All Forum Posts by: Crystal Ball

Investment Info:

Industrial other investment.

Purchase price: $2,675
Cash invested: $400,000

Leased commercial building to create a much needed small engine repair shop & commercial landscape business in Panama City Beach, Fl. Sold my condo to pay off initial investment / start up costs; hurricane Michael hit 11 days later. It's been a wild ride, especially losing both grandparents and husband having a stroke, but we are still here and going strong with clients from all over the county bringing their equipment to us for repair!

What made you interested in investing in this type of deal?

Husband owned a landscape company and we couldn't source high quality equipment or get it repaired locally at a reasonable cost or in a timely manner. We decided to fix that.

How did you find this deal and how did you negotiate it?

A local realtor helped us find the right spot on a main hwy with 55k cars / day (Back Beach Road / Hwy 98). Our landlord needed to get rid of the space; we locked into a 3 year lease right away when we heard the negotiated price.

How did you finance this deal?

Home equity line of credit and $50k cash secured a $250k equity line through bank for inventory.

How did you add value to the deal?

SWEAT equity, years of business background & expert marketing, owning our own landscape company thus identifying with our customer's own pain points, connecting in the local community through chamber events & real estate organizations, and WORK, WORK, WORK.

What was the outcome?

Still in business and now profitably after a hurricane, stroke, deaths, theft... now that we have survived a hellacious opening with everything going wrong around us, we are MUCH wiser with a strong CPA and poised for growth with solid numbers for years to come.

Lessons learned? Challenges?

Growing too fast and in the post hurricane chaos we were in caused some severe cash flow issues. There is very low profitability in retail so we have focused on the repair and services ends now. You can't prepare for the challenge of a Cat 5 Hurricane; you just have to work your way through the aftermath of it. I should have leveraged my initial credit & capital better structuring the debt in a different way.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I am now a realtor myself learning to analyze deals & running comps like a champ doing over $4M in sales in the first year! With a deep passion for our community and helping others, my goal for the next several years is to improve the connections in our area to create better knowledge and resources for realtors to help others achieve success here as well!

Investment Info:

Industrial other investment.

Purchase price: $2,675
Cash invested: $400,000

Leased commercial building to create a much needed small engine repair shop & commercial landscape business in Panama City Beach, Fl. after the only other one in town would not negotiate to a reasonable asking price to sell to us. He was out of business within 6 months of our opening. Sold my condo to pay off initial investment / start up costs; hurricane Michael hit 11 days later. It's been a wild ride, especially losing both grandparents and husband having a stroke, but we are still here and going strong with clients from all over the county bringing their equipment to us for repair!

What made you interested in investing in this type of deal?

Husband owned a landscape company and we couldn't source high quality equipment or get it repaired locally at a reasonable cost or in a timely manner. We decided to fix that.

How did you find this deal and how did you negotiate it?

A local realtor helped us find the right spot on a main hwy with 55k cars / day (Back Beach Road / Hwy 98). Our landlord needed to get rid of the space; we locked into a 3 year lease right away when we heard the negotiated price.

How did you finance this deal?

Home equity line of credit and $50k cash secured a $250k equity line through bank for inventory.

How did you add value to the deal?

SWEAT equity, years of business background & expert marketing, owning our own landscape company thus identifying with our customer's own pain points, connecting in the local community through chamber events & real estate organizations, and WORK, WORK, WORK.

What was the outcome?

Still in business and now profitably after a hurricane, stroke, deaths, theft... now that we have survived a hellacious opening with everything going wrong around us, we are MUCH wiser with a strong CPA and poised for growth with solid numbers for years to come.

Lessons learned? Challenges?

Growing too fast and in the post hurricane chaos we were in caused some severe cash flow issues. There is very low profitability in retail so we have focused on the repair and services ends now. You can't prepare for the challenge of a Cat 5 Hurricane; you just have to work your way through the aftermath of it. I should have leveraged my initial credit & capital better structuring the debt in a different way.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I am now a realtor myself learning to analyze deals & running comps like a champ doing over $4M in sales in the first year! With a deep passion for our community and helping others, my goal for the next several years is to improve the connections in our area to create better knowledge and resources for realtors to help others achieve success here as well!

I think we are all too busy for BP!! haha At least down here in Panama City Beach, Fl. there are so many deals & connections being made I haven't even had time for posting much lately! It's the same with many of the female agents & investors I am working with!

This month's topic - a case study on house flipping with hard money loan, ARV evaluation, tips & ideas, plus lessons learned by a local investor & Bigger Pockets guru!

Hi Mason! Welcome to real estate! I just got my license a few months ago but am an investor and have worked on the short term vacation rental side prior to this. We host a monthly investor meeting where you can meet industry locals to help get you off on the right track and would love to talk with you about some great options getting started. Reach out and I'll get you connected! 

