All Forum Posts by: Ryan Moyer

Quote from @James Hamling:

Quote from @Chris Seveney:

Quote from @James Hamling:

@Collin Hays how did this ever make sense at $850k????

Honestly, I don't see how it makes any sense at even $500k.....

The property itself I'd score a 7. It's got some nice appeal points but it's really nothing all that special. 

For lot I'd score it a 2. 

There is a miss-match for me. It's just "a-place" in "a-neighborhood" that is in the area of popular vacationing..... No, that's not how it's done in my book. 

You need to be in the trees, can't readily see neighbors, with views, something that feels like your IN the vacation not near or around it. 

To me this place grabs me as an over-flow rental, not a primary inventory unit. 

To me it's like getting a house across the street from the lake vs ON the lake. Sure it's close by but that is not the same by a long shot. 

For me STR's have to have something of enduring intrinsic value in what it is, not just "a place" in "a area", that is what hotels are for.

STR are supposed to be an experience in and of themselves.

Am I just too picky? 

Thats where one get's the security from in a STR; that it's something special, unique, an experience.

 We were looking at a non performing note that was close to foreclosure sale. The buyers paid $2.2M for it and that was insane - no numbers made sense on this property. The noteholder was adament the property was worth atleast $2M. We had it valued at $1.2M-$1.4M.

The noteholder bid $2M at auction and took it back and now it just continues to sit. New homes similiar to this one and are nicer are now selling for $1.3M.

Ya-know, the most wow thing in that is you'd think a person who's had the savvy to achieve a financial position where they can readily bid and hold a $2m position on just 1 asset... you'd expect them to be so much more intelligent and not emotionally driven. 

It's not to say there is no emotion, of course there is. Look, when the tariff implosion hit yeah I took a rather nasty hit in 2 portfolios. It hurt, I felt the emotions, $140k gone in literally hours. I sucked it up, and I started choppin wood. I let the intelligence side take over, re-group, do what I could down recouping, then played the bottom and way back up. 

Bad things happen, sometimes out of the blue and it hurts, but there survivable. Chasing emotion is how one goes bankrupt. 

I just don't understand when smart people do such stupid things. 

Properties are not like wine, they don't get better over time sitting on the shelf. There like beer, they get really funky the longer they sit in the sun. 

As a property manager in addition to STR owner, I would say fewer than 10% of the clients or potential clients that come to us ever put pen to paper to even try to underwrite the property before buying it.

People are just grabbing million+ dollar loans on faith, without spending the meager few hours it would take to actually underwrite the property.

I wonder how many people would take a $2M small business loan to buy a business with so little diligence.

Still not a good deal.

We've got a ways to go yet.

This is a real estate investment forum, so not many people here with arbitrage experience, and frankly you likely won't get the replies you're looking for here as that approach is viewed very negatively amongst investors.

It's also something that is much more difficult to make worth it these days, as long term and short term rates have converged in many markets to the point where there is often not enough juice left to make the squeeze worth it.

Quote from @Kyle Wheeler:

What stands out most to me is how a small drop in visitor numbers creates a large drop in occupancy. That's the nonlinear risk in STR investing that doesn't get enough attention.

It's absolutely insane to me how few investors understand these dynamics.

Even here on this very forum in 2021-2022, when I was arguing that this future was likely, there were SOOOO many people that were equating a 5-10% drop in visitors to a 5-10% drop in cashflow and saying it wouldn't be a big deal because they could give up that amount of cash flow.

Quote from @Dan H.:

Quote from @Ryan Moyer:

Quote from @Dan H.:

My highest occupancy STR has 6 nights of vacancy until the end of August. 2 of those nights are single nights so may not book. The other 4 nights will almost certainly book. So 2 nights vacancy over the next 2.5 months, >$400/day average rent for this period (not including OTA or cleaning fees). This is my best performing, but does show what is possible.

https://www.airbnb.com/rooms/743466187461028591?adults=1&...

