All Forum Posts by: Collin Chan

I would also consider taxes into your situation. Are you able to take advantage of the ADU as an expense against other income (W2 other gains) where you could get back most of it? Other options might require you to pay additional gains on your income if not tax advantaged through real estate so having a tax strategy could also come into play in this decision vs straight cash on cash.

Definitely worth to try both in a hybrid if you can.  I don't know the Oregon scene too well however a house we purchased in Napa was a monthly vacation rental before and it was booked 8 months of the year.  It was smaller as well (2/1) so maybe attracted retired couples but with things changing, I'm not sure if remote workers might be interested in staying your location?  Most of our STRs have an office set up of some sort or a spot to work with monitors and we do find this attracts a lot of guests where someone needs to work while the family enjoys the activities.

Traveling nurses get a lot of the buzz around MTRs but displaced families from fires (Napa and Oregon do see a lot of these), other work force that can be remote or travel, or other potential guests.

Also, definitely use Airdna or one of the other sites that estimate your revenue to see how it would perform in your market and then look at other listings as well to see what amenities they offer to see if you could be competitive in your market.

Can you combine?  I know theater looking seating shows well in listing pictures (and we have it ourselves) but maybe you could have a couple pull out sofa beds that could be used for theater seating or extra beds?

It depends on your market and how well a 5 bedroom house does vs 2 separate units with a 3/1 and 2/1 mix.  You would have to look at comps.  Keep in mind that if the top and bottom are rented out separately, guests below may complain about noise from guests upstairs even just walking around since most single family homes aren't built with noise separation in mind.

If a 5 bedroom can get a lot more income than the 2 units or you like to have one unit for better efficiency, some opt to have another listing with just a portion available within a month to fill remaining days that aren't booked since it's easier to get smaller groups last minute than larger ones.  You can have multiple listings for the same properties with rules to set up when they are bookable.

@Jimmy Woodard. Not sure if you're still active on BP.

Jimmy had a pretty good list of each CA city/county and their restrictions or policies so you can see what might be a good fit for you.  Check out their profile and company information to see if they have information that could be helpful for you.

We kept 40% in the property.  It was part of a 1031 exchange split across 3 properties and we put more of the funds into this property since we planned to remodel and pull some of it back out after the value add project.  

Our 5 bedroom on Airdna is pretty wide from 180k-240k annual gross income.  We're on track for 140k but just launched this one in March so it's a slower run up but fall and holidays are booked already.

Feel free to connect and I can fill you in on more details.

+1. We've done value add BRRR STRs as Rob likes to call it and put money into remodeling houses from 3/2 to 5/3 houses. We bought for $950k and after $200k in remodeling had it appraised at $1.4M and did a cash out refi to pull out the construction cost. We increased the value by 200k and are doing a cost segregation study on the improvements to accelerate the depreciation to offset other incomes. So we got the forced appreciation, the accelerated depreciation, and now STR income.

Given that you sold a business you might want to talk to your CPA about this strategy to minimize the taxes from selling your business.

I have STR insurance through Travelers. They have a product that covers STR related issues.

Looking at Safely for direct bookings which also covers background checks and including it in the fees.

Start scouring FB marketplace, Craigslist, garage sales or even furniture clearance sales to pick up furniture for cheap if you are looking to start for less than $10k.  I've heard of new people starting out this way without a lot of cash or credit on hand.  It will take a lot longer to find furniture that might work with your design aesthetic.

Smaller properties can be much cheaper to set up as well if you can't start with a studio rental for arbitrage.