All Forum Posts by: Richard Evanns

esteemed listmates

I have some friends who have a real estate problem - but don't know it. 

SITUATION:

They have a great 3 bedroom house in San Rafael, with About $600-700k equity. Bought for around 900, worth at least 1.4 now. Its in an awesome hood and they should never sell it, ever, unless they absolutely have to.

 But, They are outgrowing it. They make together, about 400k a year I would say. 

They want to sell their house and buy a bigger one. I am saying- DONT SELL.

They are saying: BUT we cannot come up with a down payment for the new one unless we sell the old one.

POTENTIAL OPPORTUNITY:

They have a rich RE investor stepmom willing to buy the house they need, in cash (through a 1031) and do some sort of seller carry deal. 1.8mil 4 bd house that would be suitable for them. Terms TBD. 

QUERY: How do they 

-come up w downpayment for the new house without selling old house (I suggested heloc);

-Structure the seller carry in such a way that they would be able to buy and keep the new house without too much worry of not being able to pay later?

 Thanks for all the insight. Re this, 100k is just my estimate of what a "successful" property does in the market. This is backed up by a good amount of data and a PM i know who manages 15 or so STRs up there. A valid question though, because i did NOT come up with 100k based upon estimated nightly rate x occupancy- which might be a better way to look at it. 100k is kind of a lazy estimate tbh.

STRestimator huh.  NEver heard of this- will have to take a look. So many platforms/tools to figure out.

My story is that, I am an RE investor been doing it a few yrs, run STR's also in LA and a couple surrounding places, but never really studied it, and as a consequence, been on the struggle bus of late now that the market isn't white hot- so, need to ramp up my game- i bought my last 2 STR's based on zero research basically (didn't even know airdna existed till mid 2022) and trying to do the next one right---

Esteemed listmates,

I am looking at a particular property in a market that I have some ok knowledge of. (Have been poking around there for awhile, haven't bought yet, know a local PM who is a great guy and gotten alot of data from him, done alot of database research, been in escrow a few times, but never panned out) Not a complete noob, but also very far from anything resembling really knowledgable.

So i am looking at a property, 3/3 2800 sf poolhouse on acreage, has all (or many) of the desireable characteristics that one would want in this market. However- The AirBNB revenue estimator tool from BP (And AirDNA also, as I have that too)- estimates the revenue at $48-50k yearly. I would estimate something like this at about 100k.

AirDNA is literally off by a mile. That bothers me alot to see, as I have the nagging question "Does AirDNA know something about that partucular spot that I don't?" The PM and the agent don't seem to think so, but of course they want me to buy it.

Query: Has anyone had a sitch where AirDNA estimator is just a million miles off? Especially in a market with alot of STRS? (This is right around Yosemite Natl Park so lots of STR data to go from) (also FWIW awning has it at 92k which is a little closer to what I would think- but i also find airdna to me more reliable in general than awning)

Esteemed listmates,

Im looking to buy an STR in a pretty good vacation market here in CA. Im running numbers alot of different ways, but in all my investing (and I am not new at this) my underwriting has been gorilla type math at best, and I have done well (in most but not all!) cases because the market was blazing hot and STRs were a no brainer. But things are changing now.

So I am just curious - assuming I will be paying a PM the usual 20% for at least the first year (which I probably will but not 100% on) - is there any general guideline people have found useful for what is a reasonable price to pay? I have heard people say they apply a 2% rule, but I am seeing 1.5% at the very best, and that ain't that easy to come by, and that is after all the work goes into establishing it.

Or, if measuring by CoC, is there a CoC that people like to hit on STRs? I have heard 20%, but I also cant seem to find that either. Perhaps this means i just haven't found the right deal? Or are these expectations relics of the past when rates were lower and profits were higher?

Curious thoughts and experiences/.

Thanks for the responses.

I just wanted to make sure its not language/culture barrier that is causing me to dismiss some of these- that would not be cool for lots of reasons- but here in LA in the LA rent control/tenant friendly environment- MTR hosts are pretty paranoid (that is because as alot of you probably already know- 30 days creates a legal tenancy)

Invariably though these people act weird, wont be vetted, never have reviews, etc., so I'm glad others feel as I do. I would be interested to hear anyone that actually went through with one of these, and what the actual "scam" is - that's where I can't really put my finger on it.

The $ is in Airbnb's, and therefore our, pockets, before anyone takes posession of the property, so I am not sure what the actual angle would be on one of these- but I also don't really want to play it out to find out.

Listmates,

I have been doing STRs for a few years now , here and there in LA, Joshua Tree, and some of the mountain communities.

I own an MTR in Los Angeles. Its not in the greatest area, it is north east los angeles, but more east than north (Northern end of Lincoln Heights for those familiar). I have done well for a year or so, then last three months, have been basically dead, except for a few leads that didn't pan out for reasons not relevant here.

