All Forum Posts by: Jon Martin

 This is the one I plan to put in my next property on each side of the bed. Slightly wider than a standard nightstand, no assembly (most nightstands require this) and kills 2 bird with 1 stone.  Dressers are by far the hardest thing to shop for, even moderately priced ones are marginal in quality. 

https://www.nathosp.com/product/et36f_c/hotel_guest_room_fur...

Agree with a queen, minimum. King is better. California Kings are great too because they are longer and only 4” less wide. Problem with a CA King and Full XL is that finding good bedding for them is a pain. Standard sizes make everything easier. 


Dresser outside of a room isn’t even worth having. Inside the closet is ok. You could do a mini dresser on each side of the bed in place of the nightstand, but sounds like you are tight on space already?

At first it came down to the metrics. The below national median home price allowed me to get in, and that combined with strong population growth made the appreciation upside strong. Revenue estimates were good enough relative to the entry price. 

As I looked closer I saw that there was a lot going on . ..  Hip place for young people/families, lots of new restaurants, art scene, universities, tier 1 hospital, sports complexes (traveling youth sports is big business), infrastructure investment, and large multinationals moving their headquarters into the area. I get a lot of guests from all over the Southeast.

STR numbers aren't amazing but the seasonality is low, good appreciation is likely, and if I had to pivot to MTR or LTR it wouldn't be an issue. There are regulations within the city limits but they don't seem to be enforced, plus I'm just outside of the city limits anyway.

2/1 in Greenville SC. $160 on weekends and holidays, $110 weeknights. Just started lowering the weekday ADR for those odd 2-4 day stretches between bookings by $15-20/night and it worked for this week.

October is at 87%, November 70%, December 42%. Each month has a 10-14 day stay, which certainly helps. 

The market I'm in seems like a year round market, or at least a strong 3 season. Lots of stuff going on and people travel there for all kinds of reasons. 

Maybe in the lobby. The room is often a different story. I’ve stayed in more updated holiday inn express rooms than Hilton rooms. This is a tried and true bait n switch tactic with big name hotels. 

I also think that the “need to be in the top 5%” is a bit hyperbolic. Too 25% is sufficient in many markets to do pretty well on the cash flow side. 

My next STR will be 4 bed bare minimum, preferably 5. Must have room for a game room as well, even if it's in the garage or basement. The increased returns are dramatic.

 Not worth tying up limited cash/capital just to make $1000/month at best on a 3/2 just like everyone else’s. You can only squeeze so much out of that. 

I paid $600 for a cost seg that will take $60K (80%*75K) off of my taxable income for 2023. I won't say what my W2 income is but I will say I expect to save over a quarter of that of that amount between fed and state taxes. So yeah, absolutely worth it. I can also say that the money I save by self managing, even when broken down per hour, is not far off from my "hourly wage" based on my salary. I look at it as a side hustle where I pay myself. 

Like @Ryan Moyer said I can utilize that cash now to invest in more properties and kick the can down the road, potentially past my time on earth. That cash is worth much more to me now in the scaling stage. 

As for your "better off in the stock market" comment, your analysis is flawed because it is based on an equal cash vs cash assumption. Most people do not have that kind of cash to put into the market, but maybe we can scrounge up 15-20% of that for a down payment. That's the power of leverage in real estate, where I can pull the returns of a $1M investment with 20% of the cash. I can't do that at Charles Schwab. 

Regarding what you said about not investing solely for the purpose of utilizing cost seg and bonus depreciation, sure, I would agree that your decision to invest in an STR should go beyond that and should work in its absence. In a related example, I was looking to get in to a property before year end to lower my tax bill further. Then I realized that if I don't have enough cash to invest in a property for 2024 tax year, then I am better off waiting until then because another cost seg will lower my tax burden within a reduced tax bracket for 2023. Whereas in 2024, that bonus depreciation, even at 60%, will be worth more if that's the only property I buy between now and the end of 2024. So yes, there is nuance and people should take a close look at their situation to see if it makes sense, but at the very least the first seg I mentioned is an absolute no brainer for me.

Yeah. LOL

In all seriousness I like the idea of scaling up to a manageable number using leverage, maybe 8-10 units. Sell off a couple where the return on equity is low and roll that into paying down the biggest revenue earners. 

On a related note, with conversations I've had recently, I know that there are Fannie Mae backed investor loans that can take LTR rates into account without dinging your DTI. If your all in PITI is at or below the monthly loan amount you are good and don't need to show the income to cover it. Therefore you are basically getting the benefits of a DSCR but with a reduced interest rate.

That said, they do not care what your expected STR revenue is going to be, which seems to be the basic jist of this post.

Great stuff @Michael Baum and thanks for the post and legwork 

I considered it in Myrtle Beach, called around to some units and decided against it. The management takes such a large bite of your top line revenue (40-50%) that by the time you pay your mortgage, $850/month HOA and other bills there often isn't much left. Some will allow you to self manage and bring in your own cleaners, but if you do that then your guests might not be allowed to get towels from the front desk, use the pool etc because you are no longer paying their fees. Requires a lot more DD than a standard SFH purchase.