All Forum Posts by: Chase Arthur

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Hello all. I am currently in the Northern California area and have been looking for properties to arbitrage. Im fairly new to this industry and would love to hear what you guys think about this deal. 

This property is in a wine county . Less than a mile away from multiple wineries. 

3b

2.5ba

1580 sq ft

2 floors

asking 3400 rent

Now for the statistics (sourced from Air DNA) 

- Only took the medians or the average homes when sourcing the statistics. Aimed for mid to lower percentiles just to be safe. 

- All this info is from 3 beds in the area

(YTD) ADR = $387

(5Y) ADR = $371

YTD Occ = .69

(3Y) Occ = .61

Taking the 3y Occ and 5y ADR    371 * 18 = $6678. 

Operating Expenses would be around 4000 - 4200.

Cashflowing around $2500 / month 

all worst case scenario #'s

Start up cost = around 20,000 ( furniture = 12,000) (security deposit / first&last = 6800) Round up to 20 just to be safe

Break even = 7/8 months

If all goes well would extend the lease and profit the whole next year. 

Thoughts?? 

Also curious as to what partners would be needed in doing this. So far I have 

- CPA (open LLC)

- Attorney ( Review Contract/ add in certain clauses)

- Interior designer ( Floor plan / buy list) (not sure where to find one or if one is even necessary)

- Real estate Photographer (To take the pictures) (Again not sure where to find one or if one is necessary)

- Cleaners (Looking to source them off of Turnover BNB)

- Local Handyman (To fix small things/ could do it myself if I'm in the area)

I will start off by managing the property myself with the help of Guesty. Not sure how much work this will require yet, any feedback from someone who manages their own properties would help a ton.

This is where Im at on things, again relatively new to this industry but so far this seems too good to be true. I know there are a lot of things I'm missing, which is why I'm hoping someone experienced could give me a reality check or help reinforce my thoughts on this. Any feedback or input would be greatly appreciated. Thanks

Thank you for the feedback. I only find myself in this situation because the market is at all time highs right now and I don't feel comfortable or am even able to put down a big downpayment. Nonetheless I am eager to get my feet wet in what its like to take care of a property and I feel as if this is the only way to do so without exposing myself to massive liability. I know its not the most efficient method of real estate investing but it seems to be my only option. We all have to start somewhere and even if I cashflow little to none it would still be a great learning lesson. I will continue to read through posts but am still curious as towards your reasoning. Thanks 

Looking to start my real estate journey in what appears to be the least risky and highest cash flowing way possible. By that I mean arbitrage. What seems like a proven and practical concept, reveals to have many specific dynamics that could make or break a deal. I have recently ventured down this path looking for areas to get started in. Primarily places with high occupancy, high daily rates, and low rent. You know... the basics. Right now the biggest struggle for me is getting started. There is a lot that goes into STR and without previous experience, its hard to find the right answers. For the last 2 weeks I have been trying to find a mentor or someone who has at least 1 STR to help analyze some deals for me and perhaps answer questions. However all I'm running across is self proclaimed gurus asking 6-8k for their course. I'm now at the point where I'm ordering every air bnb book I can find to help get more insight. I understand life is quid pro quo which is why I'm struggling because it seems the only thing valuable to people nowadays is money. So I guess I'm looking for someone or a community of people that can relate back to when they were in my shoes and point me in the right direction. Any feedback or advice would be greatly appreciated. Thanks