All Forum Posts by: Bryan Waller

 We're at about 50% for the first 4 months. A lot of covid cancellations. We only need about 70% at mid-range daily rates to be cashflow positive. At 80% with above average (where we are targeting) we will see significant monthly surpluses.

We did our STR in Maui for less than $300K. We used a mortgage broker to get a reasonable deal on rates, then did the rehab with locals, managed by us. from home and on site. close to breaking even on a month to month basis even with Covid cancellations and such.

I would consider Calgary a flat to down market in the next 5 years. Possibly worse for condos, even in desirable areas. There are a LOT of high rise condos bought for investment/income in the early 2000s that are underwater and they are still being built. Townhouse style near downtown might do better, but price point is much higher. There is also some concern (i don't have details) about the level of condo fees and the suspicion that they are being set artificially low on new build. I have no facts to back this up, just a rumour that I saw on BP and elsewhere.

Until there are some sustained movements showing a vacancy decrease in downtown commercial office space I wouldn't risk it, but that is just my tolerance level. 

Flip and buy and hold on single family in the older (30+ year) neighbourhoods still has some a lot of space to add value or income if you're looking longer term.

@Caroline Neubauer we are into renting now. the renovation looks great. its slow getting bookings with no reviews, but we have some in October/November with it picking up in December and February. We're going to drop the rate for the close dates to try and get some bums in seats.

@Jacob H. we are in Calgary, Canada, so we have a local PM and they are going to manage the rental with a bunch of input from us at the start until we find the right mix of price/occupancy/pacing/amenities. we've been pretty hands on so far, but will start to back away as it gets up and running. we want to stay close to it so we can see if we continue to build a portfolio in Maui, or look for other opportunities nearer to home. Our initial math says that the potential in Maui is better than here in Calgary or Canada in general.

I don't think I am allowed to post the link to our listing but if anyone is interested to see it (before and after) you can message me directly.

Hi @Tiffany Kho, we bought our first Maui STR in the summer, did a small rehab/reno and are now on the AirBNB/VRBO market. The bookings are starting to roll in, but we aren't cash flowing yet.

We used AirDNA to get a sense of the revenue potential. We still need some time renting to see how realistic that analysis is. 

Prices have jumped a bit since we started looking at the end of 2020 and prices in our complex specifically for similar units are up nearly 20% since we went under contract in April. I'd like to hear others experiences about that or how you're evaluating financials.  Our goal is break even since we see the place as our eventual retirement place, but ultimately the financial analysis if correct should be much better, especially in the long term with a 30 year fixed rate.

Good luck and keep us informed on how you do!

Bryan

Investment Info:

Condo buy & hold investment.

Purchase price: $695,000
Cash invested: $260,000

2 bed / 2 bath / 2 story ocean view condominium, purchased for short term vacation rentals. renovated by me and my wife and skilled trades that we found via connections on the island. No revenue as of August 15, should be renting by September 15.

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

Good ratio of revenue to cash investment, but with a view to a retirement location for the future. Used research from AirDNA to get a sense of rental rates/vacancy rates/seasonality, but with COVID the last year is likely not representative of the future.

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

Found through MLS with a realtor.

How did you finance this deal?

Mortgage broker, personal cash for down payment, closing and renovation costs.

How did you add value to the deal?

Identified a tired property that we could do a mostly cosmetic renovation, some upgrades, and sweat equity on many of the smaller items.

What was the outcome?

Still to be determined. :-)

Lessons learned? Challenges?

Trades were extremely difficult to find at the time in Maui as everyone seemed to be having the same idea about renovating and demand was high. Logistic / supply issues on the Island also made getting appliances, housewares, and almost everything difficult or expensive to get. We actually saved some money by purchasing items at home (Calgary) and bringing them to the island

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

PM me for mortgage broker and property management recommendations or trades.

I'll try to make it Vincent! The last one was great.

As usual in any commodity squeeze producers and consumers get pinched and the middle men, brokers, traders, clean up. They take capital risk, but reap big profits.

@Elijah Williamson

Great summary of your opportunities! The only concerns I would have is that it may take longer to exit the market you’re looking at when the time comes (planned or unplanned), and that if the small town has any key employers or industries that you have a good handle on the future prospects.

The first you can mitigate buy building that portfolio in a way that you could exit with selling a bundle as a functioning business with great cash flow. Sounds like this wouldn’t be difficult.

The second will just take a bit more research and vision. It sounds like you’re already good at that.

Good luck.

Bryan

If you're considering Calgary, make sure you're ready for a potentially rocky road for the next few years, maybe decades. House prices are flat in general since 2015, there was a net negative migration (or close if i remember correctly) in 2020, and the key driver of the economy is in roughly the same place as North American automobile manufacturing was in the last 25 years, long term decline in jobs, reduced wages, and substitution from cheaper offshore options.

If you subscribe to a deep contrarian approach, go for it, maybe we are at the worst and it can only get better. The landlord/tenant rules are favourable to the landlord compared to BC or ON, debt is incredibly cheap and people believe Calgary will recover. Somewhere in the middle is the truth.

Buy and hold in Calgary will be most effective in older neighbourhoods that are closer to downtown than the fringe suburbs. Prices are more realistic to rental returns on the east side, than the west, but churn on tenants may be higher.

The condo supply in Calgary is huge so I would be wary of that. A lot of condos, especially near downtown, were bought as rental investments. Use the CMHC to get some stats.

Bryan