All Forum Posts by: Ryan Moyer

Seems like a brutal market at current prices.  Even Bill Faeth couldn't make it work there and listed his place at a loss.

I don't always spend $80K with strangers on the internet from across the world, but when I do it's with a member that has only 11 posts, all of which are them trying to advertise.

No wait, that's not right.

Not to put a damper on things, but there's no room for sugar coating it when you're thinking about picking up $1M in debt, so I'll just say that honestly sounds like a terrible deal to me personally, unless you think you can heavily outperform their revenue numbers.

Annual revenue of 10% of purchase price is pretty much the very low end of the barometer for STR. Most people shoot for a good bit higher. And that's a barometer that was set even before rates went way up, so it gets even harder to justify now.

But at least in those cases you were getting a solid appreciating asset on a foundation.  In this case you're basically just buying the revenue, and it's not very impressive revenue relative to the purchase price.

Financing is going to be very difficult on something like that (and likely even more expensive than normal) to boot.

There's just no way anyone knows, and even moreso, no way you should believe that random people on an internet forum do.  There are people that make a lot of money to make this predictions and even they can't figure it out, so a bunch of randos on BP are all just guessing, as is anyone else.

The one thing I'll say is the American economy has proven far more resilient than most expected.  Inflation is already back down around 3% while the majority of the rest of the western world is still struggling in the 6-8% range.  And we've done it with the stock market almost fully recovered back near ATH's, the housing market staying strong despite huge changes to interest rates, etc.

Maybe it's all a mirage and one last hurrah to hold on before the big crash everyone has been anticipating finally does come, and I've been a bit of a doom and gloomer myself, but I think if you'd asked a year ago if it were possible to get back to 3% inflation in a year with the stock market within 5% of all-time highs and housing prices still within 5% of the peak every single person would have said it was impossible.  Yet here we are.

There's just no way to know.  You just have to consider your own appetite for risk vs. reward.

How good of a view are we talking about?

There's a couple of 4br pool cabins with 4/10 views (but very close to town) listed for around $1M right now.  And a 6br pool cabin listed for $1.1M.

Saturation is not only numbers, it's quality as well.  As much as many markets have been saturated with numbers, many have also been saturated with quality.

Remember, the selling point in the Smokies in 2019 was that the cabins were run by dinosaur PM companies that charged 40%, didn't list on Airbnb/VRBO, didn't use dynamic pricing, didn't have any unique features to the cabins, didn't respond to guests quickly, had poor ratings, etc.  So if you came in and self-managed, threw a $200 Arcade 1up (now $600 each, because everyone is buying them) in there, responded to guests quick and got good reviews, you could stand out.

But that's no longer the standout feature it once was.  There are a lot of people doing that.  Just like in 1995 if you had a hot tub you couldn't swat away the bookings fast enough, but now a hot tub is no longer a standout feature, but a minimum barrier to entry.  Every year we creep closer and closer to self managed, 4.99 review score, fast response times, game room/theater becoming the standard rather than the standout.

The Smokies, at least, is better than a lot of markets on that front.  I have 10 properties in Orlando and who-wee, let me tell you, if you're only putting 150k into crazy cool upgrades on your property when you buy it, you're lagging behind.

This is one of my properties in Orlando: https://www.airbnb.com/rooms/52612233

Three years ago I would have said that's a 98th percentile property in quality.  Now I would say maybe 75th percentile?  70th?   We built a 3/4 size X-wing AND Tie Fighter, built a full commercial retro arcade, toddler secret clubhouse, coffee bar, etc and I would say we're maybe 75th percentile on a good day.  Because there are houses with bowling alleys, laser tag arenas, lazy rivers, etc IN THEIR HOUSE now.

5 years ago if you threw a pool table and a foosball table and a dart board in the garage in Orlando you had a "game room".  Now if you do that you have a piece of trash that no one is going to book for $99/nt despite your $800k mortgage at 7.5%. 

Orlando is ahead of the curve on that because that kind of thing is the main selling point there, but it's coming everywhere. I've used my STR host knowledge to aid in our traveling. This year we took a family vacation to Lake Havasu because I knew it was oversaturated with awesome pools and great hosts, and I knew we could get an amazing place at a cheap price. We stayed in a place with a full on resort style backyard (I actually asked the owner what it cost....$800k just for the pool area!!!) like we had our own private Hawaiian resort. For $249/nt. OVER SPRING BREAK!

Again, it's market dependent, but it's coming everywhere.  3 years ago if you had a pool cabin you had to beat off the bookers with a stick, even in the slow season.  Now there are more and more of them, all with the same arcade machines, all with the same 5* reviews.  It's all a matter of time.  The things that made a super property 5 years ago make an average property now.  And the things that make a super property now will make an average property 5 years from now.  The secret is out, and people are going to have to constantly stay 3 steps ahead unless they have a 2018 mortgage that allows them to book at rates that drag the whole market down, all while they tell new investors about how their property is "crushing it" and getting new people in over their heads.

This is the weirdest comment I've ever seen.  Serious question, did you start investing in the markets like 3 months ago?  Because this "crash" isn't even a blip on the radar of stock market crashes.  The market crashed 28% in 2018, 31% in 2020, and 21% in 2021.  Not to mention 2008 and 2001 which were much larger than any of those.

Sorry not trying to disparage, just having a good laugh as a guy that lives and breathes in the stock market.  This isn't even something worth getting out of bed for yet.  We are like 6% off of all-time highs right now, lol.

This comment is like a football team giving up a field goal on the opening drive and saying "boy, we're really getting crushed, I'm not sure it can get any worse than this!".

Nope.

This is one of the ways many management companies hold you hostage.

Huh?  He was answering a question on what his rates were.  PM rates are based on gross revenue, not net revenue.

In general though, people typically talk about gross revenue because you can underwrite based off gross revenue, not net, since expenses (and especially debt service) are going to be very different from owner to owner.

I don't think Bill has any on 30A.  He has several in Gulf Shores.  Of course his property also ranks #1 on Airbnb in that area so his returns are better than most.