All Forum Posts by: Alesandro Breguez

Does anyone have experience with structuring a joint venture or partnership in Scranton/WB area?

Context:I am an accredited investor who struggles with the day-to-day management of rehabs and property management. I wonder what your experience is with partnerships where one party brings the capital to the table and the other party the work/time. Looking forward to hearing your experience, pros and cons.

Hi All, I'm also looking to connect with investors in the Scranton area. I have a few duplexes in the area as well.

Do a careful market research. Basic AirDNA data shows that the supply of listing almost doubled for some areas in the Poconos vs. 2 years ago + houses are 20-30% more expensive. Its becoming a crowded trade..

@Jennifer Soltis @Chase Lowry, Regarding the ''manage yourself'' I would be careful since you are trading your time for the higher returns.

Managing yourself would save you approx. 18k in PM fees, estimating 5h or work per week (dont estimate the headache of STRs) over 50 weeks a year = 250 hours = $72 per hour.

It would depend of your situation, if you are a highly paid professional who makes more than $70/h you might want to reconsider. If you are happy with this hourly rate, then Chase might have a point and it would be worth it to self manage...

@Maria Ferre, we have a portfolio of STR properties in the Poconos. My recommendation is to consider multiple criteria in your decision:

1. Financials: Mostly COC return (NOI/initial investment)

2. Local presence: location that you can access directly and self manage - unless you want to leave 20-25% of the bookings for property managers that might (or not) be reliable

3. Regulatory landscape: especially HOAs and Townships - these can be a deal breaker and shut your business

4. Potential STR growth: AirDNA might help with some stats and figures

This is NOT a passive investment, it requires sometimes intensive management work

It looks like that the STR market in the Poconos is ''normalizing'' now, there was a spike in the demand in 2020 after the STR ban was lifted and this summer was very busy as well. HOWEVER, there was also a surge in the supply of listings (+25% in Q1 2021) that seems to be balancing the market again.

Sept has been a bit slow. What are your views and takeaways?

@Peter Amendola, Evolve does not provide full service property management, they market your property in multiple listings and take a 10% cut - not really an advantage for homeowners since you can do the multiple market listings with other platforms as iGMS.

My experience with Evolve is that they price the property very low, on average 50% of its should-be price. Financially it never made sense to me to list with Evolve..

@Yahav B., its an overall issue for all homeowners to identify reliable labor. My recommendation is 1. Make sure to make a background and reference check prior to starting ; 2. always have a contract in place with your handyman with strong liability language; 3. Test him first prior to assigning to larger projects; 4. triangulate the information with a 2nd local person to check the work that was performed. My experience, every you can find 1 reliable handyman out of 5 attempts..

It will be a bumpy road while going through the regulations. Some townships passed investor friendly regulations but the second layer of ''regulators'' are the HOAs. I know that some are restricting the STRs for minim 2 weeks stay and other HOAs in the area completely banned it. HOAs might pose a higher risk for investors  than the Townships.. 

@William Beck, good summary. I have a small portfolio of STR properties in the Poconos and I can see already the difference in the market dynamics of supply vs. demand. On the supply side, there is a surge of approx. 25% of new listings since Q1 2021 driven by the new investors coming to the area and higher real estate buyer demand (due to liquidity and low rates). On the demand side, summer is busy but not nearly as busy as last summer as many people already took the 2nd dose and would rather take a plane to so somewhere else. Still a good market, but very challenging to operate if you dont have a very strong local team.

Looks like that this post and thread saved you from doing a wrong deal :)