All Forum Posts by: Brad Piper

I am looking for a new property manager for my LTR in Montgomery, Alabama. Does anybody have any solid recommendations?

It might not fit in with your current life (work, kids, goals etc.), but I would encourage you to think about self-managing the property. We used Vacasa for a while on one property, and we used a different local STR manager in a different city on another property. What we found is that we end up being pretty hands-on regardless, and that the STR managers don't care for the property or guests anywhere close to as well as we do, so we end up having to babysit the property manager all the time. Those companies were charging us 18% and 24% respectively, but we felt like we were still doing about 90% or more of the work. With all of the technology that exists (IGMS, pricing websites like Wheelhouse, Turnover BnB, AirDNA, STR Insights etc.) once you get everything setup and you make a few local connections by calling some handymen or contracting companies, it really isn't much work other than responding to guests and leaving reviews. We spend less time managing our STRs now that we have our infrastructure setup, than the time we spent babysitting our property managers when we were paying them 20%ish to do a mediocre job!

Hey Mike - we are near the corner of Greenway and N Scottsdale Road, we love it up there!

I own investment properties (both long-term and short-term rentals) across 5 states. I am hoping to find a real estate tax specialist that can help me develop a tax strategy going forward so I can make sure to have as lean a tax burden as possible as I continue to build my portfolio. 

Investment Info:

Single-family residence other investment in Scottsdale.

Purchase price: $685,000

I went in with a business partner on a house in north Scottsdale, AZ to operate it as a STR. We decided if we were going to do it we wanted to do it correctly, so we hired a designer and had work done on the property for about 3 months before finally listing it. We used a property manager for the first 6-7 months, but have since switched to managing it on our own and we are loving it. We have about $100k in equity (both appreciation and property improvements) in about 10 months, and even though our listing is very fresh we are already receiving a solid net cash flow.

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

My business partner and I each had some long-term rentals, but all of our analysis pointed us towards the STR market. We love it and we have now done cash-out refinances on our LTRs and have pivoted into exclusively STRs.

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

We found and worked with a Realtor who helped us out really well. We put in a quick offer and didn't ask for much in negotiations.

How did you finance this deal?

DSCR loan

How did you add value to the deal?

Added a putting green, fixed the pool, painted some rooms, changed up landscaping all around the exterior of the house, and hired a designer to make the place look really nice.

What was the outcome?

We have about $100k in equity (both appreciation and property improvements) in about 10 months, and even though our listing is very fresh we are already receiving a solid net cash flow. We have since purchased another STR and are hunting for our 3rd currently.

Lessons learned? Challenges?

The big two lessons we learned would probably be about the property preparation, and to be weary of property managers. At least in the competitive Scottsdale market, it takes time and money to get a good listing ready. It really hurt to not list the property immediately, but are so glad we didn't because we weren't ready. We used a property manager that charged 24% but probably only did about 10% of the work. Since we got rid of them, we get to keep way more revenue and not do much more work!

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

Frank Apodaca with Barrett Financial was our lender, he's a mortgage broker that can lend all over the country. If you hit up Frank, mention my name to him! I work with him a lot. Our realtor was Ryan Loeding, he was quick and solid to work with, and his knowledge of investments (from his own experience) was helpful.

Investment Info:

Single-family residence other investment in Scottsdale.

Purchase price: $685,000

I went in with a business partner on a house in north Scottsdale, AZ to operate it as a STR. We decided if we were going to do it we wanted to do it correctly, so we hired a designer and had work done on the property for about 3 months before finally listing it. We used a property manager for the first 6-7 months, but have since switched to managing it on our own and we are loving it. We have about $100k in equity (both appreciation and property improvements) in about 10 months, and even though our listing is very fresh we are already receiving a solid net cash flow.

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

My business partner and I each had some long-term rentals, but all of our analysis pointed us towards the STR market. We love it and we have now done cash-out refinances on our LTRs and have pivoted into exclusively STRs.

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

We found and worked with a Realtor who helped us out really well. We put in a quick offer and didn't ask for much in negotiations.

How did you finance this deal?

DSCR loan

How did you add value to the deal?

Added a putting green, fixed the pool, painted some rooms, changed up landscaping all around the exterior of the house, and hired a designer to make the place look really nice.

What was the outcome?

We have about $100k in equity (both appreciation and property improvements) in about 10 months, and even though our listing is very fresh we are already receiving a solid net cash flow. We have since purchased another STR and are hunting for our 3rd currently.

Lessons learned? Challenges?

The big two lessons we learned would probably be about the property preparation, and to be weary of property managers. At least in the competitive Scottsdale market, it takes time and money to get a good listing ready. It really hurt to not list the property immediately, but are so glad we didn't because we weren't ready. We used a property manager that charged 24% but probably only did about 10% of the work. Since we got rid of them, we get to keep way more revenue and not do much more work!

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

Frank Apodaca with Barrett Financial was our lender, he's a mortgage broker that can lend all over the country. If you hit up Frank, mention my name to him! I work with him a lot. Our realtor was Ryan Loeding, he was quick and solid to work with, and his knowledge of investments (from his own experience) was helpful.

Nearly impossible when you don't live in the area where your STR is. That being said, one option is to go fly out to your STR, sleep in the house for free, then rent a truck and/or U-Haul and spend about 2-4 days grabbing stuff from garage sales/facebook marketplace etc.

Following up - I talked to Visio and they can offer about 4.625% with 70% LTV, and 4.875% with 75% LTV, and you can buy down about a quarter of a point, but they don't go lower than 4.5%. They are asset-based and have a DSCR of 1. I haven't heard from Host, but I imagine Visio's terms are about as good as it's gonna get for a STR loan unless I can find a private lender that is willing to do less.

 I'd piggy back on this, and add that my advice would be to really focus on one thing at a time. Figure out whether you want to do short-term or long-term rental, single family or multifamily, and it's probably easiest to focus on your local market (or a market that you have lived in and know well). Quickly pick this, then focus your efforts on becoming an expert. If you decide you want to focus on single family long-term rentals in your area, then only spend time figuring out how to grow your knowledge in those areas. One thing that slowed me down initially was trying to read everything on every topic, you get bogged down and become a "jack of all trades, but a master of none." Slowly over time you'll soak up knowledge and you'll be able to branch out, but for now keep it as simple as possible. From the great book Essentialism by Greg McKeown (discussed on podcast ep. 431): you "can do anything, but not everything." Good luck! 

What's an expectation for how much a solid STR property manager should cost? I have only talked to one, they're in south Florida and they charge 20%, but they do pretty much everything.