All Forum Posts by: Derek Stevens

@Garrett Brown Thanks for taking the time to share your insights and experience with a similar situation. Very helpful. These are self managed through my small STR management company.

@Zach Edelman I appreciate the feedback and the broker info!

@Michael Baum Thank you everyone for the suggestions/opinions. Here are the airbnb links if that helps get a better idea of what I'm trying to describe.

airbnb.com/h/treehouseyurt

airbnb.com/h/yurtundertheliveoaks

I had an investor ask me at what price point I would consider selling, that's what prompted me to dig a little deeper into determining what it is actually worth to a prospective buyer.

I do manage these myself through a small STR management company that I own that manages about a dozen locations.

@Michael Baum My initial question was about determining a sale price not raising capital. I appreciate the insight that you and John offered regarding the lack of value in the business itself and strictly the land + improvements.

@Michael Baum I should have clarified in the initial post- Access to capital isn't the issues, but we did struggle when we attempted to do a traditional refinance.

@Michael Baum They are stick built on foundations. There are just over 2 years of income/expense history.

Thanks for the insight. I'm not particularly interested in a commerical loan at this time.

I have an 8+ac parcel in Dripping Springs, TX (outside of Austin) that has two small STRs built on it. Both units are approximately 400 sqft, "yurt-style" cabins with large decks.

We have 2 full years of revenue history, grossing just over 100k in 2024. After some investments in amenities (primarily hot tubs), our last 3 months have averaged 12k/m.

This property is owned outright, and due to the size of the property, the small square footage of the units, and the lack of comps in the area we have found it difficult to lock down any refinancing. We have spent approximately 500k in improvements on the land in the structures and the infrastructure. We also have infrastructure in place at a build site for a 3rd unit on property.

With it being a difficult property for an investor to find traditional financing for, how would I go about assigning a realistic valuation for the property if we were to entertain a sale? From what I've been reading, cap rate is not a reliable metric for STRs.

Any insight is greatly appreciated!

@Nate Herndon Thanks for the reply. Would like to discuss further.

The property has a natural divide (wet weather creek) with a seperate entrance that could easily be subdivided or transfered to a different company.

This would bring the total acreage of the property with the rentals closer to 6ac without bringing down the total valuation of the property too much. I'm not sure if that would make it easier to finance or not.

@Devin Peterson Yes, STR is the plan to continue stabilization.

Do not own any other STRs. However, we have plans and infrastructure to continue to build additonal units on the same property and are exploring financing options.

Looking for a loan program for an 8 acre property in Dripping Springs, TX that is owned outright with two active STRs. Total income for the two units in 2024 will be right at 100k.

Credit score is 719 (business partners is over 800), but we will not qualify for traditional financing due to lack of W2 income. Looking to go more the DSCR route. Both units are stand alone structures but are small (400sqft + large patios).