All Forum Posts by: Jacob H.

@Thomas Patton

We've been exploring the realm of Airbnb arbitrage as well. We actively run an airbnb out of our house as well and I'll tell you that to get started, comparing the airbnb to similar listings will get you a good starting price. If you excel and go above and beyond what the others are doing to truly provide a 5-star experience, you'll find yourself demanding a higher fee each day and no shortage of people willing to pay (granted, you have an airbnb in an area with high demand). We've found the most difficult part of the arbitrage is finding people that are willing to let you sublet as a short-term rental. As long as you continue to pursue, you'll eventually find someone that'll let you do it though.

The power that money has over time; time is what truly allows income turn into wealth. The earlier you start, the longer your money will be able to work for you. Many investments have the power to multiply your wealth over time, and real estate is one of the best.

Agreed with what other are suggesting. It is a business and you own it. Yes, it's a mutual relationship but you've been improving the property to increase the livability and overall quality of life. I think it'd be difficult to find a market right now where there aren't people begging for a unit to live in because of such high demand. If they want to make a big deal out of $20, you should just give them the option to leave and find someone else (I bet they won't leave). Besides, you already mentioned that they aren't really the type of tenants that you'd be happy dealing with for a long time.

I agree with what the others have mentioned. Markets are hot and competition is fierce so that can add challenges to purchasing a home. However, to get started in real estate investing, it doesn't always mean you have to purchase a house. If the market you're in is too expensive and you can't move anywhere cheaper, you could consider doing a house-hack type of investment if you are able to sublet a portion of your apartment (not sure how many rooms you have). Anyway, there are multiple strategies out there and surfing bigger pockets forums and podcast episodes will certainly help you get creative. Knocking out that student loan debt will help a lot I'm sure.

@Vann Calhoune Still working it! The tenant leaves sometime this month and we sent up the application for the unit. The landlord wanted to see our experience so it helps that we have an airbnb in the basement of our primary residence right now. Anyway, we're negotiating the month-to-month lease - this is pretty important for us to get just in case it isn't as successful as we expected.

I think the advantage of arbitrage comes in when you don't feel like putting the down payment into purchasing a house. Additionally, if you're trying to avoid having additional debt to your name (depending on your long-term strategy and why you're trying to accumulate additional cash), this could play a factor. If you're simply just trying to add another stream of income without putting any significant cash down and lowering your DTI, I think arbitrage could be a strategy.

It's a mixed bag on opinions for STR arbitrage. As long as you run the numbers and they make sense, I'd say go for it. I'm currently looking to do the same and to reduce my risk, we're asking for a month-to-month lease at first - until we can ensure it will be successful. Hope this helps.

Hey John,

You'll get all kinds of answers and opinions on the best places to invest. I think what's really going to determine the best location is to determine what your chosen strategy is. Are you trying to house hack? Buy and hold? Flip? Are you interested in SFR? Small or Large multi-family or another type of commercial real estate? From there, you can look deeper into where to purchase.

@Eric Frith

Eric, I purchased a home in November of 2020 in Fountain, CO, which is right next to the springs. I felt a bit hesitant at first considering how crazy the market is right now. I kept hearing all of the "experts" and "gurus" saying that the bubble was about to burst and the market was about to crash. I hate the fact that renting doesn't provide the same benefits of owning in multiple facets; I decided to buy anyway. What I did decide to do was find ways to reduce my risk in the event that there really was a bubble right around the corner (which nobody actually knows if/when). I made the plan to airbnb the basement, rent out the garage as storage, and rent out one of the upstairs rooms to a long-term tenant. This way, the house is being paid off by others and in a time of turmoil, there's an added buffer of safety. In addition, I also wanted to ensure that if the bubble was to burst, I would still be able to make the monthly payments without the house hack and be able to hold the house long enough for the value to come back to the purchase price. If you're able to afford the house with your W-2 and are making income on top of that by house hacking, you should be sitting in a good spot.

Eight months later, the house has appreciated quite nicely and all of the nay-sayers are wishing they would've bought. The point is, you never know what's going to happen with the market for sure but there are ways to reduce your risk no matter what. Have you explored the option of house hacking? The rental market around here is in quite a large demand.

Hope this helps.

I currently house hack an STR in the basement of my home in Fountain, CO. It's right on the border of Colorado Springs and as many know, the city (both the Springs and Fountain, are growing rather rapidly). During the summer months, increasing the nightly rate is rather easy. The rate needs to be reduced during the winter months to continue business but nonetheless, the demand is still there. I think STR has a bright future in the Colorado Springs area for sure.

I would also be interested in meeting up in the area.