All Forum Posts by: Alex S.

I'm trying to analyze a property and my CoC for the first year is 10%.

My cash invested is 100k (Downpayment + closing costs + rehab) and my cash flow is 10k for the first year.

Let's say I calculated that my cashflow for the second year is 12k

How can I properly account for the second year, taking into account the future value of money?

ps: I'm aware that internal rate of return (IRR) can help me estimate that but it assumes the whole value of the property (equity), while I want to exclude equity from the equation, as I'm not going to either sell or refinance the property in the first few years for sure and thus want to analyze cash on cash year over year for the first few years only.

Is there still a QB perk? Can't find it in the list:

https://www.biggerpockets.com/perks/pro

After checking a few properties suitable for STR in the Las Vegas metro area, I found that quite a few of them generate acceptable returns (15-25% CoC). As an example, I was running numbers for this property, it's grossing 80k yearly, and with an acceptable asking price of 420k, my potential returns are 16% CoC. The neighborhood seems to be good:

https://www.redfin.com/NV/Las-Vegas/5077-Stampa-Ave-89146/ho...

I know there are some STR limitations to consider like hotel proximity, but other than that, is it a good market for STR in general, and in terms of regulations, extra taxes, and anything else needs to take into account?

Thanks for the insight, Timothy! Let me reach out to you via messages and discuss specific multi-unit options.

Thanks for the detailed responses, this is very insightful, glad I found someone doing STRs in Anchorage!

#1. AirDNA provides yearly revenue, taking into account occupancy and different rates based on a season. It calculates 110k-120k per year, so the average is 10-11k (it includes different rates and different occupancy) thought-out the year.

I think 2023 revenue is down because 2021-2022 are not normal years, and were producing more STR revenue.

#2, #3 great insights into the average group and demographics, thanks!

From what I can see, a small multiplex with a mix of MTR+STR+LTR would work the best taking into account high seasonality, group size, and demographics. This is very helpful, thanks!

> I wouldn't pay for Rentometer. They will let you look up a few properties for free. This will give you an okay baseline of what others are charging, but does not give you any context regarding the amenities or renovations.
> Instead, you should try the Bigger Pockets has options under "Tools", "Calculators", then "Rent Estimator".

I don't think that BiggerPocket's rent estimator tool is any different from Rentometer, as they both use comparable and they both don't look inside of the property, they both don't know if the property has granite countertops or cheap plastic.

Whichever tool you use, I would start with that, to pick comparables, and then click through photos for each comp and confirm if it's a good comp, and if not - adjust the comp rent price accordingly. 

If this first pass works in terms of numbers, and the rest works too, I would contact local property managers (Google some for your area) and ask them about rents in the area for your particular property, and also ask them to run an analysis and share estimated rent for your target, I would do that once I get a property under contract to avoid doing extra work for properties I cannot even get.

> My question is, what is the best way to accurately predict expenses such as utilities, insurance and capex?

To precisely estimate expenses, you want to actually connect with the service providers and ask about their costs. Some of the utilities are based on usage (electricity, water) so in this case, you can either go with average usage or connect with the seller agent and request recent utility bills to confirm that. For the rest of the expenses, I personally follow Scott's approach to use avg percentage for CapEx/Maintenance/PM/Vacancy (5,5,10,5) or similar depending on the property condition.

I live in WA but started to look out of state for that same reason. Although finding a cash-flowing property (if that is the only criteria you have) is not that hard, you just need to look away from bigger cities, e.g. Aberdeen, WA, specifically find places where avg home prices are low (around 150k-200k) and rents are close to 1% of the purchase price. Just a random on-market pick as an example (I didn't analyse the neighborhood and didn't do the regular due diligence, just a random pick to find a cashflowing property in WA):

https://www.redfin.com/WA/Aberdeen/716-E-1st-St-98520/home/1...

This house sits on-market for quite some time, so you probably can find a similar one and buy it deep, even with a slight discount you can see that CoC start to go above avg index stock returns:

I found a few SFR properties in Anchorage, AK that will cashflow as STR and wondering if it's a good market to invest in. Even taking into account high occupancy during the season and low occupancy during the off-season (avg occupancy 60%):

https://www.redfin.com/AK/Anchorage/2100-North-Star-St-99503...

- Purchase price: 600k

- Strategy: STR (5b4b 14 guests)

- STR income: 132.6k (Aridna data) / 11.05k monthly

- CoC: 17.5%

Here is another example, just a random on-market deal where number works:

https://www.redfin.com/AK/Anchorage/3640-Chiniak-Bay-Dr-9951...

- Purchase price: 550k

- Strategy: STR (5b2.5b 14 guests)

- STR income: 124k / 10.3k monthly

- CoC: 19.79%

Alternatively, I discovered a few small multifamily properties with a mix of LTR+MTR+STR to help with occupancy optimization, and I can see that on-market 4-plexes like this one with a cost of around 600k will cashflow and gross a similar 110k-120k yearly.

I see that population growth slowed down, and maintenance/utilities should be much higher due to harsh winters. 

Does anyone here invest in this market?  

Do I miss something in the analysis of the deal?

Seems to be no interest, still a data point for me 🙏