Good luck

 It's all relative though.  I'm assuming you probably got into that property at a lower price/rate than current values, because I would think that is a $1M+ property and at $1M with 8% interest $400/nt isn't going to cut it even at 100% occupancy.

 It is 2 units.   That is the higher occupancy unit but the other unit’s rent is similar.   Its adr is less due to lower occupancy in the high season.

In addition, I suspect using your numbers 14.5% rent (not including cleaning and OTA fees) to purchase ratio ($144,800 rent for $1m) for the year would do great.

This property was purchased Dec 2021 for $1.2m (this was $150k below appraised value).   I did value adds.  It is likely near $2.1m today.   Rents (not including cleaning) will likely fall between $160k and $180k which seem low for value but reasonable for price paid. the two units together are ~1300’ so sustained maintenance and cap ex are small.  

value add had cost of ~$120k (one unit light rehab other unit extensive rehab).   So $1.45m for $2.1m valuation so $650k equity gain above costs.  

Rents $160k (using lower end or my expected rent range), piti $79,584, so $80,416 to cover expenses not included in the piti. 

It seems like the numbers have worked out fine.

By the way the other property I purchased in Dec 2021 has over $1m of equity over cost.  When I purchased it there was large negative cash flow (rent was $6.2k/month).   Rent now is just over $200k/year, piti $113.7k/year.   Also seems to be doing alright.

I agree that since q2 2022, RE is more challenging. This is nationwide as the rates have increased everywhere. In Florida the insurance/HOA has also increased substantially. I would do either of those Dec 2021 purchases at today's rates, but granted my piti numbers would be much higher and therefore my cash flow would be much less. Note I would still have the equity gains. I suspect I would have very modest positive cash flow (I have not run the numbers).

Good luck

So long and short of it though, at current prices for a new investor coming in if they were to buy your place from you they'd be looking at a $2.1M purchase versus $160k gross rents. Yes it was a great bargain when you bought it before STR became super mainstream but that is true of all STRs.

Compare that to my property in Florida is only slightly off in gross rents at $145k, but if I were to put it on the market it would sell in the $700k-$800k range.

Now, unlike most around here, I don't have any particular love for Florida nor any particular disdain for California.  I actually quite like California and would love to own there, and certainly wish I owned your house at pre-covid pricing compared to mine if I could go back in time.  

But you can see for an investor walking into the market NOW and looking at $160k gross on a $2.1M purchase versus $145k gross on a $750k purchase and there's just no comparison, even with insurance factored in.

Quote from @Collin Hays:

Quote from @Ryan Moyer:

Quote from @Collin Hays:

Quote from @Ryan Moyer:

Quote from @Collin Hays:

I’m living this nightmare now.  We had one home listed on Airbnb at the homeowner’s request. Then they sold the house and I had to cancel all reservations. Now Airbnb wants to fine me cancellation fees for all if that.  Been fighting for days now. 

This is my concern as well.  At least when people sell the home they may have a large influx of cash to cover the penalties.  But as a PM if an owner drops us or sells their home how is that going to work?  We get all the penalties and no cash to cover it.

Of course now we build it into our contracts that the owner has to cover those fees, but we have legacy homes where the contracts were signed before these host penalties exist so obviously nothing about it in those contracts.  Now one of those owners is listing their home and we have $100k+ of future reservations on the books that would amount to probably around $20,000+ in cancelation penalties.

I think Airbnb/VRBO really need to come out with an official and very public policy about how this affects PM's, otherwise it seems like they could be quietly making an entire industry that they rely on (property management) unfeasible, because as managers the properties are under our account, but we don't fully control them.

And that's just the fines.  If they de-prioritize the account in search results because of the cancelations, that could potentially tank the listings of all the other owners using the same PM.

It's a mess.

Airbnb sticks it to PMs - and homeowners - every chance they get.  I’ll close shop if I ever have to use them - it wouldn’t work. 

 True enough and I agree, though in this case we're actually talking about policies where VRBO is even worse towards PMs and homeowners.

Remember, the host cancelation penalties were VRBO's idea before Airbnb.  And they remain the one who are more strict about them and lenient in forgiveness of them.

