All Forum Posts by: Benjamin P Cohen

@Pat Aboukhaled, 

Thanks so much for the thoughtful reply. Great point regarding regulations. I had a look here and it does look like typical STRs are in fact prohibited, though > 30 days looks to be allowed. Makes sense now that all the listings on Airbnb were either hotels, guest houses, or rooms rented from someone's primary residence. That already helps a lot to understand what the rules are. I'll have to update my strategy accordingly.

I'd love to connect with your Realtor friend, and if I'm ever in Phoenix I'll be sure to let you know!

Howdy all,

I am based in the Bay Area, but looking to invest in or near Bishop, CA. I would most likely try to use this property as a short term rental during most of the year, and use it myself periodically during climbing season. I'm looking to connect with:

- Anyone with short term rental experience in Bishop or surrounding region. I'd love to hear about your experience and take notes.

- An agent who I can stay in touch with.

As always, I appreciate any thoughts and input. Side note, I'll also be in the area in the coming weeks (dm for details). I'm happy to grab coffee and/or tour available homes. Looking forward to hearing from you!

Grant, Matt, Jeff,

Great points. The Lease to Locals option in Truckee may be hard to execute on because of extra hurdles in the form of permits and regulations. I don't know how hard it is to get a permit, but waiting for a year before renting seems far from ideal. On the other hand, it satisfies the Lease for Locals requirement that the property is not rented out for 12 months before you can benefit from the program. But it's great to know opportunities like that exist. And duly noted re Placer County. 

Quote from @Matt Fine:

Hi Ben,

As was mentioned before, the STR scene is ever changing with the regulations. I'm in the Tahoe/Truckee area and the regulations are a bit different in every jurisdiction. One thing that's certain here is the need for "workforce housing". There are a number of properties in the area that would support a long term rental and an STR. Some areas have significant grant funds available for owners who sign 6mo + contracts with long-term renters. It might be good to look for these small multi-family properties or places with ADUs. Just make sure you have a quality agent- there are a number of uneducated agents around that aren't fully aware of the different rules in the different jurisdictions.

However, on the STR front in North Lake Tahoe- a clean and well designed property can see amazing returns. The range of quality is huge and a lot of places set the bar pretty low. It's not hard to do really well.

Good luck

Thanks Matt, that's great input. I did not realize there were grants one could apply for to help finance investments at all. Do you have any resources you'd recommend reading on the topic? Is that something I can apply for independently or do I need a licensed agent to help with that? I'll have a closer look at North Lake Tahoe as well. 

Quote from @Peter Mckernan:

Quote from @Benjamin P Cohen:

Hi all,

I moved to the Bay Area about 2 years ago, been saving a while, bought and sold once before in Pittsburgh before moving here, and now looking to buy again. Looking to discuss and be advised by community / mentors. I'm considering multiple strategies including:

- Buying a primary residence in the Bay Area (difficult due to extremely high prices, possibly renting rooms after required interim period)

- Buying a rental investment property in CA where it is cheaper, and cash flow is more feasible (e.g. Fresno,)

- Buying an AirBnB investment property at a nice destination CA (e.g. Bishop - I'm an avid rock climber, know people who rent in Bishop for an entire month of the year to climb during peak season. Truckee, various lakes, etc. also seem plausible as it is cheaper to buy in these areas but they are nice destinations).

I'm interested in purchasing for investment purposes, even if it is a primary residence. That in mind, I'm curious which of these strategies seems best. Is there another strategy in the mix I should be considering?

Best,

Ben

 If you go Airbnb in the areas you talked about be sure to confirm the income and how solid it is! There are a ton of Airbnbs that are not doing as well as they were. 

Shoot for the Midterm which might be better and more consistent depending on the demand of the area, which you can check on Furnish Finders. 

Thanks Peter! Was not familiar with Furnish Finders and will take a look. Generally speaking, I totally hear you about only investing if the estimated income is highly reliable. One thing I'm less confident with is how to estimate income for Airbnb type properties. There are standard rules of thumb for standard rentals. Do you know of any rules of thumb or heuristics for Airbnb properties?

