All Forum Posts by: Shawn McCormick

Quote from @Marco Egurvide:

Hello BP,

My family and I for years have been long term rental owners here in CA. We recently took a brief exit because of a bad tenant experience and CA landlord laws are not the most forgiving or easy to navigate.

That being said I feel like I will be taking my talents to south beach, or Tampa or Orlando for that matter! When investing from a distance I understand the team around you must be way more trustworthy and because of 3rd party management the deal in turn has to be that much better. All that being said I’m willing and eager.

The idea of STR makes me a little nervous because of the increased amount of upkeep. What is being done to manage this? What experiences do you have positive or negative too please. What are they doing for you what don't they do for you?

I’m much more familiar with the buy hold, gaining through cash flow and appreciation. What questions should be asked to qualify property managers?

Lastly being from outside of an area what resources do you all use to determine rents?

Thanks I’m advance looking forward to building the portfolio back up again!!

 @Marco Egurvide Love the LeBron reference, I'm a big fan. Short term rentals are a totally different animal than long term. However, they can be managed with with the help of a few apps and websites. I personally don't like that approach, but it works for a whole lot of people. 

Orlando is a very International location and, being so requires a little more hands on and knowledge of handling guests from all of the World with different languages, different currencies and them searching from differnt time zones. They have different holidays and school years, so that means you really have to understand how to navigate your calendar to work in your advantage.

There are many dozens of PM companies that work in the short term space here and like any other industry, there are good ones and bad ones. If you do choose to use a PM, understand the services they provide, the level of experience, the marketing reach they have and many other factors when interviewing. I do have some great contacts should you need them.

Depending on the size of property, these homes can experience quite a lot of wear and tear, so unlike a LTR, you have to budget for broken, worn, stolen items in the house. The upside to STR are many compared to LTR, but the learning curve could have you leaving a lot of money on the table.

Best of Luck, hope this helps.

Quote from @Orlando Lis:

Hello, 

so we just got under contract to purchase a 145 apt from a nonprofit organization, the rent is currently literally 60% of the market rate, our biggest concerns are how to make sure there is NO rent increase law in place , how to know if there is one? if the seller is not willing to communicate about the subject. 

thank you 

If you are buying this via a broker, that should be spelled out in your contract about getting copies of all the leases so you can perform your due diligence. You will need to get estoppel letters out to each tenant to verify all of their information as well. Just make sure your due diligence period is long enough to accomplish this. Best of luck.

@Melanie Rodriguez would love to talk to you about your goals and budget to make sure you understand the market here and what you should expect. Certain segments of STR's are saturated, and what you are looking for is one of the ones that is.

@Brian Dusape I can recommend a few depending on a few things. Let me know if you still need help.

Quote from @Tim Kanak:

@Shawn McCormick why 5+ bedrooms?  What other amenities?  Pool?

Thanks,

 Hi @Tim Kanak Depending on the specific community, most of the 'nicer, bigger' resort style communities homes start at 5 bedrooms. If you are looking at 3 or 4 bedroom homes, you are likely looking in communities that don't have amenities that are going to be attractive to what most are looking for. They can still be resort, STR friendly communities, but the homes are typically older and won't likely get the attention from the algorithms that you need to attract potential vacationers.

The communities that have 5+ bedroom homes are built specifically with airbnb, VRBO etc in mind. Since Orlando doesn't have ocean views, mountain views, roof top or treehouse homes for rent, a majority are coming for the theme parks with children and want to be entertained. The bigger homes have the room to be able to theme them and capture the imagination with game rooms, theater rooms, beds that look like boats or star wars spaceships. You don't want to go all out with everyroom geared toward kids, you then have the issue of boys vs girls and toddlers vs preteens vs teens and you may turn off some families. 

All of the dozen or so more recognized resort communities will be gated/guard gated, have a great amenity center loaded with pools, lazy river, miniature golf, movie theater, arcade, restaurant, volleyball etc. All homes will have a pool and virtually all with have hot tub and will come fully furnished and ready to book.

Hope this helps.

@Dmitriy Koval I am in the Orlando area and can give specific advice on the STR situation. We have quite a few communities that are specifically zoned for short term and you don't have to worry about regulations or HOA changing the rules. Happy to provide a list or dive deeper if that is the route you want to go. Your budget will be tough to get much more than a townhome right now (our prices are pacing the rest of the country too), but keep in mind, these come fully furnished and turn key, generally with all future bookings in place which would/should cover your expenses or more while you get up and running.

For long term, really anywhere within Central Florida is hard to go wrong, with your budget you could even get new construction in good areas. Depending on who your ideal tenant is, there may be areas that wouldn't suit your criteria, but our rents are sky high with no end in sight and no inventory to slow that down. Again, I could suggest some options based on what direction you decide to go.

Hope this helps. Good luck

@Ashley Herring I can provide a couple of great people that can do that for you. Message me if you are still in need.

@Cristian De Jesus there are advantages to both. Most lenders have a clientele that they like to or are good at servicing. Some like investors, some like working with Veterans, some only like to do Jumbo and physician loans etc. They all have certain risk tolerances and put out programs based on what they feel the market is in need of. (like bond programs for fist time buyers, or Hero loans for veterans etc). 

Direct lenders, like most of the big ones, Chase, BOA etc. won't be a good fit for investor loans as they don't fit the typical cookie-cutter buyer that they like. Many brokers on the other hand will cater to different segments specifically. Like right now, many are jumping on the DSCR loan. They have the ability to shop around and adjust rates/terms based on the property type, loan amount and needs/qualifications of the client.

Hope this helps. I can suggest a few local lenders if you haven't connected with any yet.

Good Luck!

Hi @Al Caan. There are a ton of threads on BP with many of the same questions you have. To sum it up, Orlando is a fantastic area for this type of investment. We don't depend on seasons, oceans, mountains, unique experiences..we have theme parks and beaches nearby. Great airports for International travel, 3 cruise ports, beaches to the East and West within an hour or so drive, the rocket launches and many other things to make it a very attractive place to vacation. 

Disney and Universal studios are growing and Orlando is recognized around the globe, no matter what language you speak, eveyone knows the mouse!

As far as return, think of this as your own small business, you can do very well if you run a good business and treat customers well and have a great product, but reviews can help/hurt you, a pandemic could almost put you out of business, poor attention to details of cleaning, condition of furniture could lead to failure, buying in the wrong community etc. This can be very lucrative if you run your business from a customer experience point of view, so it is ultimately up to you.

Best of luck!

@Stephanie Romo

Welcome to BP and the big world or RE investing. As other have already mentioned, its a little bit of a tough market right now, but with interest rates going up, that should help stabilize things a bit later this year and calm down some of the bidding wars.

Depending on what you want out of your investment (i.e. just paying for itself while it appreciates, get a little cash flow to cover repairs etc, strong cash flow so you can pay down debt quicker....will help determine what you should be looking at. Also your budget will dictate where you can look and size/age of home and some other factors will determine how well you can cash flow. There are calculators on BP and other places you can practice with to get comfortable with analyzing properties so when you are ready, its not so daunting.

I actually specialize in STR in the Orlando area and that is a whole nother conversation (which I'm happy to have) The cash flow is far more unpredictable than a steady long term rental, but the rewards can also be quite a bit better.

Best of luck to you. I'm in Clermont, but work all over Central Florida and belong to CFRI which may be a good place to start networking for you.