 Never had an issue with VRBO in this regard. 

Sure but that doesn't mean the policies don't exist, just because you haven't run into a scenario where those policies needed to be enforced.

I'm all for piling on to Airbnb hate as much as anyone, but it just seems a little silly to use an anti-host policy that VRBO invented, and that VRBO is more strict with, to criticize Airbnb as anti-host.

Anti-host cancelation penalties only exist because VRBO invented them, not Airbnb.  VRBO's punishments are more harsh (they suspend the listing for 7 days on first offense, Airbnb does not), and VRBO is less lenient in waiving them (Airbnb will waive them on sale of home at least for now, VRBO will not).

Airbnb is no friend of hosts but VRBO is not much better these days.  VRBO has taken note that the best way to improve revenue and please shareholders is to appease guests at the expense of hosts.  Host cancelations were a real legitimate problem for guests that probably needed something to be done, but VRBO damaged the industry (for hosts) by making their first move a massive overcorrection in the opposite direction.

Quote from @Collin Hays:

Quote from @Ryan Moyer:

Quote from @Collin Hays:

I’m living this nightmare now.  We had one home listed on Airbnb at the homeowner’s request. Then they sold the house and I had to cancel all reservations. Now Airbnb wants to fine me cancellation fees for all if that.  Been fighting for days now. 

This is my concern as well.  At least when people sell the home they may have a large influx of cash to cover the penalties.  But as a PM if an owner drops us or sells their home how is that going to work?  We get all the penalties and no cash to cover it.

Of course now we build it into our contracts that the owner has to cover those fees, but we have legacy homes where the contracts were signed before these host penalties exist so obviously nothing about it in those contracts.  Now one of those owners is listing their home and we have $100k+ of future reservations on the books that would amount to probably around $20,000+ in cancelation penalties.

I think Airbnb/VRBO really need to come out with an official and very public policy about how this affects PM's, otherwise it seems like they could be quietly making an entire industry that they rely on (property management) unfeasible, because as managers the properties are under our account, but we don't fully control them.

And that's just the fines.  If they de-prioritize the account in search results because of the cancelations, that could potentially tank the listings of all the other owners using the same PM.

It's a mess.

Airbnb sticks it to PMs - and homeowners - every chance they get.  I’ll close shop if I ever have to use them - it wouldn’t work. 

 True enough and I agree, though in this case we're actually talking about policies where VRBO is even worse towards PMs and homeowners.

Remember, the host cancelation penalties were VRBO's idea before Airbnb.  And they remain the one who are more strict about them and lenient in forgiveness of them.

Quote from @Nathan Watson:

@Josh Havekost, any updates on your situation or experience with Home Team Vacation Rentals? I have been exploring them and other groups like The Short Term Shop to get started in STR investing.

Would you mind providing a full breakdown of HTVR's fee structure for potential investors like myself considering them vs other groups? You mentioned 20k finder's fee (is this for each property sourced or a one time fee for their program/etc), 10% maintenance fee on gross income, $18/SF design fee. Is there a separate furnishing fee or any other fees/charges you experienced? 

For anyone else, have you experienced a similar pricing structure when setting up STRs apart from HTVR? Or, do you simply work with a realtor comfortable/familiar with STRs to source deals in your desired market, let the seller pay the realtor's 6% fee, find a designer to do design/furnishing, then decide between self managing vs hiring property management and paying the associated fees? 

I don't mind paying someone for value if it saves a significant amount of time and work. However - people love to buy, but they hate to feel sold. If you feel like you are being nickled and dimed every step of the way, there may be a reason you feel this way. Then again, purchasing a true "turnkey" property means you are typically paying a higher premium in exchange for someone else delivering you a cash flowing, low maintenance asset.

I would gander to guess that 99% of people do it the latter way you described.  They find the deal, hire their own designer, etc.

The reality is that it's expensive either way.  $18/SF actually seems pretty reasonable if they're talking about both adding Airbnbable amenities and outfitting the property as an STR.

