All Forum Posts by: Collin Chan

Thanks for sharing the article.  For those that don't click the link, it looks like this is Oahu specific right now and in areas designated as non-resort areas.  Still might mean resort areas are a good place to invest as Hawaii starts to limit STRs in other areas so supply could be constrained with then demand increasing.

I have looked into Maui and Kona and realtors have advised the resort areas for any STRs since it has more historical rental laws and guidelines. Similar advice that others have given to invest in locations that are STR friendly.

Join some meetups and groups that also invest in Florida.  Meet some other people on BiggerPockets that invest in Florida and ask if they can share their property managers.  

Depends on your market and target guests. I don't think a headboard costs much more so it just depends on if it will generate higher rents and more occupancy for your specific STR.

I've looked into condotels as well.  Generally, the 50% is a lot to pay for them to manage your property.  Even Airbnb arbitrage at max is 30% with an opportunity to have that a lot lower if you look.  Also, track the sales history on those comps but they generally do not appreciate at the same rate as a traditional owned property.

Collin

It seems like yes.  You would really have to compare the numbers so it's difficult to say based on limited information.

Keep in mind, you also get to increase your tax depreciation as well by acquiring another asset to offset your net income.  Add in principle, appreciation, and potential additional cashflow you should have a net positive.

Also, when rates come back down in a few years, you'll likely either be able to refinance the rate back down on that first property to increase your cashflow or will be pulling out additional equity for another property if you plan to scale.

I'm doing a 1031 exchange now selling a house in the Bay Area that was only cash flowing $300/mo on $3400/mo rent as a long term rental with a very low ROE. Identified 3 properties in a high STR area that could gross up to $36,000/mo gross and cash flow far exceeding $300/mo.

While searching for those 3 properties, I had opened the deal flow looking at options ranging from multi-family, mobile home parks, high end homes we'd like to retire in, and various STR markets. Ultimately, we settled on the highest cash on cash returns we could get. The great house on the water would have been nice but it's not in our near future and ultimately would not be the best return on investment since we're still in the wealth building phase.

Depending on where you're at in life, decide if you want to transition to that dream property for you and your wife to enjoy with some income or if you are still building the income to pay for that property you want later.

Also find a good CPA as mentioned before but if you sold a position in crypto then you'll want to see if you can invest in ways to reduce capital gains taxes for yourself like opportunity zones.

I started networking with people on Bigger Pockets and making more personal connections talking to them.  Set up KPIs on how many people you'll try to set up a phone call with per week.  For me this started during the pandemic when weekends were spent at home prior to vaccines so I had plenty of time whereas before I would probably have been going out with friends and family.  Now it's become part of the norm to just meet new people, see what they are doing in being successful, and seeing if there is anyone you can work with and bring some of your own value add to at team.

Both, Luxury rentals if you listened to the latest BP podcast has more margin to price lower to still stay profitable. However, at the same time it will be more susceptible to a downturn overall since it's typically at a higher pricepoint that majority of STR customers won't choose to pay for if the times are difficult.

With all advice you have to take it with a grain of salt.  It's good guidance but also evaluate each unique situation.

Sacramento - Central to CA but not a destination for those out of state.  Tahoe is close, Napa not too far, and rafting on the American River is fun but what will pull people from everywhere to visit?

Phoenix - Very big area so you'll need to look at what's nearby.  Scottsdale has the resorts and nightlife (hotels do a lot of research so you can see where they are building to understand where vacationers visit).  Spring Training baseball is a high occupancy season.  Sedona 1.5 hours, Flagstaff 2 hours, Grand Canyon and other parks a little further.  Many tech companies in surrounding suburbs.  Popular with snowbirds.  Super hot summers when occupancy will be really low.  However, many will say they can make enough money in the 6 months that are super busy where the down months  don't impact profitability.

Generally, AZ is more favorable than CA for short term rentals.  Many other factors could make AZ more profitable like property taxes, insurance, and other state specific laws.  If you want to invest in CA, maybe also look at other areas that might be more attractive for STRs.