All Forum Posts by: Brian Barch

In a somewhat weird way, I don’t mind higher rates. They keep the competition down and force me to underwrite under the worst of conditions. To some extent I try to ignore them, and just underwrite the numbers.

To me I’m more concerned with buying good properties in good areas.

One thing I won’t do is buy a crappy property just because it cash flows. I personally want to be proud of the property a decade from now

I’m in N GA. Yes, you need one, it’s table stakes. We pay to have it serviced. People want to use it year round, they love resting the muscles after hiking (although I’m not personally a hot tub lover). 

Yes, it is the thing with the most problems. It can just turn green from seemingly no reason, people will track dirt and pebbles in, etc. but it hasn’t been that bad.

many guess is the breakeven might be 18 months?

I don’t want to state the obvious, but when I was in college my roommate and landlord bought a hot tub, not knowing he had to pay $900 to upgrade the electrical. Just an FYI if you didn’t know. Also common to reinforce the deck underneath, but a good hot tub place should help with all of that 

I am VERY MUCH with John on this one. So many STR influencers out there are being paid to confuse you and convince you that you need a huge set of tools to run one or even a few STRs.

I'm not saying tools can't have their time and place, but in hindsight I can say that I would advise someone to:

1) start on Airbnb.  Use their tools.  Get in a routine

2) Add VRBO, sync the calendars

3) THEN determine if you want to add things like dynamic pricing and whatnot.  

To me, you can paralyze yourself and never just get started.  You add unnecessary complexity to just starting out trying to make sure everything syncs just right and works super hands off.  Start small, and your gut will tell you if and when you need to add "passive" tools to help you

I live in the ATL metro, have researched and ADU for the sake of parents living on the property.

I think the core challenge is, when it's all said and done, I think It's hard to build something you are proud of for less than $250K all in when you factor in the testing, permits, land prep, utilities, the building.  

I don't doubt that someone that is super handy can do it cheaper, but that's about the price conclusion I've come to.

But that said, I think it's absolutely worth it depending on location and subject to STR regulations. I think it greatly increases the value of your home as well. Not to state the obvious, but you have to be okay having others on your personal property all the time.

We do not. We do have it serviced/maintained by professionals 2X/mo 

Bought in late 2022, for a personal vacation cabin that we’d rent when not using. That alone took pressure off from needing to make a ton of cash flow. 

We bought at peak interest rates, not because we were naive, but because the timing was right for our family.

10% down, $370k cost,  we will gross about $57k our first year. Super happy with that. That’s included about a dozen personal stays.

A reminder, real estate has historically been a long game. The idea that you can buy 2 properties and cash flow enough to quit your day job was mostly born out of luck in a post COVID world. I think most will be happy to break even in the early years, and profit in the long run.

I could be wrong here, but I think some of the glamping trend is fading.  I don't see or hear about a lot of repeat customers in that space.  I get the appeal to saying you roughed it a bit one time, but it'd be tough to sell people on that year after year.  

I also don't love the long term appreciation aspect of effectively owning a high end tent.

I think you are going about it just fine.

I would use several tools, airdna, awning, enemy method, local realtors/PMs to arrive at revenue projections.

Think about furnishings, design, etc. 15% of purchase price/year in revenue is a good target for STRs, but all depends on your goals.

as I’m sure you well know, do your due diligence over and over, but at some point you have to do the leap of it meets your threshold….no such thing as a sure thing

It sounds like you have $5-7k/mo worth of cash flow margin to work with even if things decline. 

Also, I think it’s nice to remind yourself that real estate has traditionally been a long game. I’m thrilled for your recent success, but that need not be the bar going forward. 10 years from now, are you going to be happy that you did this?

if you do, simply don’t bet the farm doing so. Use your most conservative estimate and make sure you could stomach that actualizing