All Forum Posts by: Dan Lucchesi

Kyle,

I haven't done any STR's in Durango specifically. It would be nice that close to home. However, we try to target markets with the best returns. Durango, has a lot more seasonality that you would expect, from what I've heard from others in the STR management and cleaning fields. Durango is more of a summer market believe it or not. It hasn't seemed like a good enough return given the high prices of homes around Durango.

We should talk off line. I'll send a private message and share my phone number. 

Hey Kyle. Your post caught my attention. My wife and I invest in STR primarily. And, a lot of my real estate brokerage business is oriented toward investors. I'd love to participate. And, it may not be quite the right fit, as I'm a fair bit farther West in Southwest, CO - Durango specifically. I'd still be happy to network by Zoom if that works?? Perhaps with the lower population density (fewer investors??) a SW CO virtual meetup may work better anyways??

Investment Info:

Condo buy & hold investment.

Purchase price: $405,000
Cash invested: $15,000

It is a modest rehab and hold for short term rental strategy. We bought it in August 2020 and work with some close friends to provide 3rd party STR management. It cash flows very well.

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

The cash flow and secondary benefit of personal use.

How did you finance this deal?

2nd Home loan.

How did you add value to the deal?

We rehabbed and also furnished the property.

Quote from @Louis Louisius:

Quote from @Josh Young:

@Louis Louisius

#1 - Increase your minimum length of stay.

#2 - Lower your rate during the week.

 but won't this decrease my ability to book weekends?? 

Extending the minimum stay could lead to fewer bookings, and you would need to experiment with that to find out for sure. I think the most important one is that your weekday rates need to be lower than your weekend rates. I’d say that’s very important.

As others have said, there are plenty of lenders that can finance STR's with proved out (6-12 months) of income. However, there are also some (much fewer) lenders that can finance STR acquisitions based upon pro-forma STR rent analysis. It's basically the same process as how a lender can get a pro-forma of long-term rental analysis from the appraiser, but using STR income instead. This would be a Debt Service Coverage (DSCR) loan. You'll want to call around and be very specific about what you're looking for. Alternatively, you may be able to qualify the loan using a more conventional LTR rental analysis, even though your investment strategy will be STR. Just make sure a lender doesn't have a LTR lease as a condition of financing.

Quote from @Jenny Kao:

Hi all, I'm a newbie to real estate! Currently, I'm looking to buy my first rental property. I'm looking at single family home (3B2B) or condo in either AZ or CO. However, most single family home price seems to be out of my range (low 300) and condos all have high HOA fee, which I'm not sure down the road if it's worth it. Should I be looking at other states instead? Seems like there are a lot of experts in this community, therefore just wanted to get some thoughts. Thanks!

Jenny, I am a realtor and investor. I have done conventional long-term rental (LTR) twice before and ended up selling both of those. We have owned a very successful short-term rental (STR) in CO for several years and are under contract to acquire another in New Mexico. Our net cash flow is far greater under the short-term strategy and we have a system that works for us. Focusing on vacation destinations without heavy-handed STR regulation is the key. Denver, for example fits that, however, they have some difficult regulations around STR, but many of the surrounding metro communities are more easy to work with. Do you have the tools to analyze potential opportunities when they arise? Are there specific markets in Arizona or Colorado that you're specifically considering? And, are you focused on LTR or are you considering STR also?