All Forum Posts by: Jimmy Woodard

@Sharonda Frazier no matter which market you choose, the best way to see higher ROI is to self-manage instead of pay a property manager 25-40% of your gross revenue. I live in CA as well but have live properties in Tahoe and Miami that I've been to once each in the past year, with Smoky Mountains and Disney World coming soon. Feel free to DM me if I can help provide any out-of-state investing advice!

@Benjamin Hartiens in Honolulu your best bet for STRs is the Waikiki area which allows it. The problem is that prices are out of whack with potential STR revenue that it's hard to find good returns.

However, thanks to technology you can self-manage an STR remotely from pretty much anywhere in the country. If you need any advice on how to do so and/or find a non-HI market, feel free to DM me!

@Steven James I'd recommend checking out Rabbu. Not only can you get an estimate for revenue potential based on your address, but you can check out free comps of other STRs near yours to see what amenities they offer and what you can add to your property to stand out from the crowd. If you don't find a lot of comps, then that means there's not really a market for STRs in your neighborhood/city.

Good luck!

Welcome to BP @Kimberly Sutor! Here are some general pieces of advice as you get started on your STR acquisition journey:

• Make sure you look into regulations in each market you're interested in. A simple google search for "[city] short term rental regulations" should do the trick, and always use the city/county as your source of truth (not a random blog post trying to sell you something)
• Sites like Rabbu and Airdna are great to get a sense for what your property can potentially generate in STR revenue. Make sure to check out comps in the areas you're interested in to see exactly what renovations/furnishings they have and how you can stand out from the crowd
• A quick shorthand to see if a property is worth diving deeper into the numbers if if the gross yield (revenue / purchase price) > 15%. There are many tools here and elsewhere to help with a full pro forma, but the gross yield is a great starting point so you don't waste too much time on properties where the numbers will never make sense (and your goal should be 15%+ cash on cash return)

Good luck and feel free to DM me if you have any further questions related to acquisition, renovation, or self-management!

@Justin Moench if you don't have a huge budget you have one of 3 options when it comes to your first Airbnb:

1. Arbitrage: This is a popular method where you rent out space from a landlord and list it on Airbnb while pocketing the cash flow arbitrage. Not a method I currently follow because you don't own the asset and it's really hard to find a landlord that'll agree to work with you, however it is an option
2. BRRRR: This stands for buy, rehab, rent, refinance, repeat. Find a cheap off-market property, secure the property with private/hard money, work with a local contractor to do the rehab, rent it out on Airbnb, secure a cash-out refinance so you can recoup some/all of your initial investment, and then plow that money into the next property. This method is not for the faint of heart because there are a lot of steps in the process that can go wrong, but it's a great strategy if you know how to do it right
3. Partnership: BiggerPockets alone has thousands of people just like you who don't have a huge budget but want to get into the STR game. Why not find a group that you can trust and pool together resources? This could be friends, family, FB group member, or fellow BP member, the point is to hustle and network to create partnerships that will allow you to purchase an STR. Make sure you set aside funds for a good lawyer to create an LLC to protect all parties.

Good luck and DM me if you have any further questions! (I'm open to partnerships myself :) )

@Saugat Ghimire in terms of STRs, I wouldn't worry too much about either of your concerns. Seasonality is only a problem if there's no cash flow. All you have to do is put some cash flow from the high seasons in reserves for whenever the low season is and you'll be fine. 

And covid is a once-in-a-lifetime event. Sure it could happen again, but even if it does there would be nothing stopping you from selling your portfolio. So what are you really losing?

If you decide to go the STR route, I chose the same path as I'm closing on my 4th property next week in the span of 14 months. Feel free to DM me if I can help at all!

@Batool Haider start with the simple question "What can I afford?" If you're putting 10% down on a property, take your budget and divide it by14% to get an idea of what purchase price you can afford. So if you have $50k saved up for an STR, your max purchase price is $357k.

This is assuming you're buying a house fully furnished. If that's not the case, take $10-20k out of your budget for furnishings and renovations and then do the math above.

From there it sounds like you're ok with investing out-of-state, so just google "best places to invest in short-term rental" and see what comes up. It didn't take long to find this, this, and this.

Now comes the fun part. You need to cross-reference these lists with places you can actually afford. it doesn't matter if Arvada has great investment potential if you can't afford it. Once you find the market you can afford, look for a gross yield (potential revenue/purchase price) of at least 15%. You can use sites like Airdna and Rabbu to find revenue numbers, but make sure to actually look into comps on airbnb to see why/how properties are achieving those numbers.

Good luck with your first STR acquisition! I'm about to close on my fourth so if there's any further advice I can provide feel free to DM me.

@Mary B. rental arbitrage is only a good idea if 1) the landlord allows it, 2) you're in a market where there's good cash flow (rabbu and airdna help project potential revenue), and 3) you're fine with none of the benefits of owning an asset

Most people who get into rental arbitrage don't have the capital to buy their own home, but you might be better off networking with other investors and/or raising money from family and friends so you can actually purchase a property. Good luck!

@Orion Izzard trust your gut. $525k for a 1bed that's only pulling in $40k will not have good numbers. The PITI alone will eat almost all of your revenue before factoring in costs to run your STR business. Unfortunately South Lake Tahoe has clamped down on STRs and the only area around the lake that will allow them is Incline Village (but good luck finding decent pricing there).

I'd suggest looking into other cheaper markets like Florida if you want to get into the STR game. It's not that hard to self-manage from out-of-state, so if you need advice going down this path feel free to DM me. Good luck!

@Juan Ignacio Barajas Hernandez your best bet is to network with other real estate investors to pull together resources and buy a property. With $13k there won't be much you can do on your own, but just imagine if you found 3-4 other first-time investors with the same drive and capital you have. Between BiggerPockets (you already found someone via @Hatem Mahgoub) and local meetup groups, the partnership possibilities are endless. Good luck and DM me if you have any other questions!