Introduction and Short Term Rental Question

[Bill Olivent]

Hello everyone,

I just posted my first question on one of the forums and figured I needed to introduce myself to the BP community. I’m new to BP and real estate investing in general. My wife and I recently moved to Santa Fe, NM and are looking to begin our journey into real estate in this area. We are from Austin, TX and relocated to Santa Fe to improve our quality of life for ourselves and two small children.

I work full time at a design-build architecture company in Santa Fe and have nearly 20 years of experience working in high-end residential construction and design. My wife is a licensed architect with nearly a decade of experience in multifamily design. Although I have a construction background, I have decided not to personally rehab properties. Running a job site and managing sub-contractors is hard work, so be kind to your contractors.

We're working on finding our first deal but technically it's our 2nd. We sold our 3/2 house in Austin after renovating it for 4 years. It was a foreclosure we bought secondhand off the MLS and was in terrible shape. After a long fairly extensive rehab we sold it for 2x plus what we paid for it. Lots of sweat equity and late nights. It was tough because we "house hacked" the project and lived there during construction with two small kids. But, financially it was worth it. Now that we have some equity built up we're looking to invest in either single-family or small multifamily, as short-term rentals. We are weighing the pros and cons of either SF or MF with regards to short-term rentals. Does anyone have any input on this specific topic? Your help would be very welcome.

Also, your suggestions for investor-focused contractors, realtors, and property managers in Santa Fe and Albuquerque, NM would be appreciated.

Thanks everyone, looking forward to learning more and getting our 1st (2nd…) deal underway.

[Bobby Mcgrail]

Due to incredibly low property tax rates, Santa Fe has become an attractive place for HNW to hold assets in real estate form with low carry costs. 

There are entire neighborhoods in more affluent areas that have very few full time residents, and the properties are not rented or Airbnb’s. They are diversification properties and 5th, 6th homes etc. 

Funny enough most of these ghost neighborhoods are usually predominantly owned by Californians and Texans.  

Santa Fe has very low supply, and without knowing more about your price range it’s difficult to say. 

But if you’re having difficulty affording now, your realtor is likely incorrect that prices will drop significantly with interest rates. Demand is too high, far too much of the property value was already being bought cash prior to low interest rates, and it is a historic capitol city after all. 

Overall macro US trends don’t really apply here. The high minimum wage forced out a lot of first time home buyers as those homes are now rentals for 4-5 coffee baristas etc. (check k-12 enrollment rate declines pre-covid). It’s become popular for middle class families to work in Santa Fe and live in Albuquerque or Rio Rancho while commuting on the train. 

If you’re looking for affordable family housing, on the south side there are some decent neighborhoods in the $350k+ range, but it’s not exactly “Santa Fe” to out of towners, and don’t expect a yard.