All Forum Posts by: Filipp Nesterov

Quote from @Avery Heilbron:

hey @Filipp Nesterov STR numbers have become pretty tight in the area and in general. Also banking on that could possibly be a bad move. Making sure it works as a long term or furnished rental is a better strategy. Airbnb is also much more effort from a property management perspective and a lot more up front costs especially if you want a winning property. It's not just about looking nice or having nice furniture. You also need top notch amenities or location or both.

Happy to discuss with you over the phone as well! I will send you a PM

Hi Avery,

I completely agree with you! Nowadays, good photos of a house are not enough to attract guests. I don't have any experience with Airbnb yet, but as I mentioned in another reply, a friend of mine has had great success with STRs, and he has built a system around it. So maybe we could partner up to try it out with our future house. Your comment makes complete sense to me! Thank you so much!

Quote from @Nadia Bareisha:

Hi Filipp! I am a local real estate agent, I have helped lots of investor clients and have some insight into our market having lived in the Triangle for 17 years.

Wake Forest is a great area, with lots of good school options, and lots of growth happening, just like the entire Triangle area. If your time horizon is 3-5 years, I would consider buying your primary property in an area and with features you prefer for yourself, rather than a less desirable home in hopes to STR it. My reasoning is - buying two homes in the scope of several years will have additional closing costs you might not be thinking about as a new buyer (you will essentially pay around 8-10K each time you buy a home). Plus, if you plan to leave the country in 3-5 years, managing STR as a business model becomes complicated and/or expensive (STR property managers charge 20% fee or so on the properties they manage).

In your shoes, I would also try to buy now, before the buyers we have sitting on the sidelines due to high interest rate emerge in droves once the rate falls, and bid up prices. I would also do my research into how much LTR could bring for a home you will buy as a primary for the time being. Depending on your preferences and tolerance, you can rent a room/bathroom in your home temporarily to bring some income to help with the mortgage.

If you have a desirable newer home in the area people like with good schools, you will have no problem renting it in the future.

Some more thoughts on STR possibilities - most properties in our area, that are not in HOA and have no restrictive covenants, will be older homes, thus potentially requiring more repairs and capital for large ticket items. Are you handy? Can you renovate, and do cosmetic improvements yourself?

I'd be happy to grab coffee and discuss in more detail!

Hi Nadia,

Thank you so much for the detailed response. I really appreciate it.

We are primarily focusing on newer homes or new constructions to avoid investing a lot in repairs. We already found a couple of good options that have HOAs, but most of them don't have restrictions on LTR or STR.
We are looking for a house that will be good for STR since we most likely won't live in the house even for three years. We are also looking for something near schools since we have a five-year-old daughter who will be starting school this year.

The reason why we are primarily looking for STR-homes is that they are more profitable. Renting in the same area for the same type of house won't even cover 75% of the current monthly payment for the house.

By the way, it would be great to grab a coffee and discuss more details.

Quote from @Zach Lemaster:

@Filipp Nesterov

How confident are you in your STR numbers? Sounds like that could make or break this strategy for you in the future. STRs can vary significantly & we've found that it takes about ~3 years of STR activity to optimize income with repeat guests, online visibility/activity, etc.

My recommendation is to go with strategy two to live where you want and find a way to get into the rental game another way with a partner or another way.  Maybe you could turn that into a rental eventually?

Hope this helps. 

Hi, Zach,

Thanks for your advice!

I don't have any experience with STR yet. My plan is to try the AirBnB Bridge Method while living in our house for a year or more, to gain some experience. Some of my friends who have successfully done this are willing to help me figure it out, and we might even do it together as partners.

Thank you so much for not passing by and sharing your opinion and advice! I really appreciate every comment! Thank you so much!

Quote from @Theresa Harris:

Have you thought about buying an older home (by older, I don't mean 50 years old, just not brand new) that is a starter home and living in that for a few years until you save up to buy your forever home? It would be similar to option 2, but buying an option 1 type home. You could also look at a duplex where you live in half, do AirBNB in the other half and in a few years, you rent out both sides.

If rent is only slightly more than buying, you have to remember the benefit with buying is in 25 years, you have no mortgage to pay for and your housing costs go down a lot. With rent, you are paying someone else's mortgage (and taxes). If you are planning on moving in under 5 years, I would rent.

Hi, Theresa,

Thank you for your response and advice!

Regarding the rent vs. buying:

We have already found several homes, and all of the houses we like are 75% more expensive than what we currently pay for rent. But we need to consider that we found a very good deal on rent, and next year the price will definitely be increased, which will narrow the gap between renting versus buying.

