All Forum Posts by: Giani Brussich

@Jordan Dzubak

We currently invest in Topsail Island and I know others who invest in Carolina Beach or Holden Beach. All agree we are doing well and the properties have appreciated in value.

I personally believe we could be doing better if we improved our systems and continued with our renovations (which we plan on doing). If some numbers being shared by agents are to be trusted, some homes are doing very well The area is STR friendly mainly bc it has been used for vacationing, prior to the Airbnb boom. There is more competition now but the area is already familiar with it (there are also full time residents). However, like another commenter said, I also believe the area is growing bc there are investments into the nearby areas, increasing stores, restaurants, and apartment units not just the local Metro cities.

I cannot speak about STR condos specifically but we have seen users posting in FB groups requesting specific condos and agents posting condos. Happy to chat if you have any questions.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $340,000
Cash invested: $95,000

It is a small connected single family home. My wife and I (or mostly me) wanted to get as many properties as we could while the interest rates were low. We used a HELOC on our primary residence to put 10% down on the property. It was rent ready but we made updates to the furniture and backyard. It is primarily a STR but we look for MTR during the off season. However, it is not waterfront. To determine the Monthly cashflow, I did gross revenue divided by 12.

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

Money lol joking aside, I felt the area was a good overall market and we enjoyed staying there in general. Ideally, I want to leverage the Cash flow to purchase LTR to diversify our RE portfolio

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

MLS and with Sean McDonnell. Used the Home inspection to get a seller's credit along with Sean's expertise of the area

How did you finance this deal?

Conventional 10% Vacation home loan

How did you add value to the deal?

Updates to the interior decor and exterior landscaping but overall it STR ready for the most part

What was the outcome?

So far so good. All expenses covered

Lessons learned? Challenges?

Lessons learned, the cheapest deal isn't always the best deal. Ensure strong systems and budget for additional capital to enhance and update even the smallest fixes for a STR if you can. "Complaint Proofing" a house is great way to start an STR. It is much easier to rent/book a fully renovated property. HOWEVER, do not skip a deal because you do not have enough to renovate. Renovating as you go is still a good option that leaves you with an asset VS nothing.

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

Sean McDonnell

Quote from @Steve Garcia:

I also think a great benefit for you is that you’re a travel nurse. Being familiar with the needs of a travel nurse and the process for securing housing can be great value. If you have access to an agency that will use your home or future investment to house their travel medical professionals then you’ve expedited your occupancy. 

 Great advice so far but I would add one more piece on top of what Steve said and like what Steve said, it is a great benefit that you are a traveling nurse. I would get in get in contact with the current providers of the MTR you currently use or your colleagues currently use and see if they would be interested in partnering. You can provide recommendations to other nurses or market to hospitals that need housing options for the traveling nurses especially since you are already in the network and essentially an asset.

Secondly, if it is actually your primary residence, you do NOT have to put 20% down. You can put as long as 3.5% will depending on the loan options like FHA. You can do MTR, have roommates, or rent out rooms that help cover rent. However, it is important to read the terms of the loan as well as understand the laws of the state/city you are buying in. Some have restrictions on renting out rooms or time restrictions on when it can get rented etc...

Lastly, shameless plug, if you know any traveling nurses that need MTR in NC, I am interested. 

@Benjamin Furney

Hey Benjamin,

We initially had a spreadsheet of areas we wanted to invest in. Out of those areas, we researched further into the areas and found investor friendly agents to work with. We researched financing options and called mortgage brokers to find out more. We established some other criteria like “are there multiple strategies?”, “Can we carry it for X months?”, “Would we want to stay there if it isn’t booked?”. Kind of worst case scenario questions or what is the exit strategy if it doesn’t go according to plan.

We initially saved 10% down (used the second home/vacation home conventional loan) for the first property and then took a HELOC out on our primary residence to put a down payment for the second using the same loan type. As far as I understand it, vacation/investment home loans at 10% are harder to come by now.

