All Forum Posts by: Michael Baum

Hey @Robert Ellis, so I have no performance data for you on this topic, but you can try and scour AirBNB and VRBO in the areas you are building and see what other homes are bringing in. Nightly rates, occupancy and amenities.

First I would make sure where you are building allows STRs with no or few restrictions. No HOA's.

If you are building new properties and the area supports STRs, maybe build to suit STRs. That might make them more attractive to investors. 

It seems that STRs are a bit nebulous in Folsom. There are a lot of restrictions. Minimum of 3 night stays, limited number of STRs in a particular neighborhood etc.

You need to get the license and pay the STR tax. You need to provide a certificate of occupancy. I assume that is to assure them that you live in the rental.

HOA's that ban STRs trump the law if it is allowed in a particular area.

Yeah, what @Mike Grudzien said.

What are you talking about?

Hey @Bret Ceren, I did a survey last year (I think) where I spoke with 10 lenders. Banks, Credit Unions, direct lenders, portfolio..pretty much the full mix of of lenders any of us would use.

They all said the same thing. A working STR is worth what other homes (just homes, not STRs) are worth in the area. IE-Comps. There is no additional valuation for the STR business.

In the end, past performance is not an indicator of future success.

It sounds like you have an "estimated" revenue and not actual revenue going back a few years? Just because Rabbu or AirDNA say that it will make X doesn't mean it will. There is so much that goes into a successful STR beyond the very basics.

Now, projections can help for people using a DSCR loan. I don't have a lot of info on what lenders do for that but I am betting a noob that wants to start a STR will have a more difficult time than someone like @John Underwood and @Collin Hays would have.

I am not sure I agree 100% with this @Erica Dike.

There are a lot of overlap in all those demographics and if I can create a space for multiple demos, then that is what I will do.

Our place fits will for most of these with the exception of luxury folks. We have gotten all the others in a single group.

There are things that are must haves IMHO. Washer/dryer, internet etc.

I do agree that in certain areas you need to focus like you said. I am not creating a family space in a 1/1 downtown apartment. 

Hey @Justin Brown, what @John Underwood said is spot on.

SLC has been restricting STRs for a long while now and it isn't going to get better.

People who have STRs in areas where they are not allowed are breaking the law and will eventually pay the price.

Having said that, you should check and see if there are certain areas where it is allowed in some way and that is why they exist there. For example, if you live onsite. 

Hey@Stephanie Medina, so if you are close to your new STR you could start scouring FB marketplace, Craigslist and others for used USA made furniture.

You can get great stuff for pennies or even free. In an area like Austin, I am betting you can find some great stuff for little cash. A quick look at Craigslist in Austin shows 4400+ listings by owner.

You could get started picking up various pieces while it closes.

I do recommend new mattresses. Zinus GreenTea 12" or the equivalent. They can be had for 200-300 for both king and queen when on sale.

EDIT - For example - https://austin.craigslist.org/fuo/d/round-rock-king-bedroom-... not sure of COO but solid pine king bed with nightstands. $300. Looks like a nice set. Bet you could get it for $200. :)

You are on the right track @Tom E.. We use Proper but I am going to be going over all our insurance as things have been skyrocketing here in WA state ever since they did away with credit scores affecting insurance rates.

Where is the STR at? I am curious as I am here in WA as well.

Hilarious. I didn't know who she was either.

Like @Patricia Andriolo-Bull, I hate the do you know who I am.

That has happened once. It was some kind of minor fund manager. Like the world knows who the fund manager is for Bumblenard Financial is...

Hey @Raghavendra Pillappa, late to the party here but everyone said it best.

I wouldn't move forward on this until you find out all the details on if the septic can be expanded and if things were done correctly to add the bedrooms. Need to be permitted and I am going to say it probably wasn't.

If the septic is only for a 2/1, then the county/city wouldn't approved the expansion as the current septic doesn't work for it.

Most likely this would be a pass.