All Forum Posts by: Colton Fairchild

@Jacob Hinchman only way this will work is if you self manage. If you are planning to use property management all your profit is gone.

Look on Airbnb and VRBO for similar properties in your area. Check their calendars and rates to know what occupancy rate is reasonable in that area. I prefer doing this rather than solely relying on the Airdna data.

If you and your cousin have enough funds to purchase your first property then just do that. This way you will get experience before adding other people and their money into the mix. As @Taylor L. mentioned, creating a syndication fund for one property is going to be far too expensive. You could always create an LLC between you and your cousin... just determine ownership percentages (ex. 50/50). I'd reach out to a RE attorney or CPA though.

The ability to produce much greater cash flow than long term rentals.

Using the property occasionally is a bonus.

@John Underwood I like this strategy. Would you try for a 10 yr. balloon on the 30 yr. amortization? Or what timeline would you suggest for the balloon payment?

@Alexei Rudometkin

The high property management fees are why many people end up selling their vacation rentals... but 25-35% of gross rental income is pretty standard for vacation rentals anywhere. Have you had a couple of management companies there run an analysis of what they think your property will rent for?

As you mentioned, the other option is to self manage... this is a great option if you have the time to communicate and coordinate things for you property (cleaner, maintenance if needed, guest interaction). That really comes down to if you are comfortable with self managing and if you think you can reach the revenue number you need.

@Jarib Rivas

This is difficult to answer because there are so many real estate markets in the US and each are impacted differently. While some areas are slowing down, there are still many places where you can find deals. Of course, buying now or waiting until the market seems more stable is the question everyone is thinking about. People have been expecting a RE correction for the past 3-5 years now but the overall market has increased substantially. Consider yourself asking the same question 5 years ago and not purchasing a property because you know the market correction is coming eventually... if you are buying solid assets and not over leveraging then you will be okay.

Regarding the stock market, it has been very volatile lately but the S&P 500 is still at ~ 15% YTD return. If I understand your post correctly, your 401k is invested is one specific REIT. I would highly recommend diversifying your investment portfolio... especially as many REITs can be volatile. If you are worried about the current market, I would take some time to evaluate your risk tolerance. See if it matches the investments you have OR if a change is needed.

@Andrew Postell great to meet you as well! Thank you for the detailed post about this topic. I’m going to message you regarding some specifics of what I’m trying to accomplish...

Does anyone have experience creating their own hard money lending company for the sole purpose of doing the debt financing for their own investment properties/private equity fund?

Ex. PE Fund raises $1mm as equity financing to purchase rentals. Ideally, would also like to create a separate entity that serves as a HML for the PE Fund.

The goal of this would be to have greater control over the lending to benefit the PE Fund (Referring to more control over loan terms, LTV limits, etc).

Would love to connect with anyone who has experience with this...

@Joe Rivera the basics like professional pictures, very detailed listing, and quick communication are some of the most important things since you do not have reviews yet. Many hosts fail to even do these things well.

Look for other vacation rentals in Galveston that are listed on Airbnb. Which ones have the most 5 star reviews and are consistently booked? Study what these people do with pictures, price, etc.