All Forum Posts by: Michael C.

@Peter Hu

Thanks for reaching out. I don't have a subscription, this would be my first STR. I was looking on Rabbu because it's free. It showed 2 or 3 houses making $10k+ month in the area. Not sure if that is yearly average or just current high season. Looks to be a clear summer season April-Oct, then drops off in the winter a lot. Looking at Airbnb and VRBO directly it is showing quite a few vacancies even for the busy season. I'm not sure this area is a good STR market.
I think it would be making its own high in the market in a way, which is worrying also. 
This is out of my traditional buy box so any due diligence would be great. 

@James Carlson

Hello everyone-

I guess when I hit the back button to edit the post it made a complete new one. Not sure how to fix that.

Here is the pertinent information in my other post. 

https://www.biggerpockets.com/forums/530/topics/1196499-cast...

@Eric DeNardo thanks for the replay.

AirDNA doesn’t necessarily account for property type. 
Just # beds baths and guests. 
It shows daily rate of $279. No way that works out.

It would have to be in a higher class than that. 

Hello all, 

I am trying to figure out if this custom home on the hill in Castle Rock Co is a good investment. 
The best strategy I see for it is as a Luxury STR, I'm just not sure the market supports this.
It is a newer hill top build in an older neighborhood with a 500-700k price range. Looking at local STR listings most are $250-400 a night around castle rock. 

It is a 4bed 3bath 3200sqft $1.2m custom home

Benefits- no HOA or rules restricting STR

-1mile (walkable) from historic downtown or from the Rock park

-house has nice views and is pretty secluded from neighbors and feels private
-assumable loan with much lower than market payment

Draw backs- high price -no comps, new house in older neighborhood. High price per square foot.
-interior floor plan not ideal for raising a family but looks ok for STR. More of an entertainment set up.

-yard not ideal -driveway is steep, not a lot of off street parking, back yard is a rocky hill

I think I would need $500-650 per night for it to work for STR or LTR of $6,500+.

Anyone have any insight or ideas for this property?

Thanks Mike.

https://redf.in/2SaOAV

Hello all, 

I am trying to figure out if this custom home on the hill in Castle Rock Co is a good investment. 
The best strategy I see for it is as a Luxury STR, I'm just not sure the market supports this.

@Jaron Walling

Yes motivation will be tough if something expensive breaks and it just looks like a big bill. I haven’t had that happen yet though. Mortgage balance will drop about $500 a month with each payment also so it’s not completely going in the trash. 

I can put $80k in corporate bonds and make $500 a month in cashflow. This still leaves the $80k principle relatively accessible. I would obviously have reserves.

It really is just a gamble if the market will keep inflating or if it will drop this would show if a long term hold would work or not. 

@Ned J.

Hi Ned thanks for the reply, yes I understand, it’s not my first time around the block. I’m trying to explore out of the box options because with current rates and prices nothing looks good. I would be relying on rents to increase, wasn’t considering a refi as it’s already a little below current rates. If rates drop prices will start going up again. Rents haven’t caught up to current borrowing costs. So everything is a little out of wack.

I have an opportunity to assume a loan on a SFH for very low cost, maybe a few thousand in fees to transfer. The issue is that the property will not cash flow as a rental. If I can get the house for essentially free does it make sense?
2000ish build 3B3B SFH. current loan is at market value and around 6%.
PITI around $2,800. Long term Rent around $2,300.

Here are my thoughts: 

1 This is not a deal, cashflow is king.  Don’t buy a loser. Pass.

2 If the out of pocket costs are so low vs buying a comparable with 20% down both will be negative for +5 years anyway right? if I put $80k down to make $500 a month or lose $500 a month with no down payment until rents catch up to current market. It’s just a function of finance and Net Present Value. Either start $80k in the hole with +$6k cashflow or start $0 in the hole with -$6k cash flow. 
This also preserves my cash to still find more opportunities. 

What do you think, can I make a deal out of this? Which chain of thought makes sense here?

Completely remodeled before they moved in?? From the pictures you posted it looks like a cheap flip landlord repaint special. None of that looks new. 

Paint peeling off the door does not mean it needs to be replaced…  looks like it has already been painted several times already anyway.  $20 pint of paint and it’s fixed. 
Bondo or wood filler on the trim, sand and paint it. Whole job is 1 day~ $300-400 with labor. Do it yourself for $100-150.

Seems like you are over reacting and do not know basic handyman skills or pricing and are being upsold. A small handyman/painter could take care if it. A contractor is too big for this size job. 

@Jason Malabute

Ever heard of TARP?
The ‘bailouts’ of 2008 were NOT the bailout that you think they were. The US government owned essentially proffered stock in each bank that was bailed out. Meaning there was no free money, the government owned a portion of each bank, meaning the taxpayer owned a portion of the banks equity. 
The troubled asset relief program (tarp) was one of if not the only tax payer funded government programs to actually make a profit! When the economy returned the government sold its equity positions in the banks and made the taxpayers money. There was No Free Money in the 2008 bailouts. And in terms of actual money it was only $431 billion , with a reported $15billion profit on the program after assets were sold.

The real bailout with the free money you are not thinking of was Covid. The PPP loans gave out over $800 billion in free forgivable loans. That’s almost double the 08 ‘bailout’ for absolutely FREE. Taxpayers got no equity, stock or return on any of that money. It was printed, sent and forgiven with little oversight. 
Money was literally free for 2 years. Not to mention the other $1.8 billion sent out to individuals and family’s, while student loan payments are still on pause (interest paid by the government). In total $5 Trillion was spent on Covid relief that added 0 value to the American taxpayer. 

Literally this is a fight for the US dollars survival. A run on banks would crash the Dollar and it would never recover as the world reserve currency. The government has to back the banks at all costs. $31 trillion in debt backed by nothing but a printer. If we all go to the bank and make a withdraw it would call the US governments bluff, then game over, no one wins. 

I put a good sum of money in phoenix capital group. They purchase mineral rights and oil fields. Based out of Denver. 
Bond offerings range from 8-12%.
Offers monthly dividend or compounding interest.