Yes! I know many owners there and several of my friends own at Laketown. The location is fantastic and walking distance to restaurants, stores, and attractions. You can short term or long term rent. I work for a short term managment company so know the actual returns possible here. It is the lowest price per square foot of all condos in PCB. We have sold 4 there in the last 2 months just on our real estate team. PM me if you want to discuss further. 

Looking forward to it!!!

@Lorraine Patterson - I was a Vacasa customer then worked for them signing 80+ properties here in 14 months.  I JUST got off the phone with one of their current customers reporting $7k in damages and another customer earlier today who is searching for an attorney to sue them over fraudulent charges he can prove. I can give you my top 3 choices here locally. Vacasa has AMAZING marketing & online technology but ZERO ability to handle operations in this market.  They are my absolute last recommendation after hearing firsthand & seeing firsthand as a customer how they fail to manage the statements / maintenance. They will be losing a huge portion of business here this fall; I'm getting calls weekly with customers ready to move from them. PM me for my top 3 choices to interview. 

@Dave Rav - I would consider that too far to be considered coastal property. Any drive to the beach is not "beach" property. My # 1 priority when moving to Panama City Beach was being walking distance to the beach. I agree with @Glenna Wood 100%. @Manish Waj I know hundreds of investors who are having success in this market. You have to know the right realtors (I do after buying 3 properties with the best!) and the right PM companies (I do after LOTS of research), and the right lenders just like you do in any good market. It's definitely worth your time to look here. We are working with a number of investors on a variety of deals right now; this will be a very strong market for many years during the hurricane re-build.

Great thread and some excellent advise!  My 2% - I hired #Vacasa to manage my 3/2 condo in PCB because our friend was the GM. I'd never even heard of them, but with a new baby at the time I didn't want to self manage. I learned a lot from them because I was so new to VR & investing and was so impressed with the online marketing & systems I went to work for them. 

I signed 80 homes for Vacasa's rental program in the next year - easiest job I ever had. HOWEVER, there were major red flags all along the way - they have the potential to be an amazing company yet after allowing rampant nepotism among owners & managers in conflicting job roles, the co-founder leaving the company abruptly in 2018, and selling programs they can't back up, they are experiencing MASSIVE employee & customer attrition. Now their latest idea is to back up and sell real estate trying to compete with zillow-like platforms. They are basically throwing spaghetti on the ceiling to see what sticks - only their hands are so sticky with so many hands in the pot, the entire ceiling is crashing down. You can only buy business for so long before the cash runs out. As they gear up for an IPO launch, this would be the WORST investment you could make. Real estate is local and so is vacation rental management. It's all contingent on the communication and abilities of THE person(s) responsible for YOUR investment. 

Wyndham is #1 (ResortQuest - rumored for sale). Vacasa, Turnkey & iTrip are all of about equal size, only Vacasa & Turnkey operate like big companies while iTrip is a franchise model. IMHO the franchise model works better because it keeps everything local while still providing the needed online marketing in today's SEO race. Evolve is not a true PM company - they are an online advertising company that subcontracts the day to day maintenance & cleaning to others in market. I agree with earlier comments that the online advertising is the easiest part of the equation. The biggest struggle of managing a STR is the day to day operations because you turn often and have needy guests anxious to give feedback on a less than perfect stay.

Now that I am a realtor & business owner with investors asking advice on who to use, the ONE company I will never refer to is Vacasa. Their customers are STILL calling me because they can't get in their own unit, statements are incorrect, they are being charged insane amounts for lightbulbs (energy upgrade) that were not replaced and were told were included in their commission rates, fee structure changes to guests (in Vacasa's favor of course), squatters in units because they refuse to use door locks that provide adequate security measures, missing couches (because said door locks aren't changed even when they loose 15+ people in 6 months out of one office), broken furniture unreported, under sell the market to keep calendars booked, and on and on. Not to mention they have very bad security issues with their IT systems and never paid me for the last 11 homes I signed for them. 

If you can't self manage (which everyone thinks is easy - but it's a LOT of work so depends on your available time to devote to answering basic questions over and over, calling 3 cleaners to replace the one that called out for the 5th time in season, calling an A/C company because your guest turned the thermostat down to 65 in 100 degree weather, etc.) then either go with iTrip if they have a strong franchise in your market or a mid-size local company with a good reputation. I would also strongly advise do not use a start up PM company who has only been around for a minute. There have been people go to jail right here in PCB for embezzling money this way! Local realtors, other owners nearby, and your local Chamber of Commerce are excellent sources for referrals to the best PM companies in market.