All Forum Posts by: Joseph Bafia

I'll be there as I was bummed I missed the last one.  I believe @Ermal Berisha is coming as well.

@Lucas Roswell We used Lodgify and built our own site.  It had all the great tools, calendars, payment platforms all for one low yearly price.  The issue is that we booked 1 deal on that platform in an entire year.  I think building the or creating the site is the easy part...how do you drive traffic to it.  We're 90% booked using VRBO and although fees are taken, the traffic and bookings are priceless.  Now, if you have a great marketing strategy to drive that traffic to your own platform, then that's another story and you it could be worth it.

@Paul Sandhu I read your listing and can't wait for my next getaway to the worst town ever as now I know where can stay.  Your listings descriptions pull no punches!  I've considered updating my cabin's listing to say "If you don't like the sound of a rushing creek in your backyard, then you're a nature hater and I don't want you staying at my property!"

Investment Info:

Single-family residence buy & hold investment in Midlothian.

Purchase price: $88,000
Cash invested: $20,000

Being originally from Chicago, I have a connection to that area and surrounding suburbs. Discussed a deal with my sister since she was unable to get traditional financing and purchase her own home, I decided to purchase one and rent to her.

What made you interested in investing in this type of deal?

Helping out family & navigating an out of state investment opportunity. I was able to learn and practice navigating all the steps of real estate investing using technology and not physically being there. Also the fact that the tenant was "preselected" in advance of puchase.

How did you find this deal and how did you negotiate it?

MLS deal with the help of an investor friendly realtor. The home started at $105k and through negotiation steps, we got it down to $88k.

How did you finance this deal?

Traditional bank finance.

How did you add value to the deal?

Knowing that the home was going to have "owners" in it, I knew there would be a fair amount of sweat equity that could be put in. I added additional funds to help do some updates, but it will be somewhat of a house hack and get improved over the course of a year.

What was the outcome?

Smooth process to purchase and closed mid-August. Got my sister to sign a 1 year lease and now have an out of state property!

Lessons learned? Challenges?

Its always discussed to have a "team" in place for out of state investing. This belief was strengthened by this experience. I didn't need to be there for any of the process, but without having a realtor we trusted (will mention him below) and my sister who would handle all physical aspects of being at the property, would make it extremely difficult. Find yourself some good "boots on the ground" that can be your eyes and ears. Only real challenge is yet to be determined...working with family.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I found Jake Fugman on BP as a realtor and he connected us with Paul De Luca (https://www.biggerpockets.com/users/PaulD225)
They connected us with Zack Karp who became our lender.
All of which were fantastic to work with!!!

$120 per cleaning for a 2/3 (1000 sq ft cabin).  This includes the cleaning and they also take my trash to dump as we do not have garbage service where we are.  

We found it on MLS. Bought it cash. listed at $43k and we bought for $30k. Keep in mind, it's in a C/D area, but the value is definitely there if you are comfortable with the level of rehab and the area.

We bought into Lodgify for a year Flat one time fee and very easy to build your own site and booking platform. The issue is that you have to find a way to market your site to direct traffic. Thats where Airbnb and VRBO have something we (as STR owners need)....traffic. We tried Facebook and Instagram advertsing, posting on forums, craiglists, etc. and had only 2 bookings through our own site and the rest through VRBO. I like the idea of hosting on my own platform, but really have done well financially with VRBO.

We manage our STRs from a distance and use some pretty basic tools.  We have a Schlage Encode log that allows us to program any 4 digit code to the keypad remotely and use the last 4 digits of a guests cell#.  We can program start and end date/times as well.  We have a lady who cleans our place along with a few others.  We pay her $120 for each turnover, but that is charged directly to the guest so no out of pocket for us.  This $120 includes her taking garbage away (we're a remote mountain house with no garbage service).  Also she maintains the hot tub.  Also, don't limit yourself to Airbnb and test the VRBO platform.  We thought for sure Airbnb would be the best one for us and after 2 years now, we get 95% of our booking through VRBO and minimal with Airbnb.  

Also some great STR forums on BP to follow.

Happy to share any other info.

It depends I guess on the approach you're taking for ownership of it.  We're doing our next one under the terms of a 2nd home, so terms are 10% down and maybe a bit higher rate then a primary mortgage.  Otherwise, I'd assume that a traditional investment property is requiring 20-30% down and higher rates.  

Keep in mind that STR income will likely not count in your favor until you have tax returns to show it, versus a bank may consider lease income on a LTR.

I'd recommend reading and following the Short Term Rental forums on Bigger Pockets. There is so much info related to Short Term rentals there and many experts. I'd also create a keyword alert on BP for "STR" and "Short Term Rental" so when new items post you will get alerts. I'd also say to get a list of questions together (after reading some of the forums) and have find someone willing to help answer them. (I'd be happy to try).

You also want to identify what this business looks like for you.  Where do you want to do it and how do you think you'll get your first property.

Hope that helps and let me know if you have other questions.

@Alyssa Czopor

First off, congrats on just the desire to launch into SOMETHING!

I've read many of the responses and I don't claim to know all the answers, but I will say that for every person that says "don't do that", you'll find one that says the opposite.

I "lucked" into the STR business on accident, but after I did, it was amazing.

My recommendations are:

- Follow & read the Short Term Rental forums on BiggerPockets. This group is dedicated to exactly this type of strategy. Many who are offering you guidance either don't do STR or don't think its a good idea. The STR forum is made up of those who do it and you will learn there are many ways.

- I'm not a fan of one-sided opinions, so after you read all the comments on this thread, and then read the STR forum, connect with someone who is following a strategy that you think you MAY like. Connect with that person and pick their brain. That will give you a better foundation of what you are in for if you follow their method.

- Create a "keyword" follow on BP. I simply follow a few and one is "STR". Anytime that term is used in any post, i get alerted (thats how I saw yours). This will give you info about your topic. I've learned everything from what sheets to buy, to whether or not to have a Keuirg.

- Use the "search" box on BP for things you want to learn. Things like "finance a STR", "best door locks for Short term rentals", etc.

From a personal standpoint, I self manage my STRs from 4.5 hours away with no issues while holding a full time career. (actually looking at a STR in CA and I live in NC and I have no concerns). I leave no money on the table in rates as I know my market (even better than a PM...again, my opinion,) and I save the 20-40%. I've learned dos and donts and I follow some of the best STR minds on BP and have learned a ton. I recommend you do the same and would be happy to talk to you about my journey!

Best of luck!

Joe