As for the purchase of an older house or a duplex, when it comes to old houses, there is a significant difference between new and very old ones, meaning that there are no relatively new houses available within our budget here. Everything is either very old or very new. And, of course, if we were to buy something old, we would have to invest a lot of money in renovations, which we don't want to do. 

As for duplexes or multifamily homes, they all start at a very high price within the area where we want to live. Currently, there are limitations. If we didn't have restrictions regarding schools or the specific neighborhoods where we want to live, we could go further away from Raleigh and explore other options. However, we need to stay closer to the city.

Once again, thank you for your advices!

Quote from @Cory J Thornton:

@Filipp Nesterov - Everyone needs to do their own due diligence, find their own risk tolerance, and make the decision that is the best fit for their scenario. 

With that said, I don't like seeing folks invest in property with the intention to use it as an STR unless the property would also work as a long term rental or their income is such that if the STR market was hit or the local laws changed, they could convert to an LTR and make up the negative cashflow out of pocket to keep from losing the property.

Wake Forest is a fantastic area. They have a ton of development headed that way and some great projects under construction in their downtown area. You are correct, in most parts of our market, it is less expensive to rent than it is to buy. 

There are a lot of financial discussion and conversations about overall goals that would need to be had to offer much more advice ... but at a high level, that my two cents. 

Best of luck on your real estate investing journey. If there is anything we can do to help, feel free to give us a shout. 

Hi, Cory,

Thanks a lot for your reply. I really appreciate your thoughts on this.

You're right about making sure a place works out as a long-term rental, not just for Airbnb. That's a good point and something we hadn't thought about much.

We also agree that Wake Forest seems like a great area with a lot going on. It's good to hear you say that too.

Renting is much cheaper than buying right now, but we're also thinking about how a house in Wake Forest could be worth more later on.

We'll definitely discuss our money more and what we want in the future, like you suggested. Your advice has given us a lot to think about, and we might need more help as we figure things out.

Thanks again for your help.

Quote from @Account Closed:

Send me a DM I have a lender reference with competitive rates that can fund you on this deal. Best you discuss directly with them.

 Hi, Anthony,

Thank you for your response!

We currently work with several lenders and are exploring the best strategies to move forward.

Hi everyone!

I apologize for the lengthy post!!

We are currently living in a rented apartment in Cary, NC, but we are thinking of buying a new house. We have some questions that we need your help with.

We only have enough money for a 3.5% down payment, which means we will have to get an FHA loan. The average house in the area we're interested in costs around $500K (Wake Forest, NC).

We're not sure which strategy is best for us:

1. Buy a house in an "Airbnb good area" (not where we want) that is good for renting under short-term rentals (STR). We would live in it for at least a year (as required by the FHA loan), and then move to a rental house in a good neighborhood with good schools. We could then rent out our purchased house to make extra income and accelerate depreciation.

PROS: The cost of homes that would fit under STR is $100K less than the homes we're considering as our permanent residence. If the interest rate stays at around 5%, it's possible that renting near good schools will be cheaper in the next couple of years. The purchased house will also help in writing off taxes and bring additional income.

CONS: We would have to live in an older house for a year, and there is no guarantee of good schools. There might also be potential renovations to be done.

2. Buy a home to live in a good and up-and-coming neighborhood (Wake Forest, NC). We think that real estate prices will rise, and investing in the house is guaranteed to pay off in the years to come.

PROS: Good schools are available in the area, and the growth in our area on housing is predicted. Everything is developing, and in a few years, the price of a house will be higher for 20-30% more.

CONS: Right now, with interest rates, the house is more expensive than renting. This means that less money will be left over for potential STR investments in the future, with no extra income and depreciation on this one.

For clarification, we plan to live in another country in 3-5 years, and by that time, we want to have a source of income in real estate.

We would love to hear an outside perspective, especially if you've been in a similar situation.

Thank you in advance to each and every one of you for your help!

Hi there,

My name is Filipp, and I've been living in the USA for about 8,5 years. I spent 8 years in Boston, Massachusetts, and recently moved to Cary, North Carolina. I run a moving and storage company in Boston, MA, and plan to open 2nd location in North Carolina. 

However, since it's a seasonal business, I decided to explore Airbnb arbitrage to create an additional source of income and eventually move towards real estate.

Unfortunately, I don't have enough money to purchase any property at the moment, but I am hopeful that Airbnb arbitrage will open up more opportunities for me to enter the real estate market.

I will be extremely grateful for any advice. If someone already has experience with Airbnb Arbitrage, I will be thrilled to communicate, and I will try my best to be helpful from my side in any way I can.