All Forum Posts by: John Litz

If you want a generic sq ft price just ask ChatGPT. If you want a more accurate price you will need a scope of work easily generated with AI as well and submit to a GC. A sq ft price is just to get in the ball park and not very accurate at all. A scope of work is easy to generate for a baseline then do add on’s to the scope you need customized for your exact preferences. The GC can give you a much closer estimate the more detail you give them. 

I’m sure I will make a post about the whole experience. It is certainly a long game to make this one happen. But it will pay out in big ways when it is complete. 

During your analysis did you include a percentage amount for vacancy, maintenance, and cap x? I usually hold 15% total for these. Did you figure in the additional cost of no rent for one of the tenants and how long it will take to evict them? This is part of the cost to acquire. Did you figure in the cost of the other tenant paying less than market rent until you can get them up to market rent or replace them with another tenant and how long that will take? This is also a cost to acquire. 
When you have studied your market properly you should be able to provide the answer of if single family or residential multifamily is better for cash flow. 1% rule was for a time when almost all deals were decent as a way to rule out the lessor deals and concentrate on the best deals. Very few will hit this metric these days. Not a great rule for today’s market. Some can still hit it but not most

I am in the middle of getting zoning legislation changed in my city to do the exact same thing. It is a huge challenge but it is looking poitively so far. 

Regardless of if you could get 95% LTV. It's more about should you create that much risk in your portfolio. Personally I would not go above 70% and when your done building mode drop down to roughly 50%. At 95% any negative change places the entire portfolio at risk. Just not a position I am willing to put myself in. At certain times it could be a huge winner but there are plenty of other times where it is a huge loser as well.

I am not a fan of the arbitrage system. Sure it can get a person started earlier. However they are missing out on all the revenue a property can generate. Arbitrage is simply transactions. When you analyze a deal as an LTR so you can pivot if necessary, you are in a much stronger position. Owning makes money from cash flow, appreciation, depreciation on taxes and write offs for your taxes. 
Your tech stack is critical. If you're trying to do everything yourself that is a sure fire way to burn out. Yes some things will require the personal touch. However when done correctly you shouldn't need to write a single message to the majority of guests and still have them feel warm and fuzzy because you have been an attentive host. Get listed on all the OTA's and a direct booking site, use good management software like HostAway, use dynamic pricing software like pricelabs, use WiFi enabled smart locks like Schlage encode, use an email capture system for guests to login to WiFi like stayfi, use those captured emails to do marketing for your direct booking site, and automate scheduling and payments for cleaners and maintenance. The more of the day to day items that can be handled with tech the more you can be freed up to do higher ROI on your time items. Things like acting like a guest searching for a property and seeing how well your property goes to the top of the algorithm or not, as a guest looking at pricing of your property vrs your closest competition, looking at properties that are doing well and seeing what you could be doing better. Listening to YouTube big shots that have great advice on professional ways to handle problematic guests ( most are great but everyone will get bad apples), staying at the property when you have an open window of time and actually get the guest experience (this is critical), and looking at your click thru and conversion rates to get a good baseline.

There is way more work to running an STR than a LTR. Yes good markets are over saturated. But if you're a top operator who cares if the bottom 50% are struggling. You're still getting booked. National occupancy rates are 50-55%. This year I was at 71%. Still not good enough but for my first year not bad at all. This is my first property. I was able to replenish emergency fund money I had to dip into for furnishing, was able to pay off a hot tub, was able to replace 2 garage doors and paid for a larger repair this year. My cash flow for the year was $13k. Nothing fantastic for sure but the property paid for all its own bills and made money with a newbie operator. Next year will be even better with improvement that are constantly getting made as this is not a set it and forget it business.
This hospitality business is not easy money like so many think. But if you’re willing to put in the work it does tend to make significantly more than LTR. Stay focused on providing excellent guest experience and you will stay higher in bookings and revenue. 

You will want keyless keypad entry for sure. Smart TV does not need Chanel’s just access to whatever the guest currently streams. It’s even better with guest mode turned on so they can enter a date to auto log them out. Games are a must, less pieces the better. Cooking is huge so well stocked kitchen plus bbq. Fire pit with string lights is very popular. The biggest pain in the butt is also the best for increasing bookings and that is the hot tub. Not for every property but it does make a huge difference. 

Garret completely agree with you. Clicks and conversion rate are extremely important. Quality pics are by far the number one contributing factor. Color also plays an important role in this area. If the search produces a sea of natural earth tone pics, the one that stands out has a splash of color. I tell people all the time to think of any pic of a hotel room- 9 times out of 10 it’s nice professionally done but it is also boring. Nothing to really grab that attention. If possible it is awesome to test with a focus group. Do a small sampling of listings that are your direct competition. Show the hero photo for each listing to the group and ask them which one they are most likely to click on and which is least likely. So valuable to get people’s opinions!!!

Not sure why you would refinance a lower interest primary loan into a higher interest DCSR loan. You're planning on staying for a year so no issue there. Only downside is keeping the PMI on the loan which really in minimal cost. Until you reach the limit of 10 conventional loans I wouldn't even think about the higher interest of a dcsr loan. When you're ready for the next one simply use another conventional to either refi and get the FHA back or leave the FHA in place and do another conventional on the next property. Plenty of options available.

Simply have another service in place before breaking away from evolve. Plenty of services and managers all doing similar things that are much better than evolve.