Quote from @Jake Andronico:

@Benjamin P Cohen

Welcome to BP! 

There are pros and cons to every strategy you mentioned, and really every strategy in RE investing. 

It all depends on your goals and what actually fits your lifestyle. 

Rock climbing is an awesome passion. I'm a huge fisherman and when I'm making career/investment decisions that is at the forefront. 

P.S. I worked in Truckee for an STR company previously and my family has owned an STR in Incline Village near Lake Tahoe for almost a decade. STR regulations change frequently, so definitely want to do your research before making that decision. If you need resources to explore that option I'd be happy to provide.

Thanks Jack! Yes, I'd be happy to read up on any information you're willing to provide about STR regulations. As I mentioned in a different reply, the STR approach seems like it might be more complicated than more of a standard rental approach, but maybe that impression will go away once I do some reading. Right on with regards to fishing!

Quote from @Jeff Zimmerman:

Hey Ben, those are great questions.  I think all of them carry value and you just have to figure out which one you are most comfortable with to start

-the first strategy seems like a really good one if you want to go for a lot of appreciation but lack of cash flow.  There is merit to that as you can enjoy your own home while it keeps moving up in value and making up for some of the expense by renting rooms.  the other nice thing about this strategy is that you can be extremely hands on with your first investment

-your second idea, buying a rental where it is cheaper, is a good one too as it may allow for actual cash flow.  the negative is that you will have to drive to your first rental to check on it which can be cumbersome but it also may set you up to buy multiple properties faster while you are still renting in the bay 

-the last one, buying an Air bnb is also a good one and I've known people who have done well with it.  the areas they get in trouble though is when they buy a property that's too small and therefore isn't as rentable which means you get more vacancy and/or they buy a place that is extremely slow during certain parts of the year (i.e. spring melt in tahoe) which again, raises the vacancy.  but it's all just numbers and research with short term rental managers in those areas to see if it makes sense. 

in short, all of these have their pros and cons, it's just about deciding which pro's and cons you want to deal with or where you feel most comfortable.  Good luck! 

 Thanks Jeff!

RE the first strategy, I'm beginning to think its a riskier strategy. Things are so expensive here in the Bay Area that the down payment + high mortgage carries a massive opportunity cost (cannot looks at other investments for a while since you have to build up savings again). And it seems harder to estimate how a property will appreciate compared to how it could cash flow. Do you see anything wrong with that analysis?

RE 3) AirBnB also seems more complicated. It involves extra upkeep, more variation in cash flow because of vacancy and season dependence. If I end up going with this approach I'll definitely keep that risk in mind of more vacancy due to smaller property.

 I'm beginning to think 2) is the most feasible and scalable.

Quote from @Jamie Dietz:

Sometimes it makes sense to invest in your passion.  If your are passionate in rock climbing then focus on an areas like bishop or Joshua Tree.  If it makes you excited then you will make is successful. 

 Thanks for the input Jamie. I hadn't thought of it from that point of view yet. Will definitely keep "specialize based on passion" in mind.

Hi all,

I moved to the Bay Area about 2 years ago, been saving a while, bought and sold once before in Pittsburgh before moving here, and now looking to buy again. Looking to discuss and be advised by community / mentors. I'm considering multiple strategies including:

- Buying a primary residence in the Bay Area (difficult due to extremely high prices, possibly renting rooms after required interim period)

- Buying a rental investment property in CA where it is cheaper, and cash flow is more feasible (e.g. Fresno,)

- Buying an AirBnB investment property at a nice destination CA (e.g. Bishop - I'm an avid rock climber, know people who rent in Bishop for an entire month of the year to climb during peak season. Truckee, various lakes, etc. also seem plausible as it is cheaper to buy in these areas but they are nice destinations).

I'm interested in purchasing for investment purposes, even if it is a primary residence. That in mind, I'm curious which of these strategies seems best. Is there another strategy in the mix I should be considering?

Best,

Ben