QUESTION- Over the past few months I have had alot of "suspicious" seeming leads- people with no reviews, who just joined, clearly not english speakers- many of whom have the same "pitch", making me think they might be bots of some sort. I followed up on a few of the earlier ones and they made me kind of uncomfortable, as they would not subject themselves to any sort of screening processes, wanted to do business outside the platforms, etc.

However, I am continuing to get more of these- and i am thinking that maybe just because these people are not native speakers (chinese i believe they mostly are) that maybe I am just misunderstanding them and/or miscomunicating andd it is possible they are legit?

Even though they "feel" kind of "scammy", it could just be a communication thing, and I can't really figure out what the "scam" would even be really, as I have never played the scenario out with one of these people.

I am curious if anyone else in the LA Area- or any MTR area I guess- has similar experiences with these sorts of inquiries, which have been popping up lately- and if anyone knows about them/can shed some light on their legitimacy/nonlegitimacy.

Any info appreciated- my vacancy right now is killing me on this property--and it was solid for a year, now vacant like 3 months.

This is a great question.

So, my first name is Richard, but the name I go by, which is my middle name, is not in any way american. This is what i go by with all my friends and family. This is what I grew up with. My family has never called me richard in their whole life.

I have always gone by richard professionally and continue to do so. it wasn't super intentional; richard was the name i went by for awhile (college, grad school) but i didn't love it. I can't 100% explain why i went by one name vs the other, except i can say that i intentionally decided to go by my middle name in my personal life at one point and made a total switch. I kept richard professionally. I literally have 2 names. People who see them overlap think its odd. 

But honestly, its not a big deal, no one cares that much, and it doesn't matter. I am a guy who has 2 names.

I started my business in 2010 and had no business really succeeding at it. I had great success.

Would it have been the same if used my preferred name?  No clue. I am in LA so maybe nobody here cares much. Or maybe they did- i will never know. But one thing I do know is that, nobody ever looked at the name RIchard and thought "huh I dunno about that guy named Richard"- would it have been the same if my name sounded like it was off the terrorist most wanted list? Like i siad, we'll never know.  In LA, maybe not. Alot of people figure out my middle name because everyone looks me up anyway, and the ones who are middle easter/arab always comment on it as a positive. so really, who knows.

But when people call me Richard, as so many do, I do not feel weird about it in any way. I do not feel inauthentic, or like I did something to placate a racist society. I feel fine about it, and it worked for me. it is my name that everyone knows me as, in my professional life.

Like real estate, we are confronted with a set of problems and circumstances, and optimal handling of them creates optimal value. You could probably be successful either way; but there may be some people that don't love the foreign name, even if they don't realize it themselves, they may gravitate elsewhere. Optimizing your situation may entail handling this potential problem.

I also think Sapir is cool. I think Sophie is cool too.  (Sapphire sounds made up and not serious, i would not advise going with that one)

I guess my point is that, going by a different name does not necessarily have to mean your going to feel inauthentic or its going to be weird. So many posters here are preaching authenticity- I don't really see going by another name as an act of inauthenticity. 

(Note, this Might be easy for me to say, since the name I go by is actually one of my given names, it just isn't the one all my friends/loved ones call me, and isn't my preferred one)

helocs on investment properties in general are almost impossible to find.

I got one from an outfit called quorum federal credit union in new york. YMMW of course. but thats who i used.

@Isaac Fridmann

I will say that I have 3 short term rentals, which I bought before I really knew what air DNA was yeah yeah it was and before I really thought about underwriting them very much.

I'll just say that the airdna numbers have been pretty close to my actual numbers. (On the one I manage I'm right there because I'm a pretty "average " manager and on the one my ex fiance managed I exceeded it because she's an awesome manager)

I am currently buying a new one and my real estate agent agent has put me in touch with a short term rental manager who is very experienced in the area and they have given me numbers for their other properties.

For me right now my plan is buy a short term rental and get a local manager to get it going and up and running for at least the 1st year at thier usual ~20% fee and then I would plan to take it over once the hiccups are worked out.

Strs were the wild west but now not so much so there is no reason you cannot find local property managers to give you data.

If your agent doesn't know of any then they probably aren't a great str agent....

Hah! So interesting how peoples experience differs.

My desert guests have been a huge headache. Big groups, trash house, probably get wasted, don't report/admit when they break stuff. I feel like people go to the desert to party (at least some do) so you kinda get where that can end up. 

My mountain guests in pine mountain club (small little mountain spot up north of LA) have been a dream. 

My "mid term" guests here in my LA place are almost all awesome as well. They have jobs and are responsible people who can afford a furnished rental for their family/themselves- they are almost all homeowners themselves i am guessing.

I have a buddy that does an STR in the desert also, he has similar experiences.

@Michael Hyun my ex manages our place down there, and is effective at doing it remotely. I would encourage you to try and get some boots on the ground there and do remote management. IT really isn't that bad once you get systems in place. I know like 3 people who have STRs there and they all remote manage. (In fairness, you might be a busier person than they are though lol)