Because even just outfitting it as an STR is more expensive than you'll prepare yourself for.  I don't know how many pillows or towels or sheets you think you need, but even if you're trying to hilariously over predict the number, you're probably guessing too low.  A well stocked kitchen, carbon monoxide detectors, fire extinguishers, etc.  That's always my least favorite part of taking on a new managed property is going through what is needed with the owner, because it's always expensive and they're always under-equipped.

After the initial setup it's the same.  I think it's impossible to operate an STR without feeling nickel and dimed, even if you're self managing and nickel and diming yourself, just because there are so many expenses that you would never consider before you actually did it.  That's more true now than ever before as Airbnb has further and further stripped hosts of their ability to reasonably recoup costs from bad guests without sabatoging your own business.  3rd party damage insurance like Waivo or Safely is a must these days but that's yet another cost that feels like nickel and diming.

It's just the reality of the business.  People just didn't care as much pre-2023 when everyone was rolling in money.  And setup costs didn't hurt as much when you were cash flowing $8k/month right out of the gate because you knew you'd recoup it fast.  It's a different ballgame now with returns depressed, but the reality of the business hasn't changed and there's not really any way to skip over that part without damaging your future returns by more than you're saving up front.

Quote from @AJ Wong:

Quote from @Ryan Moyer:

"One is an oceanview estate on acreage with a remarkable architectural styling on the north coast projected to produce $230K+ at at asking price of $1.8Mish and another in house listing on the north coast asking $1.649M that should yield $180K+/- in gross annual income. The final prospect is a $2M+/- direct water access estate on the southern OR Coast that projects well at $180K+ in gross annual income."

These are terrible numbers, especially at current interest rates.

I know little about them but it seems like all marketing fluff.  Floral prose to pretend like wholly average or even below average income/price ratios are some kind of special.  The Peter Lik of property management.

Terrible? The majority of our investors are seeking a long term second home that covers costs and even these could be double digit COC returns if structured properly. They are the only ones that are eligible, I didn't say they were the most lucrative. If you don't know about them - research before commenting.

If the owner's goal is to have a second home that subsidizes some of the mortgage part-time, then sure—that might be fine. But if we're talking about STR investing from a return-on-capital standpoint, the numbers aren't compelling.

$180k gross on a $2M purchase isn’t just “middling”—it’s frankly poor. You don’t need standout marketing to generate that. Bill Faeth, for example, grossed $500k in his first year on a similarly priced home. That’s what “great at marketing” actually looks like.

If the claim is that Wander excels at marketing themselves to prospective owners, rather than marketing their properties to prospective guests, I’d agree. That’s where the Peter Lik / Monster Cable analogy fits—positioning average returns as premium experiences to people who might not know better.  

I also looked into owner reports across Reddit and other forums, and there aren't many but they generally say the same thing: increased expenses, lower-than-expected bookings, and high upfront investment just to meet Wander’s standards.

Their Trustpilot page is also worth examining—27 reviews, all from one-month span, all from brand-new accounts with no other reviews. That’s not a coincidence. Combined with the fact that they’ve removed their Google reviews presence and now control all visible guest feedback on their own website (other than the obviously faked Trustpilot push they gave up on), it gives off a tightly managed PR strategy rather than organic transparency.

I’m not saying they can’t deliver a good guest experience—but from an owner/investor lens, there are multiple red flags worth serious due diligence. The math, the marketing, and the lack of organic third-party validation just don’t align with the kind of performance being sold here.

"One is an oceanview estate on acreage with a remarkable architectural styling on the north coast projected to produce $230K+ at at asking price of $1.8Mish and another in house listing on the north coast asking $1.649M that should yield $180K+/- in gross annual income. The final prospect is a $2M+/- direct water access estate on the southern OR Coast that projects well at $180K+ in gross annual income."

These are terrible numbers, especially at current interest rates.

I know little about them but it seems like all marketing fluff.  Floral prose to pretend like wholly average or even below average income/price ratios are some kind of special.  The Peter Lik of property management.