Validating Rabbu and AirDNA data for N Myrtle Beach/Cherry Grove

[Cody Lewis]

My wife and I are looking for our first STR property in N Myrtle Beach/Cherry Grove. We're looking for 3+ bed/3+ bath in the area, and I'm having a hard time validating the numbers I'm seeing on both Rabbu and AirDNA.

Does anyone have any experience in that area or own a STR that could help us validate what we're in that area? Being our first STR, I don't want to over shoot the numbers.

[Andrew Steffens]

Hey Cody are you using the premium version of AirDNA which shows you the comps and their performance?

[Cody Lewis]

Not at this point, I have in the past trying to use the Enemy Method. At this point I'm trying to get an idea of general gross revenue for 4/3s in the area.

[Nathan M kiefer]

we own two stilt houses in ocean lakes- there are a lot of variables- what specfically are you looking at- house, condo etc etc?

our two houses are 4/4's and average around 74-80k per year each gross. we are at a 50% return but have little to no leverage. most that finance are happy to break even and have a vacation home.

its really about the skin you want in the game. if your insulated and have a ton of revenue finance away, all my deals stand on their own, we have 20 properties and there are a lot of people that will leverage and leverage to have "100 doors" but id rather have 30k in income coming with 4k leverage in a month vs 100k and leveraged for 80k a month.

bottom line in myrtle- n,s or otherwise- great market the more cash you have down the more you will enjoy it. if your a large investor and dont mind a bunch of pressure and thats your game more power to you as well.

[Michael Baum]

Hey @Cody Lewis, do you have some examples of your numbers?

Post the deals you are researching and maybe we can drill down a bit more rather than generalize.

[John Underwood]

Quote from @Cody Lewis:

Not at this point, I have in the past trying to use the Enemy Method. At this point I'm trying to get an idea of general gross revenue for 4/3s in the area.

Why is the enemy method not working?
Are you not finding enough similar properties? 

[Cody Lewis]

Quote from @Michael Baum:

Hey @Cody Lewis, do you have some examples of your numbers?

Post the deals you are researching and maybe we can drill down a bit more rather than generalize.

 The house we're looking at is around $800k in N Myrtle/Cherry Grove. We have a private finance that will do 12% down @ 5% over 30 years (we'll look to refi them out after 3 years). 

Rabbu, AirDNA, and Awning all put gross revenue in the ballpark of $94k-$105k for 4/3's in that area. FWIW, the property is 1 block off the ocean with room for a pool. Based on what I've read on this forum, following Avery on YouTube, and others, that type of gross "should" work. I'm trying to validate the gross in the area at this point.

[Cody Lewis]

Quote from @John Underwood:

Quote from @Cody Lewis:

Not at this point, I have in the past trying to use the Enemy Method. At this point I'm trying to get an idea of general gross revenue for 4/3s in the area.

Why is the enemy method not working?
Are you not finding enough similar properties? 

It works, we just stopped paying for AirDNA for a bit. There aren't many properties popping up on a regular basis and I tried to keep records of neighboring STR in the areas we looked.

[Nathan M kiefer]

Quote from @Cody Lewis:

Quote from @Michael Baum:

Hey @Cody Lewis, do you have some examples of your numbers?

Post the deals you are researching and maybe we can drill down a bit more rather than generalize.

 The house we're looking at is around $800k in N Myrtle/Cherry Grove. We have a private finance that will do 12% down @ 5% over 30 years (we'll look to refi them out after 3 years). 

Rabbu, AirDNA, and Awning all put gross revenue in the ballpark of $94k-$105k for 4/3's in that area. FWIW, the property is 1 block off the ocean with room for a pool. Based on what I've read on this forum, following Avery on YouTube, and others, that type of gross "should" work. I'm trying to validate the gross in the area at this point.

 in my opinion, you will be a break even with that finance(good rate but?)- probably a good investment but not for cash flow. you are looking at a $3800 payment and 650k in interest on life of the loan, if there is another end game for refi, rollover, cash injection etc. to make it cash flow better then maybe. 

Personally, based on this limited info the deal needs at least 20% in to make it viable for the ebb and flow in str market longevity.

[Michael Weigum]

Hi @Cody Lewis

I'm an investor and a realtor in Myrtle Beach. I'd be happy to help with your numbers. I own oceanfront properties here and have the data for them. 

