All Forum Posts by: Brandon Vukelich

Thanks again @Michael Baum. Yes the lack of identical apples-to-apples comps has been an issue in the area for years. Appreciate you taking a quick look but Steilacoom is a different market than North Tacoma. The unobstructed water views for both front STR units can be challenging to determine additional value compared to other 3-unit properties without views. With the massive increase in STR properties in the US, I am hopeful that lenders and appraisers will evolve to apply income/exp metrics to STR deals specifically, on top of generic property comps.

@Nathan Gesner Yes, I'm fairly confident if we were to hold long term, we'll do just fine. I want to exit as I don't get any personal use from the STR being 20 mins from home and would rather apply the capital to another opportunity in multifamily (LTR) or another STR in Hawaii where my brother is a broker and now manages STRs. My regret is not buying one in Hawaii or somewhere else where my family could spend some vacation time. Plus STRs are not the model for me. We bought it because it is a beautiful property in solid location and I wanted to learn the STR model. It's too much like the hospitality business rather than a rental. If I didn't have two amazing biz partners, I would have already likely sold it.

BTW, I could have mentioned earlier, when we refi'd in 2022 the appraiser came in at 1,300,000 and verbally told me that he struggled as he believed the property was likely worth more based on the location, views, income. I was able to push back and provided more data, he adjusted to $1,335,000.

@Michael Baum yep, we're good. Just looking to sell in the near future and trying to wrap my head around what a potential STR buyer will expect. If the $107k NOI was an 8% return, I'm looking at a rough $1.33MM value, possibly?

@Bonnie Low I was not including debt as I want to know how a cash buyer would look at the deal. Yes, our prop taxes went flat in 2022 but ramping back up again.

@Nathan Gesner See above. I removed our debt (P&I) all other expenses have been factored. We purchased for $1.1M in 2020. It is a unique property with unobstructed water/bay views in the best neighborhood of Tacoma. I'm a broker and can run comps all day long for straightforward LTR properties, I know small multifamily in our market. I'm just not a pro at STR valuations. As I mentioned to Michael, I'm attempting to see if our returns and operations are relatively inline with the expectations of experienced STR operators. We would like sell when we believe the value is close to $1.4MM or better.

 I second Flynn Family Lending. Great people.

Curious how our self-managed 3-unit STR/MTR performs with industry expectations. Front two units are full time STRs with a rear studio operating full time MTR. We're looking at 2024 gross around $187k with NOI at $107k. Seems a bit high on the exp ratio near 43% but we do pay a premium for our solid cleaning lady, she also stocks supplies, runs errands and other duties for no "extra" charge. No surprise but property taxes (up another 16%), insurance and utilities are all bumping significantly. Other than comps for 3-unit properties (which are typically not furnished and operating as STRs), how would most seasoned STR investors look at valuing the property?

I'm a MF broker working in the 2-20 unit space. I know seller financing and it isn't clear how you define "good" creative terms. Most sellers I know are stuck in 2021 pricing but want 2024 rates. If I have a deal with decent seller financing terms, it will be sold pretty quickly to one of my buyers and not to a wholesaler who can't prove they can close and/or they are the end buyer. You may find a deal for yourself to own but I'm not sure how many you'll have a chance to wholesale. Best wishes on your plans!

Hey Erik,

The Bremerton area has definitely experienced growth like many areas of the greater Puget Sound region. The downsides are that rental demand can ebb and flow with military and some parts around downtown can be a little "rough" with homelessness, junk. As you've been watching, tough to get into a duplex or small MF in King Co under $700k-ish. Kitsap and some parts of Pierce offer opportunities under $500k but it really depends on the neighborhood, property condition, etc. Most deals are going to look pretty challenging from day one as many are underperforming and have deferred capex needs.

I'm happy to help with valuations and rent data if you need it. Best wishes on your journey!

#4 in your top list never ceases to amaze me. If business is slow, plan a vacation. Business always tries to disrupt my vacation plans. I can plan trips a year out and it will likely coincide with an active deal that needs more guidance than my asst can provide.

I would add a #6 to your list of positives - FREEDOM! We do work crazy hours sometimes but my schedule is mine and there is no limit to the income I want to pursue. I can be lazy and earn $40k or crush it and go for $4MM. We don't operate within a salary cap.

@Josh Aljets I am familiar with the deal on M St in Tacoma. The Seattle-Tacoma market isn't great for cash flow day one, assuming you're trying to acquire for 25% down. Yet even if you pay cash, your CoC return is going to be sub 6%, give or take. Plus most of these are owned by small mom-pop landlords that little to no debt and have kept their rents low. It take 6-18 months to stabilize most properties due to the regulations on rent increases, etc. They will eventually cash flow but depends on how the deals are managed. Investors buy here because of strong jobs, strong rent growth, strong appreciation and the future cash flow but honestly many of my clients are playing the long buy and hold, appreciation game. They just want to break even-ish for the first 6-12 months. I know it sounds crazy or ridiculous but to each their own strategy.

Also, the duplex and triplex space in our area is filled with house hacker types. Their numbers don't need to work like non-owner occ investors like us. Any investors buying those are playing the long game, which most of us should be doing anyway. 

Best wishes on your investing journey!

My suggestion is to communicate being a "problem solver" vs a 1-trick pony like every wholesaler mailing "all cash, quick close" cards or realtors sending out "just listed or just sold" postcards trying to attract a listing. My message is more about offering a few options as I am a licensed broker + real estate investor. My options usually include the all cash/quick close to flip myself, listing it (as an agent) but also offering the seller to do a JV flip together, I could wholesale it, offer to buy it myself for a BRRRR or other long term personal investment, etc.

Other than that, I have done a separate "tired landlord" campaign targeting small multifamily properties that have been under the same owner for 10+ years. I usually get about one good hit/lead per 500.

Best wishes on your efforts!

Those are two very different paths. Not sure why you would want to shift at all. Sounds like you have found a lane that works and is growing. Stick with what has been successful for you and is enjoyable. It's too difficult to give much input without knowing your capacity to manage more, what's your end goal, etc.

I own STR/MTR and LTR properties. I'm not interested in growing many more STR/MTR. Those operate more like a hospitality business than a rental business. Plus as we all know, more cities all over are pushing for more regulations & limits. But if you love them, keep moving forward. Best wishes on your journey!