Quote from @Joshua Herrera:
Good afternoon Bigger Pockets Community!
My name is Josh, and I have decided STR may be my next step in life. Currently deciding to do it as a side hustle until it proves to be a worthy 9-5. Any guidance is much appreciated.
Thank you and God Bless!
STRs are a great way to fast track that passive income! I’ve personally just closed on my 4th in 3 years and even just the two I bought last year have netted me a starting engineer salary 👀! There’s a lot of opportunity locally, but one of the 3 keys to success in STR investing is having enough cash to do them properly. It’s a higher barrier of entry investment with much higher returns (and tax incentives). Where I buy, which I think has some of the best price to income ratios out there I recommend a minimum of $185k cash on hand (for the DIYer) and $220k-$235k cash on hand for someone looking for a hands off approach. This is the entry point I’d recommend with high CoC returns and includes your downpayment (20-25% down), closing costs and the furnishing/design budget. The next tier with even higher returns I recommend a $320k+ cash budget. Be wary of “cheap” STRs and 10% down “managed for you” deals especially in Orlando. Those deal do not cash flow well.
I highly recommend listening to the podcast interview with the VP of Airdna either on BiggerPockets the past couple months or maybe it was STR secrets podcast. They go over a lot of the fundamentals that I completely agree on as a high skill operator in this space. Ultimately, STRs are like running a business and to be successful you want to distance yourself from the competition. You don’t want small condos that are easily carbon-copy for example as you have no way to stand out from competition and it becomes a race to the bottom. You’re also in competition with hotels at that point. So for example, in the Orlando market, a 4bd house is pretty low as a standard but over here in the Tampa Bay Area a 4bd house is quite high on the STR ladder. This is because there’s a lot of 2,3,4,5 bed homes in Orlando and very few 4,5 bed homes here.
Anyway, I could talk about this for hours but those are just a couple pointers. If you’re in that cash position I mentioned above, then we might be a good fit to get on a call so I can show our process which is complete: 1) finding and buying the right property 2) creating a top product from that purchase with a world-class designer on my team 3) co-hosting/managing that property at a discount for clients to ensure you get more money and have a product that lasts.
you can also follow me on IG @tampa.rei , I’m actually about to post a walkthrough of a property that was being managed by one of the most popular PMs in the country and in just 1 yr you’ll laugh to see what state the property is in from poor management! 💀