[Sarah Kensinger]

The enemy method is very hard to use unless your validating info, you received from a real time data pulling software. As you know, you can't pull the occupancy and revenue of a property from the listing, especially with such short lead booking time right now. Unfortunately, many people have gotten in trouble running numbers for a STR that way. If you're still looking for someone to connect with, send me a DM and I can link you up with someone in our STR mastermind that operates there.

[Michael Baum]

Hey @Cody Lewis, like @Nathan M kiefer said, you are right on the edge.

The interest rate is pretty good and the down is low which is good.

Are you prepared to eat some negative flow from time to time? Will you have a decent reserve in place to absorb that? Are you looking to have use of it from time to time for vacationing?

If you are going to use it regularly yourself and are OK with it breaking even most of the time, then it might be OK.

As a pure investment, cash flowing property, then it is too risky IMHO.

[Cody Lewis]

Quote from @Michael Baum:

Hey @Cody Lewis, like @Nathan M kiefer said, you are right on the edge.

The interest rate is pretty good and the down is low which is good.

Are you prepared to eat some negative flow from time to time? Will you have a decent reserve in place to absorb that? Are you looking to have use of it from time to time for vacationing?

If you are going to use it regularly yourself and are OK with it breaking even most of the time, then it might be OK.

As a pure investment, cash flowing property, then it is too risky IMHO.

We are looking to run it as a full time STR, invest opportunity only. I'm using the ShortTermShop's calculator but maybe I'm under estimating my expenses. Supposing $94k in gross these are my "projected expenses". 5% rate, ~12% down, closing cost $7,000 (low b/c of private financing and my wife is an SC real estate attorney).

Help me poke holes in what I'm missing. Happy to be wrong.

[Chris Rosenberg]

Hey @Cody Lewis welcome to the MB market. From your numbers it seems like you may be underestimating property taxes. For an $800k house you may need to multiply that monthly property tax number by 5. The sale will trigger a reassessment.  Also, make sure you get actual insurance and flood insurance quotes for the target property. Cherry Grove has a lot of flooding. And don’t forget the 3% hospitality tax. Hope this helps and good luck in your investment!

[Cody Lewis]

Quote from @Chris Rosenberg:

Hey @Cody Lewis welcome to the MB market. From your numbers it seems like you may be underestimating property taxes. For an $800k house you may need to multiply that monthly property tax number by 5. The sale will trigger a reassessment.  Also, make sure you get actual insurance and flood insurance quotes for the target property. Cherry Grove has a lot of flooding. And don’t forget the 3% hospitality tax. Hope this helps and good luck in your investment!

Those are good reminders! Thank you.

[Nathan M kiefer]

@Cody Lewis is correct.

str cleaning fees aren't even close- if a str on a low average with linen and cleaning service you will be 1k a month easy- average. if you can turn a month with 4 weekly cleanings in a 800k house with linens for $300- hook me up with that cleaner but honestly id be scared if em....

[Brooklyn McCarty]

You never want to use just one set of numbers. You want a collection of them so that you can average them together for a better, more rounded number. 

I would suggest using both Rabbu and AirDNA, plus other sources like Pricelabs, STR Insights, and of course - The enemy method. This is a great tool to use. Also having a agent who specializes in STR's and who knows the market and the area really well is very important.

[Myrtle Mike Thompson]

@Cody Lewis quick math on property taxes here is Purchase Price X 0.0137.  So for an $800k property you're looking at $800,000 X 0.0137 = $10,960/year.  Not an exact science but this will give you a good conservative estimate.  I have a client who bought in North Myrtle Beach earlier this year for $788k and his 2023 tax bill is $10,845.89.  You'll also want to budget at least a few hundred dollars each year for "Personal Property" taxes, which is assessed based on your stated value of all the items inside the property available to your guests... furniture, appliances, televisions, etc.

[Richard Elvin]

@Cody Lewis I researched Myrtle beach as one of my possible markets and looked at whom I would use as a realtor as part of the research. I would take the time to chat with one or both of @Michael Weigum or @Myrtle Mike Thompson. Both of those two seem to really have a handle on the Myrtle beach area. Lots of other great advice here also, but less specific to your area. 

[Cody Lewis]

Quote from @Richard Elvin:

@Cody Lewis I researched Myrtle beach as one of my possible markets and looked at whom I would use as a realtor as part of the research. I would take the time to chat with one or both of @Michael Weigum or @Myrtle Mike Thompson. Both of those two seem to really have a handle on the Myrtle beach area. Lots of other great advice here also, but less specific to your area. 

Meeting up with @Myrtle Mike Thompson next week!

@Myrtle Mike Thompsonundefined