empowered to do something on your own. Book smart is still only book smart and trust me, once in the trenches, with your $ on the line, yeah things are a whole lot different. 

This $3k mnthly cash-flow off $100k, not realistic. Not to start, with low risk etc.. Reward and Risk are a married couple, you don't get more of one without more of the other.