All Forum Posts by: Joe P.

Summers in Jersey actually start in May and run through September (even first couple of weeks in October, weather pending). It's closer to 5 and 5.5 months if you can believe it. Some people will book weekends in April even if they "wanna get away" somewhere that isn't a casino and can take strolls along the beach, weather permitting. And if you look at most Jersey Shore towns on AirBNB...there's a ton of them. People are making money for sure. The town sizes are so small (3-5 blocks) and everyone in PA/DE/NJ/SENY flock to these towns...businesses, hotels, AirBNBs, restaurants...they're seasonable but stick around. The money is there, I'm just trying to be realistic on how much there is :)

This is true on all accounts. I included $120 PMI on my PITI which is about where I think I'll be. The season is shorter than other locales, but the demand is gigantic in the summer. My guess is I'm averaging $150 a night off-peak (November through March), $200 mid-peak (April, October), and probably $300 per night during the summer season (May through September)...with high vacancy off-peak months. The town, like many Jersey Shore towns, has events year-round, which should help to ensure more stays but not necessarilly at high rates. You've almost got to break even May-September to have a chance. 150 days @ $250 per night is $37,500...I don't think its unreasonable.

Part of me thinks, exit strategy wise, that if I'm dead wrong on projections, I'm bringing a semi-beach block 2 bedroom unit up to a really nice standard (it's dated now) -- and those improvements at worst could let me put it back on the market 6-9 months from now (on season) and recoup most of the money.

This would also not be my first rental overall -- I have 3 long-term doors in NJ also.

Sure...but it's not like 4%. Not sure I'm throwing away a deal because its 9.8% versus 10% on a spreadsheet :D

Thanks for the Rabbu tip, will check it out! 

My maintenance budget is $300 a month; have utilities like water/sewer, internet, heating, electric, etc, included in my overall figure. I also have a $250 per month CAPEX built in. I think I'll ask sellers for some property data to confirm.

In their MLS listing they said they get 200-300 per night in their rentals, but I don't think they're doing STRs. I think they are doing week-to-week, which is nice but won't net you as much doing AirBNB.

Looked for the other units on AirBNB/VRBO but sadly didn't see them; this also worries me because I wonder if foot/regular traffic and noise would be a problem for other folks in the building (but they do allow it).

HOW can I prove? What I've seen is prices in the 250-350+ range in the summer...and now lower prices on AirBNB. Ran it by an investor friend who has several at the shore and he thinks its a good deal...but I love more information and more data. I'm trying to figure out if $3500 a month is "reasonable" one way or the other.

I am looking at investing in an oceanfront town on the Jersey Shore for AirBNB potential. I like the property for this use or personal, so I'm not sure how I want to proceed.

Property Type: 2 bedroom, block to the beach, condo w/ association fees (they allow STRs)

Sale Price: 275,000

Loan: 10% down conventional, 3.5% over 30 years

Cash Invest: $61,250 (assuming $27,500 down, plus closing costs, plus 20-30k rehab to spruce up for us or short term rental)

Expeted Income: $3500 per month (obviously summer is busiest, AirDNA thinks 48k annually (4000 per month is expected), trying to be conservative

PITI: $1,735 per month

All Expenses (CAPEX, maintenance, stocked goods, heating, electric, internet, water/sewer, HOA, city fees): $1,265 per month

Cash Flow: ~$500 per month

COCR: 9.8%

Obviously my primary concern is making sure I'm not outrageous on my rental figures, and want to know if I've accurarely covered typical expenses on a shore AirBNB property. I like this place either way, but options/exits are always good.

and finally...I know many folks would say "if you like it and its for your personal use, who cares about the numbers" -- my goal would be to have flexibility and continue scaling. If it's a good STR, I'd want to know that. Thanks for your inputs!!!

@Mike A. - revisting our conversation and your deal. How's it going so far?

Typically you do not need an attorney. I might have one for a deal that isn't MLS-based to cover anything I'm not thinking of, but my deals have all been on the MLS and so obtaining financing, insurance, title, etc., is all "part of the process".

I wouldn't overthink your first investment especially if you can part with the dollars on the down payment. Just need to "do it".
 

PMI will be present for anything loans than 20% down. Consider a 5%-10% conventional down payment which will drop PMI over time. I believe FHA is permanent PMI unless the loan is refinanced down the road, but I'm not certain.

Call my guy Dom Posterivo (Allied Mortgage). Will PM you his number.