All Forum Posts by: David Lewis

Interesting reading the first few posts on this thread....

I would pull out of the Vacation Rental game for the next few months and suggest STR's to travel nurses and such.

Get creative.

Hot tip to those who invest in vacation rentals: Travel nurses are always looking for furnished housing.  

@Chelsea Gulling late to the party here, but i'd be interested! 

Devin,

Coming from Alaska, Vacation Rentals are a lot more attractive due to high property values. I like the hustle and hospitality behind Vacation rentals, so the extra work is worth the bigger return over long term tenants. I am currently looking for a multifamily property using the same strategy. A couple things:

1. Have you considered going the FHA route and lowering that down payment?

2. To Lauren's point, it is very expensive to fully stock one, let alone two properties. I would recommend living in one unit, AirBnB the second unit, and ease into another unit over the next year. 

3. Check out AirDNA for local Vacation Rental comps. I typically factor 70% occupancy and I am always looking at other hosts for how they price. No need to reinvent the wheel, find a good host in your city and copy what works for them.  

Thought Experiment:

1. AirBnB was founded in 2008 around the height of the Great Recession. In the past 12 years, the travel and leisure sectors of the economy have exploded. There have been various dips in the economy, but the modern Vacation Rental/STR market has not been truly tested against a major downturn.

Hotels/Resorts have historically taken a large hit during economic decline, BUT do Vacation Rentals get lumped in with hotels OR do they offer a cheaper alternative and continue steady?

2. Markets set aside. The Vacation Rental season is almost upon us (Alaska), and unless you’ve just come back from off the grid, you likely have heard that a COVID-19 “pandemic” is also almost upon us.

As a STR owner myself, I am curious. There is no historical precedence for modern STR's and platforms like AirBnB during a "crisis" event. How will the escalation of COVID-19 affect the STR market? Will it affect an AirBnB IPO in 2020?

***Note: this is not intended to stoke market fears or COVID-19 fears. It is strictly curiosity and the unknown pertaining to the Vacation Rental and STR market.

@Jamie Rose that puts long distance real estate investing to another level. I’m sold

Niyi,

I was born and raised in Louisville with exposure to many contractors. I highly recommend Forrester Home Renovations.  I have worked extensively with Jason and his team in the past and it has set the bar high for GC's. Let me know if you have any questions, best of luck in bourbon country!   

Victor,

Congrats on the VA loan and thanks for your service. I recently purchased a SF home with the VA loan and house hack between AirBnB and a roommate, which has covered my mortgage for 7 months now (living for free in Alaska). As for your questions:

1. Bottom line it is difficult to see immediate cash flow from a VA loan due to the nature of zero down, VA inspection, and owner occupied regulations. BUT it is an amazing tool to take that first step.

2. The repairs and CapEx rates you laid out are fairly conservative for a remodeled property. Not sure if a 2-3% drop would significantly add to your cash flow though. Better conservative than realizing down the road your property is losing money.

3. You are never leaving money on the table with a VA loan. Depending on your area, you are entitled to around $425,000. Although your lender may only approve for $200 right now, you are still entitled to $425. So if you buy a property now for $200, you still have $225 to buy another property. Technically you could have 4 properties if you buy one every year for $100,000. There are more details, but the VA loan is not a one time use deal.

Hope this helps! Cheers.