All Forum Posts by: Alex Scattareggia

Small little anecdotal story. 
We took my daughters to a Taylor Swift concert in Houston this April and were shocked at the lack of quality options in an around the city. This was obviously an incredibly busy weekend, but I poked around, and it seemed like there weren't as many options as I would have thought from a regulation friendly big city like Houston. 

Anyhow cheers and good luck!

Atlanta looks better from the list you´ve compiled so far but a couple of additional things to consider:

If you have to pivot out of STR which LTR market is stronger or has the best chance of being profitable?

Market saturation in the STR space for each locale

Tourism numbers over the last 5 years (and I would generally exclude 2020/2021 because of the abnormal covid slump and subsequent bump).  When we are analyzing a new destination, I want to see year over year growth over a consistent amount of time. 

We qualify for the program and do a significant amount of business through Booking already.  I am a little bit leery of anything that adds fees, but Booking does seem to deliver some value through their programs, so I am torn.  Any insight would be greatly appreciated. 

@John Underwood do you mind elaborating on the verbiage of how you would propose the 2nd mortgage for DP part?  

AirDNA is still getting around 85% of its data from scraping AirBnb and VRBO listings.  And while they are trying to balance that by getting numbers directly from PMs and operators, this information represents a tiny fraction of the listed STRs compared to what they get from scraping the two big OTA´s.  So the data is always going to be a little bit off.  We do about 40% of our revenue across all properties from non AirBnb and VRBO sources, including direct booking.  Because this is not in the data set that DNA collects it won't be reflected in their #S.  

Figuring out the numbers on comps requires a little detective work putting together the clues. You will find the closest thing to the truth by looking at various sources, including directly on the OTA´s, and trying to get a consensus.  

I would love if my next-door neighbor was a STR! Less potetial issues with guests when the people next door are not full-time residents.

This obviously assumes you are in a market large enough to support the inventory and/or your STR will be competitive with the others on quality and price.

Quote from @Willy Stadele:

As for my partners job just like any other host they list their occupation I don't think anyone books because " Alex Scottareggia is a investor " being a airbnb host is its own negative connotation to some people. 

Completely agree.  That is why I would never put it in my Airbnb profile. My only point was that you want to mitigate anything that would potentially prevent someone from booking your place.  Even if it amounted to 5% of the booking public, I want to keep my audience as big as possible.  
All that being said it´s a pretty minor detail that im noticing only because the rest of the listing is great.  Cheers, and good luck!

Photos look great and you guys did an awesome job with the backyard. Definitely more photos with the mini golf, I am assuming you have clubs?  Put the clubs and some golf balls in the photos and it´ll do a little bit better putting people in the picture when they look at your listing.  Lights in the gazebo/ sitting area? If not, Costco has some great looking solar lights. And then photos at night of the gazebo lit up. 

And... this is a tiny nit to pick and I don´t mean it to come across offensively at all. But everything on your page should have a purpose which is to make someone want to book the place and not deter them.  When I read the about the host section, I cringed a little bit at the ¨social media influencer¨ part.  Nobody is going to book because of that, and it is potentially a turn off for some guests.  Thats one of those words that although probably not justified, has a slightly negative connotation to some people and doesn´t add any value for you guys.  

Good luck, the place looks amazing. 

Maybe a little more insight into the two properties will be helpful for others to give you some more useful advice. You are looking at 100k+ difference in profitability between the two, so what are the primary differences between them that is attributing to this?  Obviously, the larger mortgage payment on the more expensive asset accounts for some of this, but I assume there is more to it based on the profit discrepancy.  What are the biggest differences, and can the success of Prop. 1 be in any way replicated in Prop 2? 

So, the positives are that you are locked into sub 3.5% mortgages on both which allows you to be solely focused on raising revenue and not having to worry too much about getting creative on the financing side.  As mentioned above, 1031ng is not an option for you and if you can ride this out for a bit here are some potential ideas on the revenue side.

You could tap your existing client base and reach out to every 5 star review that you have gotten on Prop 1 and let them know something like... ¨since you enjoyed your last stay with us in Joshua Tree, I wanted to reach out to you and let you know that we recently launched our second project in JT and we are excited to say it's even better than Prop 1.  Thanks to the popularity of Prop 1, and guests like yourself, we have been able to grow and offer even more amenities.  We would like to extend an open invitation to our past guest to come and experience xxx and because of your prior stay we are offering xyz incentive!¨  Probably want to polish that up a bit but you get the idea. 

This might be too obvious but are there marketing opportunities that haven´t been explored? Before selling I would make absolute certain that I am getting in front of every potential client possible. What OTA´s are you listed on?

Additional revenue streams on site?  I am not super familiar with Joshua Tree, but can you offer any additional items for rent, pre arrival services, in home services etc. for a fee that will increase revenue? 

Again, I am not super knowledgeable on the market, but is there any LTR market?  I have had to make the pivot to long term a few times and while it is not ideal, if it puts a band aid on the loss it can be worth it.  Even breaking even or losing a few hundred dollars/month will feel like a win, reduce stress and workload.  

I have seen MUCH worse predicaments and seen investors be able to rebound out of it.  Send me a PM if you want to go over some of the particulars on the two properties and potential strategies to boost revenue. Cheers. 

Quote from @Zach Edelman:

You just have to understand that it's arguably more hospitality than it is real estate. 

 100% agree on the operation side.

Guest experience and service will always be one of the most important parts of successful STR operators. (hospitality)

But, I think we sleep on the analyzation of the assets as an important skill in STR investing. ¨Winning¨ at the time of purchase is huge and the analyzation (asset, market and #´s) are pure real estate investing basics. We just change some of the inputs with STRs.

What I mean is this, IMO: A great property (solid underlying fundamentals) in an underserved market, purchased at an appropriate price but poorly run, still has a high likelihood of being profitable. Hower a ´bad¨ property in an oversaturated market run will face difficulty being profitable no matter how expertly run it is.