All Forum Posts by: Matt Silverstone

Hi @Lorraine Molina,

Happy to help. Couple things that stood out to me.

- 8% property MGMT: Are you self renting? PM fees for airbnb are around 25%

-property taxes look low, should be 1.15 assessed property value

-how many beds/baths is the home? AirDNA numbers include cleaning fees. I'd estimate 15%+ of airDNA revenue is cleaning fees vs booking fees.

-everything else looks pretty good for estimated projections

Hope that helps! Good luck.

For those that have gone through Joshua tree short term permit application, are you able to update the bedroom count to the home at a later date? In the example where a two bedroom is in the initial application but a addition is done later 3rd bedroom is made from garage, how does that impact compliance?

@Culin Tate

Can you elaborate on the STR rules there or provide a link to read further? I'm interested in a STR as price to rent ratio looks really solid for a cabin. Thanks!

Thank you all for the replies. I’ll be taking this into my considerations and see if a deal can still be made! Be well.

Hi BP! 

I'm under contract in the valley for a duplex and trying to overcome a situation to judge the ability for the current tenant to perform on rent. I intend to be owner occupying 1 of the units and the other is currently occupied & has been for 6 years by the same tenant. 

I during my contingencies I found out the current tenant hasn't been paying throughout COVID as the tenants work is correlated to hollywood/filming. 

The entire reason I like the idea of a duplex is to offset my mortgage, but with a non-paying tenant, its a bit concerning + COVID. Seems like there's light at the end of the tunnel soon, but who knows! I spoke with the tenant and they have plans for staying 6-12 months. They're not interested in cash for keys from the current owner either. They've been there for 6 years and never had troubles on rent until COVID and the month of April is their first month paying again. The tenant applied via the city for rental assistance (80% paid of back rents) which was remitted to the landlord. So now the tenant is technically "current". For what it's worth, the tenant is paying market value. 

During my due-diligence, I found out the true story about the tenant (described above) and trying to see what's still feasible for me to continue and purchase the property while protecting myself. I'm concerned I acquire the property and then have a non-paying tenant. Having to float the entire monthly PITI for the building doesn't sound fun, but so long as I can put something in place with the current owner/tenant, I'd feel more comfortable.

OPTIONS:

- Ask for 12 months of rent to be held in escrow to draw from if tenant doesn't pay rent (my favorite option so far and for all parties involved)

- Ask current owner to deliver property vacant

- Cash for key --> tenant not interested

- Price reduction on the building for non-performing tenant --> The price of the property is a good value, but most likely b/c of the tenant situation, but could be a last resort

Any other ideas to suggest?

--

So long as I can assure the tenant will be paying until the moratorium lifts or be compensated another way, I'd be a happy camper and proceed to buy the duplex. Having the opportunity for a performing tenant to off-set my mortgage is really appealing.

Once I get through COVID and beyond this property has value for an ADU conversion and appreciation so I'm trying to look long term, but also the next year as I don't want to be bleeding cash on this property.

If you've made it this far, thank you! I've given/received a lot from BP so hoping some others can weigh in :)

Thanks,

Matt

@Rupesh Singh I'd say more areas don't allow than do allow STR.

When you say your numbers don’t pencil out, can you further define your criteria/return preference? Everyone’s investing goals are different.

Best, Matt

Hi @Victor Ong,

Congrats on this development. Looks exciting!

Was the acquisition just a lot or a tear down? How long do you expect the project to take? Would love to stop by when in the area and check it out.

Thanks,

Matt

@Katharine Gonzalez yes, think of it like opening a marketing company in an LLC that rents the property for you for $1,000/mo with a 12 month lease. Then that marketing company would furnish and rent out the unit STR on Airbnb.

You would still own both but reap the benefits of looking "traditional" to a lender while maximizing ROI with Airbnb via the marketing company you create while still putting the same $$ in your pockets.

Good luck! Let me know how your pursuits go!

Stumbled across this thread as I'm looking for STR properties in Indio/La Quinta area.

I’ve done quite a bit of research myself.

If anyone is in the Airbnb game and willing to share advice I’d greatly appreciate it!

Curious the seasonality of occupancy rate and ADR. AirDNA is misleading in my opinion as they include cleaning fees as revenue (even tho it’s a break even expense in my opinion).