All Forum Posts by: Daniel Denning

Hey I currently use Sparkle Clean for a home in Destin but have just started testing out another cleaner (SWAT Team of Clean). So far things have been good! 

I would definitely build out a list of handymen, electricians, hvac service, etc. because speed is the name of the game with STRs. The faster you get issues resolved, the happier the guests and better reviews. You don't really have time to shop around on prices when issues arise during a stay. 

Since this appears to be your first STR, are you using any software (property management, Pricelabs, Turnoverbnb, Hostfully/Touch Stay, etc.)? There are a lot of tools out there that can really help you streamline your processes, maximize revenue and provide great communication to give a great experience for guests and keep you sane.

A lot of people who don't invest in short term rentals talk about things being oversaturated. The way I see it is if you're able to have a good property that can stand out from all the average STRs, then you can still do well if you're in the right market. I didn't have tons of cash and started out with a condo in Myrtle Beach in 2020 which many would say is saturated. In looking at the market, we realized that a renovated condo with a view would really stand out. After renovating, our condo went from grossing $40,000/yr to $79,000/yr. I manage properties in a variety of markets as well and consistently see those that really stand out having consistently high demand. Most of these properties operate at or close to 80% occupancy for the year. People that are looking to buy but not invest in standing out and putting good systems in place may struggle in STRs. 

Hey @Myrtle Mike Thompson. We didn’t have another property lined up and wanted to wait for a little slower time to buy. We did use @Yonah Weiss for our cost segregation with the intent to offset our capital gains we will owe by using bonus depreciation.

Thanks! I'm always looking out for deals and partnering. 

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $700,000
Cash invested: $150,000

Estimating conservatively to do $12,000 cash flow in year 1. Bought well below asking price but got it at 7.5% rate. Will refinance after 6 months and begin to cash flow a lot more as rates go back down over time. The property did $118,000 gross revenue last year, and we project that we can increase that after we make some improvements. We are working with a designer.

Doing a Cost Segregation Analysis and utilizing 100% Bonus Depreciation. Current estimate is a $56,000 after tax bonus.

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

We were looking for a higher value beach house that wouldn't have HOA fees. We really wanted to take advantage of Bonus Depreciation through a Cost Segregation Study, so that's how we got to our price point. We have experience managing our own and other people's STRs, so we know we can make this perform well over time.

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

Working with a local agent.

How did you finance this deal?

Went through the Short Term Shop. Put 15% down as an investment loan.

How did you add value to the deal?

New furnishings, paint, light fixtures, mural, cleaned up outdoor space, etc.

What was the outcome?

Will begin taking rentals January 2023.

Lessons learned? Challenges?

Will learn plenty along the way.

Investment Info:

Condo buy & hold investment in Myrtle Beach.

Purchase price: $213,500
Cash invested: $86,000
Sale price: $451,000

It's a vacation rental, so it's hard to say what the monthly cashflow is right now. I'm projecting to make an average of $1,000/month during COVID.

Ended up doing way better. Gross revenue was $78,000/year and we sold at height of market to invest in a beach house.

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

It was our first real estate investment. We looked for a property that had a great view (21st floor oceanfront condo) that needed work inside. We did a rehab and it did really well.

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

Local real estate agent, Ann Wilson.

How did you finance this deal?

10/1 ARM @ 4.75% (March 2020)
Did cash-out refinance November 2020 and pulled out $25,000 cash and locked in 30-year fixed @ 2.75%.

How did you add value to the deal?

We rehabbed the inside. New flooring and furnishing, paint, scraped ceiling, etc.

What was the outcome?

Sold for $237,500 more than purchase price 2 years later.

Lessons learned? Challenges?

You make the most money on STRs learning to manage it yourself. Can be headaches and take time. Otherwise, finding people to manage that will really value your property is next best route.

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

Ann Wilson (Agent)

I've also used Guesty and Hostaway and like Guesty more. It's just more robust and works well for managing multiple properties. 

My wife is an Operations specialist and is running a promo right now to find beta testers for her "Complete Scaling Solution for RE Agents" program. It's being highly discounted and helps overwhelmed agents learn to scale their business while bringing order to the chaos so they can stop flying by the seat of their pants. If anyone is interested in hearing more about it, please let me know. Thank you!

I am happy to talk with you. I manage across the Southeast.

Quote from @Levi Bennett:

I think maybe people are a bit unclear by what you mean as "client"? Do you mean other hosts? I'm a full service STR consultant/broker in North Carolina (soon to be TN, FL and possibly GA) and I've been advising on STR acquisitions for 8 years. I'm happy to connect. Most of my investors do NOT want to self manage, and we're always looking for superhosts to discuss management with.

Thank you for your helpful feedback! By "client," I am referring to owners of STRs who need/want help outsourcing their management of properties (in the form of a Co-host). I just sent you a connection request and would love to learn more about what you do and how we could possibly work together. Thank you again!