We primarily use STR but aim for MTR during the off-season. We did not have enough capital to do full renovations so we are taking our profits and putting it back into the properties. We started at the end of 2020.

So far everything is working out well but if I were getting started in STR, I would renovate or value add right away if I had the capital. It is not a must but it is makes everything easier.

@Molly Paprota

Hey, OOS investor from NYC suburbs. We only have a couple of properties but we did not physically walk the properties. We had a trusted investor friendly Agent walkthrough and send pictures,videos, and FaceTime. We did the same thing with renovations except with the contractor. Videos and regular picture updates. It is very similar to buying a house in state. You go through the same processes but you get comfortable via constant picture/video updates vs various on site visits. Coincidentally, I want to invest in Columbus, Ohio for LTR in the future.

Like others have advised, build/find a good team and start smaller (don’t overextend). You can always expand or scale up from there. Ask a lot of questions until you are comfortable but bet on yourself and take action. Good luck. Happy to answer/help where I can.

What you may want to look into taking a loan on your 401k. You will pay a higher interest rate but you are paying it back to yourself. However, not all financial institutions/401k plans offer this, it is usually about 50% of the total asset value, and there may be a fee. Definitely will have to run the numbers and see if it makes sense.

Thank you to everyone who commented! This is exactly what I was looking for and many great points by all of you! I appreciate everyone's comments and this has definitely broadened my outlook towards STR.

Quote from @Mark S.:

@Giani Brussich Would you want different people coming and going in the house next to yours every week? Many who are just fine but also the occasional partier, parking multiple cars in the street in front of your house and staying up late creating noise? People have no connection or interest in the neighborhood but are just there for a brief stay? Maybe you would but I sure wouldn’t. I own a number of vacation rentals in several markets, so I am not against short term rentals at all. But I am against them in residential neighborhoods where owners make their permanent home and raise their families. Areas with exceptionally large lots might be the exception, but otherwise there is a time and place for everything.

I agree about not wanting them in mainly residential areas. I was mainly referring to mass blame for overall economic situations in real estate. In any case, thank you for your response and I agree with your points.

Quote from @Dan Maciejewski:

Nope, you've got the gist of it. Direct neighbors will often complain about the STR next door if the owner keeps booking parties. Honestly, even one loud party can leave a bad taste in people's mouths.

You will often hear people say that investors are coming in and driving prices up.  Which is odd because it's usually the investors that have a driving need to keep purchase prices as low as possible.  It's the people that treat mortgages as free money that muddy the waters and bid up houses hoping that an appraisal will bring the price down.  Not so much in the past 2 years, but that's a big strategy when it can work.  And there are still Realtors that think that's going to work so they tell the buyers to do that.  So the investors now have to outbid the owner occupants that didn't really intend to pay what they bid.  

It's mostly just a case of NIMBY from people that will stay in a vacation rental home when they travel. They don't think it's the same thing in their backyard as when they stay in a cabin in the mountains.  I point that out to the people that I talk to.  There are a lot of people in Clearwater/Pinellas that go up to the mountains in the summer then complain about all the  visitors here on the beaches when they come back home!

Thank you for your reply. The parties and bothersome guests I understand being upset about as well as it is mostly likely from STRs. However, majority blame on STR investors for difficult economic real estate environments is what i don't get. I find it odd but I guess it is one those things were one bad experience is enough to generalize for the whole industry.

If this is the wrong place for this, please remove it.

Recently, I have seen a lot of threads/posts come up on social media (I know, not very reliable or the truth) about how bad/hated STR is for local neighborhoods. With reasons such as taking away housing supply, greed, lack of interest in the local politics, taking away long term rentals, increasing overall home prices, rowdy guests, regular turnover, taking away opportunities/money from locals etc… What was most surprising is how many people agreed. In my opinion, It doesn't make sense. The arguments seem to be half thought out and I don't understand how most of the complaints are solely due to STR or even applicable except with some like high traffic/turnover or rowdy guests. I always try to be empathetic and understand the other points of views but still.

Am I missing something? Please help me understand if I am. Thank you