All Forum Posts by: Collin Hays

I'm looking at the numbers and with interest rates seeking 6.5. Housing prices the way they are and cleaning fees can anyone make money on str in long beach if they get in the game now?

If all goes well with Monday's post-repairs inspection, we should close later in the week on a cabin that we want to use as a getaway for us + STR when we're not using it. It was a new build, shown completely furnished and the builder listed it for use as a STR after we saw it. We knew the place was special, that's why we jumped with a full-price offer. We had no idea just how many other people would think it's special.

The next available weekend is June 6th! There are bookings for the other weekends in June and only five random open days in March. While this is a good problem to have, I'm starting to stress about it for a few reasons I'll put below. I want to note that bookings will transfer, but we're under no contractual obligation to honor them. I'm trying to figure what the best thing is to do moving forward.

Reasons why I'm stressing:
1) There's a drone photo showing no other cabins around. It looks completely isolated. Except that this spring there's going to be a cabin built next door. By fall there might be others. Imagine showing up to a cabin you thought was isolated and finding construction going on?
2) I don't like the idea of renting out a cabin I haven't stayed in myself. I don't know if there's anything missing. It will be a royal PITA to do a one-night stay on a random Wednesday, but it could be done.
3) It's currently listed as pet-friendly with only a $30 pet fee. I'm highly allergic to cats (like super-allergic) and also allergic to most dogs. An extra $30/stay isn't enough for me to have to make myself a zombie on Benadryl in order to sleep there and not wake up with my eyes swollen shut because someone let their dog sleep in the bed.
4) I think it's been priced too low. It's led to incredibly high occupancy rate in the off-season, but I'd rather have a slightly lower occupancy rate in order to reduce wear and tear and leave some weekends open for personal use.

I'm at a loss on what to do about this. On one hand I like that it will probably cash flow (we expected to break even at best) and know there's issues with canceling reservations. On the other hand, I want to be able to enjoy this place too. Any suggestions? How have you handled it when you've purchased a popular existing STR?

Yeowzers, 8X annual revenues..... I'm gonna have to start calling ya "Money-Bags Collin". 

I don't care what kind of business it is, STR, Hot Dog stand, any biz I am NOT paying 8X annual gross revenues, no flippin way!

3X is a GREAT entry for most as long as it's not a sinking ship or with crushing overhead and miniscule margins. 

4X-7X is a normalized range for acquiring many different business's. 

 Thanks, Matt! Makes sense. I'll look out for local banks in my community and start some conversations. 

Thanks @Collin Hays! More favorable terms sounds great to me, and I've heard this strategy before, but I'm not sure I understand how it works in practical terms. Could you share an example or two how that actually works in practical terms? For example, I've used several banks for loans: Flagstar Bank, All Western Mortgage (a broker), PenFed Credit Union (HELOC), NewRez and probably a couple others I'm forgetting. None of which I never actually met in person. But are you saying to find a local bank branch and physically go in and develop a personal relationship with a banker? If so, how many deals/loans do we need to do before I can expect more favorable terms? How do you know which bank/banker to establish a relationship with? What if I like a banker but another bank is offering better terms on the first couple deals? I'm having a hard time wrapping my head around how to actually make this happen in today's world. Thank you!