All Forum Posts by: Jon Martin

Quote from @Suzzette Gaynor:

BRRRR is cool and all, but it definitely sounds silly :). The first time I heard about it, I thought it was some kind of joke. I still struggle to understand how this method works. You buy a house, for example, and somehow there is a way to recoup the initial investment. In the reality of the market, it is very difficult to find deals that will assure that you get back 100% of your initial investment. The cash-out refinancing depends entirely on the appraisal evaluation, which is also an unpleasant variable.

 Yes- if you do it right you can recoup the initial cash you put into the deal by improving the appraised value. However you are also adding to your debt load and creating a new monthly loan payment that needs to be paid off. IMO that's the part that most have trouble wrapping their minds around. 

Quote from @Bruce Woodruff:

Quote from @Rodney Sums:

It might backfire, Rodney.....I, for one, would choose a Mom and Pop over a corporate entity all day long. I do not like giving my $$ to corporate entities. I would rather support a small business.....

 Agreed . . . . It is also antithetical to why people choose STRs in the first place. It would be like going out of your way to visit a restaurant in a unique location, only to have it serve food from Applebees. 

Roofs aren't cheap but they aren't terribly expensive either. If you have to replace, just bite the bullet and do it. 

I like the idea above about doing some of the work yourself, just be sure that your quotes reflect that. I would get an all in price first and then negotiate down based on doing your own demo. 

@Mike Dymski Sounds like an awesome project!

Quote from @Dan Maciejewski:

Quote from @Nathan Gesner:

Quote from @Account Closed:

More and more I'm hearing that STRs are going to be the alternative to hotels as it looks like a recession may be eminent.  Curious to hear from the forum if you are seeing the same trends in terms of your bookings.  Especially if you are in a vacation destination where hotels/resorts tend to capture the marketshare of the vacation traveler, ie. Hawaii, Orlando?

https://finance.yahoo.com/news/summer-vacation-rentals-144442710.htm

Not a surprise . . . . Of course the hotel giants are going to hedge their bets with SFH rentals as well. Same reason why Coca Cola invests in bottled water, iced tea, fruit juice, etc. No matter which way the market swings they come up.

Overall I agree with your post- there will always be a contingent that likes the "Resort" or business hotel feel and it will always have a place. 

Quote from @Carlos Ptriawan:

Most hotel investments nowadays went south since covid times as the cost expense to income doesn't make sense. Operating hotels has their own problem also and much more difficult to operate than STR. It seems hotels (and perhaps offices too) will face the same challenge as the retail industry against Amazon.

With Gen Z/Millenial traveling, their obvious choice is STR.

Agreed. The hotel industry is built on cheap/poorly treated labor and uniformity, both of which are frowned on by younger generations. STRs have the ability to offer a more unique and customized experience that can provide amenities that would require a complete overhaul for hotels to offer (kitchens, private outdoor space, common space for large parties, etc). You are starting to see some corporate hotels update their decor, and some look very impressive, but at the end of the day it is still just a room with a bathroom with none of the other benefits that an STR can provide. 

IMO maintaining a 24/7 labor force will be a worsening challenge for hotels, especially once those maids realize that they can make far more money with their own STR cleaning business. 

Quote from @Preeti Tibrewala:

Quote from @Jay S.:

From the pictures, it doesn't seem like any major work needs to be done. I'm not sure what you meant by fixing it. You guys can just rent it as it is. 

The violations part though can be tricky though. Also have you checked with Los Gatos officials about AirBNB rules?

Just checked Los Gatos site and looks like I can't do STR in a property unless it is my primary residence. So Airbnb is not an option for this property as we don't intend to live here.

 Are you in the city limits? 

EDIT: Looks to me that you are not, so you should be able to run an STR as long as there are no County wide restrictions.

Plenty of long standing homes have been built on slopes all over the world, many that are far older than this home. It ultimately comes down to the integrity of the foundation itself and the ground it's built on. Find a local inspector that specializes in foundations, ideally one who has worked on homes in the same neighborhood. 

Quote from @Greg Scott:

These are not "Yes / No" questions.  The answer to all is "maybe".

In any case, it is up to YOU to understand what the value of a property will be in its current and fixed-up condition and to assess whether or not that is a good deal.

 Agreed- you have to give us some hard numbers and detail the condition of the house before we can even begin to answer your question. 

Definitely a good long term appreciation play. My only concerns would be the potential amount of work needed and how far you are from town. 

If you go STR, make sure there is at least part of the lot that gets some sunshine. Being stuck deep in the forest gets weird after a short while.