All Forum Posts by: Dado Vucak

Rentometer, FB marketplace, and Craigslist are all good options. 

You can also look up median rents in any city with census data but I believe that is a inclusive of all housing types, sizes, bedroom/bathrooms, etc. so I wouldn’t use that to analyze a specific deal but not a bad option when analyzing markets. 

@Wes Mccullar Does the place come furnished? If not, you’ll want to make sure to account for furnishing in your calculation. General rule of thumb is around $10k/room.

Also, what expenses are you accounting for? Are you considering things like maintenance, cap ex, pest control, lawn care, toiletry, etc.

If so, 25% is amazing! I doubt you’ll find many better opportunities out there.

The one other thing I’ll add is that I like to take “calculated” risks, meaning I typically consider the worst case scenario before pulling the trigger. Highly unlikely, but say you have zero bookings for some reason.... do you have enough reserves on hand to afford the mortgage for the next 3 months? The more likely scenario might be that you have to undercut your competition when getting started in effort to get more bookings/reviews. Maybe you’re losing a few hundred bucks a month or breaking even at first. Does the deal still look attractive to you at that point?

That’s just me though, I’m sure you can make it work even if you don’t have those reserves on hand.

If that makes you question pulling the trigger on this then maybe it makes more sense to go for something at a lower price point where the holdings costs won’t be as high.

@Cameron Davis I am indeed! Well actually my wife and I just moved to Vancouver not too long ago from Portland.

But yeah, I will certainly keep you in mind.

I don't have too much to add at this point but we did just close on our first property in CDA that we're intending to use as a STR.

It's in pretty bad shape so we're going to take the "STR BRRRR" approach with it. Although we already ran into asbestos that we have to get removed professionally which sucks but thankfully there was enough in the budget/contingency to account for that though.

Make sure to do your due diligence when you’re analyzing deals, there are a lot of older homes in CDA which can come with some additional expenses if you’re not prepared for it. 

I remember looking into Avrame a little while back actually - the trio 120. I never pulled the trigger but that seems to be about the price range I remember for the materials. 

Keep in mind though, that is JUST for the materials, nothing else. Also, if I remember correctly, you are required to have the foundation in place on your own so that’s another cost you’ll have to factor in. 

On top of that, you’ll still need to buy the land itself, develop the land (bring in water/sewer/electricity, clear the lot), paving the driveway/access road. You’ll also have the obvious charges for labor, pulling permits, and I don’t think any of the kits factor in flooring, cabinets, countertops, or any fixtures (faucets, lights, outlets, etc.). 

The rough estimate I came up with after talking to various contractors and the local county building department was right around $375k ($100k for the land). That was back in late 2019 though. I think material prices have gone up quite a bit since then. 

Hopefully that helps and gives you some context. 

@Chris Brownridge yeah, we're doing more of a STR BRRRR actually. Basically tearing it down to the studs and turning a 1300 square foot 3/1.5 into a 1700 square foot 4/2.

Easton and snoqualmie definitely have lower occupancy rates when compared to Ronald but you can certainly make it work! Have you looked into Airdna at all for your daily rates and occupancy?

I’ve heard there is supposed to be quite a bit of development happening in snoqualmie too. Might be a good time to get in if you can find something that makes the numbers work!

@Chris Brownridge not in the area but I just close closed on a property over in Coeur d’Alene yesterday actually!

We got priced out of the Ronald area so we started looking elsewhere and ended up in Coeur d’Alene.

Prices are starting to drop over in snoqualmie/ronald/Cle Elum though so we’re starting to look there again too!

What market are you looking to get into?

Quick Background

Under contract on a 3 bed 1.5 bath ~1,400 square foot 1970s split level set to close this Friday, 9/17. The current strategy is "STR BRRRR". We're essentially taking it down to the studs and converting it to ~1,700 square foot 4/2.

Demo & Asbestos

We have demo scheduled in a couple weeks, however, prior to starting demo we decided to get an environmental study to test for asbestos in the building materials. The test consists of 10 random samples within the house including vinyl flooring, popcorn ceilings, wall texture (not drywall), pipe insulation, and and attic insulation.  

The results came back with only the popcorn ceiling containing 3-5% chrysotile asbestos which we'll have to get professionally removed. Not ideal but I guess that's why we factor in contingencies when doing renovations! 

Question

Given that we're tearing this down to the studs, and the fact that I will be responsible for the demo (not the contractor), I'm worried that the test did not include any samples of the drywall or the drywall mud/tape which we will be replacing and can very well have ACM . 

That being said, I have decided to get another test to include actual samples of the drywall and the mud/tape as well, however, I'm not sure how many sample are actually sufficient. Based on some quick Google searches sounds like 5 should be sufficient for the square footage of the house but at the end of the day it's just a gamble because it can be in one sheet but not the other 4 on the wall. 

What do you all think? How many drywall samples do you typically test for when doing demo and testing for asbestos? 

@Rick Buenaventura have you looked at Ronald/Cle Elum at all? About 90 minutes East from Seattle. Prices have sky rocketed within the last 12-18 months (like everywhere else) but if you can get into something for a decent price, it’s a great market to get into with year-round activities, and cash flow!

I’ve also heard there’s supposed to be some major development to the snoqualmie pass area. Might be a good time to get in there. 

You can use airdna to get a general idea of any market for free. You’ll need to subscribe to the city to get more granular data, which you’ll definitely want to do when you have a market locked down.   

I was looking in Ronald/Cle Elum before the prices spiked and was too scared to pull the trigger and now I’m kicking myself!

We ultimately made the decision to look elsewhere and after many hours of research, we decided to go with Coeur d’Alene! Currently under contract there and set to close in a couple weeks!

Best of luck! Happy to help if you have any questions. 

@Nick Beveridge I'll have to create a profile. I tend to stay away from social media - too distracting for me. Regardless, I'll make an effort to get out there in person - I'm sure that will be much more valuable anyway.