All Forum Posts by: Benjamin Vail

@Michael Greenberg  I agree that there is a model that will work with this. This is the second one I have tried, and I do them both as experiments to eventually work out the best model for this process. Yes, I anticipate the appraisal being less, and I am putting it in the contract that the buyer will pay cash for anything that the appraisal falls short of our agreed price. So likely they will be writing a check for the furniture and “business” items that their mortgage won’t pay for. 

I am very interested in a group discussion, call it a mastermind session, on this if others are as well? 

We do this with several duplex properties, where they have 3 listings. It works great to optimize revenue, because like @Julie McCoy said, you can try to fill the combo listing first, and then fill in the gaps with the smaller units. I have been playing around with pricelabs, and am working on some pricing rule-sets that are best suited for the combo listing properties. Good luck! 

I wonder if this will classify as “Airbnb Plus (more than you bargained for)”

@Kevin Lefeuvre, and @Carmen Costescu I have offered the house for sale at about 5% higher than what I believe the market value to actually be with the furniture included. I also own a property management company, so I am offering the existing management contract to remain in place for the new owner. That way the listing does not need to change, and the reviews and reservations stay in place. Obviously someone could make an offer on just the house without the furniture, and without the management contract. If a buyer does want the package, I am going to add a clause in the purchase contract stating that if the appraisal amount comes in below agreed upon price, the buyer agrees to pay the difference in cash.

So far I have had more interest from owner occupant buyers than I anticipated. Like @Andrew Narsi said, people seem to love just knowing that if they had to leave town, the house could cash flow positively as an STR.

 This week I have started the adventure of selling the second short term rental house that we have listed as a turnkey investment. We are selling this house furnished, and managed, with reservations in place. 

We took some risks this time, and got creative with the marketing in the MLS. I put screenshots of the revenue from airDNA as a photo in the MLS. I also posted some of the guest reviews as photos.

Yesterday was the first day of the market,  and we had 13 showings. I anticipate multiple offers soon! What was surprising to me, is that many of the buyers wanted to live in the house. But being able to Airbnb it when they were gone was a huge selling point. I think this is marking a change in the greater real estate market, most houses could be sold for higher by showing what they could make on Airbnb. Not to mention it is much better than just staging, the place actually feels inviting, and lived in. 

Has anyone else tried marketing a house for sale, by demonstrating the STR potentials? Is anyone else buying or selling STR houses furnished, as a turn-key package?

@Ethan Cooke thanks for sharing the examples! 

Lessons from this thread so far. There 2 things that will kill you, Bears, and hidden cameras. Or, maybe they won’t kill you, just make you stronger! 

You should be honest with your current landlord, and be honest with your new prospective landlords. Doing STR with someone else's property when they don't know about it is a horrible situation that can lead to very bad things. For instance if a tree feel on the house, and the property insurance company found your STR listing on Airbnb, they could deny paying the claim!

The right way to do rental arbitrage is partner with landlords, not pull the wool over their eyes. your landlords should be well aware of what your doing, and be ok with it. THEN share your current landlord number with new prospective landlords. 

I’m not sure which “get rich quick” webinars you were watching about rental arbitrage, but I think you missed chapter 1: create an open and honest relationship with your landlord of your first unit, before you move on to chapter 2: get another rental to arbitrage. 

My 2 cents, it all depends on the house, and the situation. I own 4 of the 34 STR houses that my company manages. I obviously have more control over the ones I own, and I make more money on the ones that I own. However, there is still a great business to be had in properties owned by other people. Especially when you have good management systems in place, and other owners want your help! @Paul Sandhu and @John Underwood have security in the ownership, and also can make money on appreciation while making money as the STR. However with the @Ethan Cooke model, you can be flexible, and agile. If one landlord "pulls the rug out from under you" you can rent a U-Haul, and move your stuff to the next landlords apartment down the road for $100. If you can mange the flow of leases, and properties to line up with your resources, capitol, and demand, then you can easily set up these Airbnb houses to be in the right place, at the right time to maximize revenue and profits. 

My favorite model, (the happy medium), is to partner with the landlord or property owner, and charge a percentage of the revenue you make for them with their property. This is great because the owner more aligns with managers perspective, and then all parties want to help each other out.  

@Luke Carl I am also voting for #Paul Sandhu for president in 2020! 

I would be concerned about how you will transition not only the list of cleaners and contractors, but how you will then "keep the plate spinning". Do they have software and systems in place to schedule the cleaners? Do they have systems in place to do maintenance and inventory checks on the property on a regular basis? How to they process feedback from a guest, into action items that can be taken to fix the issues with the houses, and items in the houses? If you are not buying the real estate, then how will you work with the owner to do things like fix the AC when it goes out? These are all solvable questions, but are things you should keep in mind when buying a vacation rental business. 

We use AirDNA, our pricing software wheelhouse, our past STR houses data, and also Airbnb.com to look at new comps before we take on a deal. I would say Chase flow is the #1 most important factor when analyzing a potential STR deal. We plan on about 20% of gross revenue for cleaning expenses, and about $50-$80 per month in consumable supplies (because we offer lots of amenities).

 Don’t forget to thoroughly inspect the property for ongoing maintenance issues that can cost money. When it is a short term rental, your business depends on the house being in top working order, or guest will not be happy and you will pay refunds.  Like, don’t take on a house that is going to cost $80 to shovel the snow every time it snows.  Instead take on a house with a short sidewalk. Look for newer “turn-key” properties, with little or no Cap-Ex. 

 Also, don’t buy the August lock systems. They don’t work well in the cold!