All Forum Posts by: David Bergmann

I would recommend looking into FurnishedFinder.com & Gypsy Travel Nurse Facebook Group.  Travel nurses will typically receive an assignment for 13 weeks in a city, and will have a stipend for their lodging while there.  They are mostly single female, maybe with a pet, and will want a safe location and probably nothing too big to have to maintain.  You probably won't get the profit margin you'd expect with shorter term stays (airbnb, vrbo, etc.), but in return you get the safety of 3 months of not having to manage it :)

A strategy I use is to do a search on AirBNB of properties in your immediate area with comparable specs (2 bed, 1 bath, entire home, kitchen).  Then click each one as if you are going to book and discover the cleaning fee that they charge.  Put all of these in a spreadsheet so that you have 10-20 comparable data points.  Throw out the outliers - people charging way to much or very little/nothing at all.  Look at where it looks like the average / median is for the majority of those properties, and that should really be the basis for the fair market rate.  Then when you have the pricing discussion with prospective cleaners, you can have this information in your backpocket.  If they propose to high of a price, I will typically say something along the lines of "Hey, I'd love to pass a $150 cleaning fee onto our guest so we can pay you as much as possible, but unfortunately our competitors on AirBNB are only charging $X, and in order to be competitive we've really got to stay as close to this price as possible."  

I use the following:

• AirGMS as a channel manager to manage automatic messaging & manage turnovers with cleaners
  • Free for up to 4 listings
• Outswitch for managing pricing rules
  • Less than $50 per month for 7 listings or les
• RBoys Rental Lock Automater to manage electronic door locks
  • One time $100 payment for source code
• Quickbooks for managing the books
  • $10 a month

I have 4 listing right now and I pay $60 a month for software.  I am a big advocate for paying for software that is charged on a flat basis rather than a percentile of revenue.  Consider that you are making, on average,  $10,000 of revenue over 4 listing.  If you use a channel manager and a pricing software that take a combined 4% of revenue, which would be pretty typical (Guesty + BeyondPricing), you would be paying $400 a month.  I just don't think they provide enough value over the flat pricing model softwares to justify their expense.  The only thing I could potentially see as worth the cost is Beyond Pricing, because they could potentially increase your top line revenue better than you could using your own pricing strategies / rules.  But I think even that would really just depend on how savvy you are personally in revenue management  and knowing your market & local events.

Hope this helps, best of luck!

I haven't done the delayed financing into a refi, but I would think the biggest downside to this approach would be the double closing cost. Another thing I wanted to mention based on my experience is that if you BRRR using the HELOC as your primary means of financing...the balance on your HELOC at the end of the project will show up on your credit report as revolving credit. Depending on your situation this may lead to a big downward movement in your credit score at the exact time you are needing to refi. Just something to keep in mind.

I just talked to a bank about this today. I am in the same situation - I have a property that I own outright they I put some cash into to make Airbnb ready. I have been waiting 6 months to do a cash out refinance based on appraised value. I knew that I was going to likely be pushing the DTI on this, so I have a lease agreement between myself and my LLC. The LLC is technically the leasee and making monthly payments to my personal bank account. The person I spoke with at the bank seemed okay with it as long as I could provide the lease and evidence of the payments (6 month history).

Equity for us.

We've looked into arbitrage and found a very limited supply of rentals in our area that would be up to our standards for an AirBNB.  Of those that met our criteria, 80% were managed by property management companies that have absolutely no incentive to discuss this arrangement.  The other 20% were owners I was not able to persuade to try this out.  Most just want to continue doing what they've always done.  Maybe it works for someone more sales oriented?

My 2 cents, maximizing your multiplier is not going to be the best long term strategy.  The highest multipliers tend to be in the cities with the largest amount of regulatory scrutiny.  I think the optimal strategy will be to find cities that have good returns, maybe not the highest, but that also have minimal regulatory risks.

Nashville, Charleston & Asheville are great examples of cities that have some of the highest returns, but the regulatory risk is so high that it might not be your optimal city to invest.  What you'd really need to do is calculate a risk adjusted return for the city, and see what cities are best from there.

I wonder, as these companies begin to gain a significant share of monthly transactions, what will real estate agents as a whole will do to try and fight this?  Lobby for regulations?  Lower or change the structure of their commissions?  Find other ways to get these sellers back?

The best way to increase occupancy is to reduce your prices.  I would cut the rate to be equivalent to  1/1 units in your area just for Sunday - Thursday.  Also, I would allow 1 day bookings when you are a week away.

@Levi Lane - Thanks for the recommendations.  I'll take a look but this one may not be something they are interested in.  This is an old home in downtown Columbia (29201).

@Will Gaston Hey Will, I can definitely provide a little more info on the scope of work...It is a two story duplex (4 beds, 4 baths) located in downtown Columbia (29201) and is recorded at 1919 with the city (but could be older).  The property won't need to be gutted, but probably very close to it. All mechanical systems need replacement.  We are planning to apply for federal/state historic tax credits and will need to preserve the historic features of the property as we rehabilitate, someone with experience in doing that may be better suited for the job.  

@Jorge Roman Thanks for sharing.  We actually like to stay very involved in this step and I don't think we'll want a middle man in between us and the GC.