All Forum Posts by: Ron Trinh

As a CPA, it probably sounds biased to say hire a CPA but I genuinely believe having them done by a qualified professional will make future transactions with any of those properties go much smoother. Can you imagine putting together tax basis schedules for your rental properties when it comes time to sell or 1031? It is a giant headache to do even for us! 

Bonus! - if you did not understand what I just said in the previous two remarks, please hire a CPA and make it easy on yourself going forward. Just my two cents!

@Seth Wilcock thanks!

@Joshua Carvalho I really like what you were saying about cleaners here. We live above our AirBnB unit and it has allowed us to get away with renting to locals since we have security cameras and change the lock code after every local guest that stays with us. The cameras are placed in a way where guests cannot miss it as it is right at the entrance. 

We had to fire our first cleaner due to a complete lack of integrity and poor/slow communication via text. Our current cleaner, we have had much more success with and found the personality of our cleaner to be a much better fit. She is close to our age (not necessary but helps in our case), communicates the way we do, and is very responsive to criticism. Although not mentioned as such, your cleaner might as well be your partner in the short term rental business!

I just want to say though that we avoided a lot of mistakes by reading the book Optimize your AirBnB by Daniel Rusteen before we started.

Biggest Mistake - I think our biggest mistake with our short term rental was taking so long to furnish it and not capturing business as quickly as we could after acquiring the property (leading to thousands of lost rents). We acquired our property in July of 2020 and did not get our listing active until February 2021. At the time, the supply chain to major furniture stores like IKEA was so backed up we could not order or purchase in store for the furniture we needed. Although inventory shortages due to COVID were not in our control, we could have ordered from other places like online retailers such as wayfair.com and waited the 1 to 2 months for shipping. Instead, we turned to local classifieds on Facebook marketplace to pick and choose pieces of furniture/décor, drove to the sellers location all over the city, paid cash for a lot of these pieces (which made accounting more difficult), and even hand-built and stained a coffee table, console table, dining table, and two side tables. Now that our unit has been producing a steady amount enough to pay our mortgage, we look back and must have lost at least 5 months of rents (approx. $12-15K) by taking so long. 

@James Carlson Thanks! She deserves to see this!

@Dmitriy Fomichenko Thank you sir!

Investment Info:

Single-family residence in Colorado Springs.

Purchase price: $400,000
Cash invested: $25,000

The property is a SFR with a walk-out basement that we Airbnb to allow us to live for free!

What made you interested in investing in this type of deal?

My wife and I wanted to get into real estate investing and were living in San Diego, CA where buying a SFR would make us house-poor as properties with an ADU (accessory dwelling unit/granny flat) were incredibly difficult to find and expensive.

Therefore we researched other out-of-state markets and decided to visit Colorado Springs, CO. We fell in love with the area and immediately set out to find a property we could move into and house-hack.

How did you find this deal and how did you negotiate it?

We partnered with an agent we found on BP, Erin Spradlin, who helped show us properties. We found our property by checking the realtor.com app upon waking up one morning during our visit to Colorado Springs. We had just lost an offer on a previous house and this one had just been posted. We immediately contacted Erin to set up a meeting (this was during COVID lockdowns with no open houses) and arranged to see it that day. Loved it, offered asking which got accepted, and the rest is history.

How did you finance this deal?

Conventional 30 year fixed loan with 5% down

How did you add value to the deal?

The property had a finished basement with a walk-out that we could use as a separate entrance for AirBnB guests. Therefore we spent the next 6 months furnishing the unit to make it a comfortable, pet-friendly AirBnB unit. When we mean pet-friendly, we mean we make it very convenient to stay with pets and believe it to be one of the main reasons our guests book with us.

What was the outcome?

The outcome is now we get to live in a really nice house for free and can use the income we generate for our pursuit of financial freedom.

Lessons learned? Challenges?

One of the hardest parts about setting up our AirBnB was furniture. We had a specific aesthetic we were looking for and a lot of the big-box furniture stores were out of stock of almost everything due to the supply chain interruptions from COVID. As a result, I turned to building a lot of the furniture myself (dining table, night stands, coffee table, and console table for kitchenette) using tools and wood from Home Depot.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Yes - Erin Spradlin. She is an amazing resource and a real estate investor friendly agent we found on Bigger Pockets.

@Joe Hamiter That is a good point. Will definitely have our realtor show us some small multifamily properties too when we visit in April. I think my wife and I are just super excited to have a garage and a yard so we are leaning towards SFR with a basement to rent out.

@Joe Hamiter Hope it goes smoothly! Would love to hear how it all pans out when everything is settled.

And yup, I have heard of those loans too. Our income shouldn't be an issue for the price point of houses were looking at thankfully. Thanks for the suggestion!

@Chris Mantell that's a good point. Maybe we will see if the lender I'm working with will allow my wife to do the same. Thanks!

@Vish Iyer I agree. It might just be a matter of finding the right lender who is willing to work with us. Renting for 6 months would be less than ideal, personally. I spoke with a few RE agents in the area and leases lower than 1 yr are pretty hard to come by as well.