All Forum Posts by: Jon Martin

If your place makes good numbers with a low rate then be sure that the grass is really greener before you sell. As mentioned above, a HELOC could be a good play.

Instead of 3 I'd buy 2 in areas with opposite high seasons so you have more even cash flow throughout the year. If your NH property does well in the summer, maybe keep it and put all your excess capital into 1 property in a strong winter market because those markets are generally pricier. 

Quote from @Michael Baum:

Hehehe @Mason Carter, @Luke Carl and I pretty much see eye to eye on most things so....YES. Find an agent who does STRs and knows the market.

So now that you say you are a college student, I think there is another way to go on this.

I would look for a multi family, maybe a duplex or 4 plex. Do an FHA loan on it, live in one and rent the others. This would be an ideal way for you to get a performing asset while hopefully cashflowing enough for you to save up a ton while living for rent free.

After a year you can look at refinancing into a conventional mortgage, rent the final unit, find another and do it again.

This way you can live cheap, save up, cashflow and build up an asset portfolio. Then you can look at expanding into STRs after a couple of years when things are more stable.

Just my 2 cents.

Agreed. Or even a SFH with a detached garage or walk out basement that can be converted.

Understood on the time commitment and turnover needs. Have you tried to find cleaners? I manage remotely from very far away with a few cleaners. You could always ratchet it down 7 or even 2-4 minimum to weed out the constant turnovers. Or do a higher minimum night stay when they are staying on certain days of the week that you can't clean. Or block off dates on either end of the booking so you don't have to stress over cleaning during a short mid-day window. Lots of options to make it work around your schedule.

I charge a $50 flat pet fee. Easily adds up to a few hundred bucks a month in revenue with shorter stays. So far it has only been dogs and it is as if they were never there. I'm more nervous about cats but I haven't had to deal with that yet. I mention in the disclaimers that I will charge $100 if we have to clean up a pet mess on a bed or couch. I'm not sure how I'll collect haha but it seems to deter the issues. Plus, IIRC Air Cover includes pet damage and my STR home insurance policy is quite extensive (Proper).

I would 100% theme it out. You don't have to go crazy, but even simple things like a horseshoe or a spur goes a long way and can liven up a large swath of wall space. Would also recommend a rug in the living room at the very least, ideally in the bedrooms as well. 

And professional photos for sure. Have them come out on a sunnier day. 

BTW is there a specific reason why you are not allowing shorter stays? Local regs? Also agree with allowing pets, the extra fee is nice and really adds up. 

Do a search in the area you are considering for a 2-3 day non-holiday/peak stretch of weekdays well into the future. Note how many listings there are in a 1 mile radius from where you want to buy. Click on some listings that are similar in bed/baths, SF and decor to what you can realistically offer. See what they charge and how booked out their calendars are. 

Also look at how many listings there are for the next few upcoming weekends and note how those numbers and quality of listings compare to the total listings in that area. If there are lots of economical options of good quality and you are in shoulder or peak season, it's probably saturated. 

For sure. Like I mentioned you only need to average about 20 minutes a day 6 days a week. Try to batch all your tasks and log your minutes. Not tough to do, carve out 10 minutes in the morning and evening to keep up. Otherwise if It's an important message I will reply asap if needed but I always start the timer first. You gotta be like a lawyer haha

I'm on my first and it adds up to about 2 hours per week. I clock in when I need to respond to guest inquiries, set door codes, update my cleaner, pay bills etc which can easily be 15-20 minutes 5-7 days a week. However I see this as a good thing because I want to log enough hours to be considered "active" income and offset my W2. With some automation I could knock it down a significant amount but I want that bonus depreciation to offset my income so I'll worry about that when I scale. 

Makes sense when you think about it. Lots of single travelers or couples only need a 1 bedroom so they aren't going to pay much of a premium for a 2nd bedroom that they don't really need. The 3s in my zip code don't do much better than the 2s, but there is a 4 bedroom a block away that kills it. 

Quote from @Pandu Chimata:

Quote from @Lauren Kormylo:

Here are Fannie Mae's requirements for second homes. https://selling-guide.fanniema...

Each lender has their own interpretation of those rules, but here are the most commonly agreed upon, which are usually required for only the first year of the loan:

• Occupied by the owner for some portion of the year
• A one-unit home (not a duplex, triplex, or four-plex)
• Suitable for year-round use
• Owned solely by the buyer
• Not rented full-time or operated under a timeshare arrangement
• Not operated by a property management company that has control over occupancy
  

 When I inquired about purchasing a 2nd home, my lender has two more restrictions on top of the above

1. Should be more than 50 miles from the primary home 

2. It should be tourist place/city. 

 IIRC these rules are lender specific. The lender will explain these to you and make you sign some kind of disclosure to acknowledge. Mine was very broad and lenient and only said "some time". YMMV

Quote from @Patryk Swietek:

Quote from @Jon Martin:

Quote from @John Underwood:

Is it true that that area is saturated and getting worse?

 Seems like it is. A simple enemy analysis shows a lot of properties with professional photos and designed interiors with wide open calendars. 

This is actually because right now the average lead time for the market is 14 days for smaller properties and 21 days for bigger ones. 

 
Residential properties don’t do well. Remote properties with big lots and amenity dense absolutely crush it. I’m 90%+ occupancy for my properties. 

That's awesome, good for you! I've done some mid-week searches for upcoming weekends during the winter and I still see a lot of options where the host clearly does a good job with the decor and experience. Whereas when I do this in a market where I'm invested and some others I'm interested in, there are maybe a few dozen listings at best, and 80-90% of what's not booked is either garbage or too expensive. 

That said, it isn't always clear what's next door and I imagine that at least some of these listings are in cookie cutter neighborhoods. I am speaking of Yucca Valley in particular. The listings where there is clearly a lot of privacy and/or are up against the rocks seem to have much fuller calendars, like you mentioned.