All Forum Posts by: Mindy Nicol

Hi @Kristin Solbach!

My humble advice. STR is a part time job. Do you have the time?

Down payment is just one thing.  I would ensure you have enough saved in reserves to handle down months, furnishing and decorating the entire house, closing costs, etc. Are you prepared for it not to cash flow in the first year?  If you have repairs and maintenance that could happen easily. Being a remote investor will cost you more as you will need services at the location and someone trusted to handle deliveries, replenishing supplies, turnover inspections, etc.  A property manager will charge you 20%, but there are other ways to do this.

For a first time investor, you may just want to do LTR first so you have a consistent amount coming in and if it cash flows you can add to the principal or reserves. STR has a lot more risk given the seasonality swings and I cannot understate the time involved in bookings and customer service.

Having said that we DO have STRs here in St Augustine, Florida in prime areas in the $400s.  Reach out if you are interested in this market!

Best of luck to you!

Mindy

I have a tiny home on my property and can't recommend it enough.  It is booked every weekend.  I believe the success is 1. cute factor, 2. price in an expensive town 3. demographic that is underserved.  From the hosting side it is a 20 min turnover and there are no parties with just 2 guests.  I just wish I could have 10 of these!  Much preferred over normal size homes.

Hi @Michael Belz !

I started my rentals with Lodgify a few years ago and it was the right decision. If you plan to do 2 or more calendars, automated messaging etc, and ultimately direct bookings, then it is a no brainer.  It is not expensive. 

For the purchase of future STRs I think AirDNA is a good tool but also use your own knowledge.  Their numbers are just one way of looking at it and may not be accurately what the rental could do.  I think it is worth the money if you are constantly looking at for sale properties like I do.  You don't need it to run your own rental however it is interesting data to review.  If you want this data, I prefer Pricelabs. It has been invaluable in my business and syncs to Lodgify.

For just getting started on your first rental I think it is fine to just start with one booking plaform but start to learn now about what tools will help you with occupancy and bookings. Highly recommend listening to podcasts and youtube shows to get up to speed with tech and what others are using.  Best of luck to you!

Quote from @Stefan St. Marie:

I see this a lot, and I think there's been so many bad projection tools on the market that the "what did this house earn" is a valid question.

For investment properties there is a true number and buyers want to know how that compares to the projections. 

What we need though is a standardized way to measure the metrics. Usually expenses are always understated and revenue is over stated. 

 Hi Stefan,

Thanks so much.  It's hard because we are also comparing experienced investors that run STRs already and people that have never done it before.  Is it realistic to think the numbers would be the same?  

Thank you @Kate Stoermer Totally agree.

Quote from @Henry Lazerow:

If it was priced right would sell in 1 week. It's likely priced high. At 10% gross to list price that really low for a STR. You can easily find long term rentals hitting those numbers.

It is priced on the real estate value not at business value. I would say 2/10 are investors, the rest looking for primary homes. Our DOM are 45 for this market. Nothing really selling in a week. 4 groups to my open home today and 1 showing in 6 days. Not bad seeing as there are 40 other listings in the neighborhood. 

7 days on market as of today but will be open to a price change after another week. I do need to sell and am ready to move on to other investments. Agree with everyone and won't be sharing financials until they tour and or provide pre approval/POF. Thank you!

Quote from @Michael Baum:

Hey @Mindy Nicol, yeah the others hit the nail on the head.

FB marketplace is a big crazy place with TONS of looky loo's.

I also think you are overthinking and taking things a bit personally. If I am looking at a operating STR, I know where to make changes and opportunities. I wouldn't be looking at it if I couldn't make an improvement. You never know if those asking are experienced so they might not ask. Of course even if I did want to get some ideas, I wouldn't be asking on my first contact. I would wait until further down the line.

Frankly, you should just post and provide all you can and not worry about what others need to do or how they can run it or the context. That is on them to figure it out.

Are you listed on the MLS with an agent as well? How does your price look vs comps? Are you asking a STR "premium" for the property?

Thanks for the response. To clarify I put the link on an STR Facebook page (not Marketplace). I am an agent and it is on the MLS. Based on our comps and some repairs I already know about I listed it with an initial price of $485k. It is 100 years old and not perfect, but has the charms of an old house that guests appreciate.  As time passes I may have to drop it but there are similar (less cute) homes for less.  

I also wonder if these people just want to compare my numbers with theirs and have no intention of buying. Or may just be nosey, or want to be hosts but have no money.  I am going to refrain from sending out the financials unless people are serious buyers. Thanks for the response!

Since posting my STR for sale on a STR Facebook page, I have been bombarded with requests for financials.

The financials are not bad: Asking price is $485K. The property produced $48K gross over the past year. I include the operating costs and a month by month gross/net, NOI, cap rate etc.

I'm just wondering why all the financial requests. I send them, and then get crickets.  

Will these people work as hard as I did on the property to get bookings?  

Do they think this will just happen on auto pilot and they can attain the same as me?

They don't ask about context of the bookings and the types of bookings I took (including one mid term tenant).

They don't ask about the POTENTIAL and where I see the opportunities? Or questions about the market, visitor stats, comp set?

Nobody is asking for a showing either.  It's like the real estate (cute bungalow) and opportunity for growth doesn't matter.

Has anyone else experienced this?  Why is the decision based solely on what the past owner did or didn't do?   As a realtor, I review these financials all the time and I find them more misleading than helpful.  There is always CONTEXT.   Past financials is only one part of the picture.  Don't we want to seek growth and create further opportunities for revenue as investors?  Even if it was a low performer (which it isn't), isn't it part of the game to reimagine, see the potential and make it a success?  That surely would be the upside.  

I would love some perspective here.  Thank you!

Investment Info:

Small multi-family (2-4 units) buy & hold investment in St Augustine.

Purchase price: $230,000
Cash invested: $200,000

Two homes on half an acre. CURRENT FOR SALE.

Homes were in disrepair and needed immediate renovation.

What made you interested in investing in this type of deal?

Attracted to 2 homes on unique wooded property.

How did you find this deal and how did you negotiate it?

MLS. It was a cash purchase.

How did you finance this deal?

Cash

How did you add value to the deal?

Major rehab on the land and both homes over 1.5 years.

What was the outcome?

Stunning transformation

Lessons learned? Challenges?

Major lessons learned in all areas. See my video on this for more info.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I am a real estate agent.