All Forum Posts by: Roxana Daneshjou

I'm curious what people's thoughts are.  We were under contract in a town that is largely vacation homes/rentals and retirement.  It's about an hour from a national park and 3 hours away from a major economic hub.  Their market is never hot, usually average time on the market is 100-120 days.  In 20 years, their housing prices have swung wildly with the economy, tanking during recessions, but actually never going that high.  For some reason (be it the pandemic, low inventory (<50% of usual), their market has been hot - places going under contract the same day, getting more than one offer.  We were under contract on a place (marked 60k higher than the price from 3 years ago with very little upkeep), but we canceled when we realized the deck would need work and the seller refused to even give a dollar of credit. I feel like the market isn't behaving how it usually does.  Our agent kept trying to convince me that it would be hot forever, but a broker from his same company admitted to us opening, "this place really tanks with the economy because what are people going to sell - their primary home or their vacation home?".  

I guess I want to make myself feel better about walking away.  I plan on watching and waiting the next several months. My goal was to get a vacation home that I could use, also use as a rental, but also NOT lose money on (so didn't want to "buy high, sell low"). 

@Sam Shueh, this isn't in the bay area.  It's not in an area that has multiple offers, waiving of inspections, etc. We've been in that market and know how that works. 

@David M., we were from out of town, so we made the offer before we saw the property in person.  We reviewed the photos and had our agent see the property who said it was in ready to rent condition, didn't need much. So we offered as though that was the case (ready to rent), but actually, I feel there are a lot of wear and tear repairs that will add up - some needing replacement, some needing sanding/painting, etc, redoing dry wall. 

We have started the inspection process, and prior to the main inspector coming in, I've already noticed several more cosmetic issues (cabinets have way more wear and tear), deck needs to be repainted and has safety issues, areas where drywall repair is really obvious.  On their own, each thing would not cost more than a couple hundred dollars, but then it starts adding up, particularly for making a presentable short term rental.  Are these things that are negotiable? Based in California, where I have to sign off on the inspection contingencies. 

We are buying a vacation rental property in a gated area by a lake. Things are very laid back there, mostly retirees and vacation rentals. We're under contract, but I've noticed the same laid back attitude with this process (maybe it's because I'm type A that this bothers me).  For example, we are supposed to have disclosures, hazard maps, etc, and septic inspection within 7 days.  I got a minimal disclosure packet from the seller, the agent didn't even put in any notes and said "they would be coming".  It's been 7 days. They're now saying that the septic inspection will come in a "couple weeks" and that they'll take care of everything.  My home/roof/pest inspection is scheduled for this week, within the 17 days inspection contigency period that we set.  But I don't want to lift any contingencies until I have all the information that I am supposed to get and until I can negotiate any issues. If after 17 days, I still don't have the reports from their side, do I have to lift the contingencies? I guess at that point, that means they can walk away, but I'm okay with that because I am not going to buy a property without information. What if we hit near the close date, and I still don't have the info... I think that's when I would walk away.  The last house we bought was our own in a place where everything was done by the book and on time, with pages and pages of detailed disclosures from the seller and the seller's agent.  That's the only comparison I have. 

I know based off of reading this website that airDNA is not always accurate with projecting revenue.  I am looking at a 3 bedroom, 2.5 bathroom place with a bonus room.  I was thinking of doing king beds in the two main bedrooms, and then a queen + a bunk bed in the bedroom downstairs, which is adjacent to the bonus room.  Then I was thinking of putting a sofa sleeper in the bonus room.  However, airDNA drops my projected revenue by 4k and occupancy by 10% if I increase the number of people to 10 from 8.  Is that just because the way the algorithm is designed?  Is it actually better to sleep fewer guests?

@Paul Sandhu - other costs is electric, water, trash, septic, cable, and wifi based on full time living.  I have them separated out on a different spreadsheet. They are the biggest expense at $4020.  

@Michael Baum, I reached that gross figure by asking Evolve what their properties make, asking another local management company what their properties make, and then asking self-managing owners to send me their financials every time I went to an open house for a vacation rental in the area. I also spoke to my realtor who works in the area. There were obviously people who made a lot more, but I am trying to guess on the lower end, probably anywhere from 23k-26k (there were people with similar sized properties self managing at 40-50k gross). Self management scares me. I'm not taking a loan, so that actually helps me turn a profit. If I make 25k in gross, I'll get to keep about $6400 a year. I got these numbers by subtracting 15% management fee rather than 10% in case of extra costs. But then also subtracting out these numbers (insurance, tax, HOA, other costs were all calculated by actually getting quotes for electricity, water/septic, internet, cable for this house). The HOA is high because it's in a gated community with a lake with several beaches and playgrounds, a community pool, a golf course with super discounted rates, an equestrian center and archery/shooting range, as well as hiking trails. To be honest, it is a part emotional purchase because we plan to go in the off season/when not booked. But I would also like to make some money off of it with minimal effort on my part. I was thinking doing Evolve the first year just to start and then maybe seeing if I could consider self-managing? My day job is just very demanding. We have other commercial real estate investments that are much more practical and managed by family.

We are in the process of getting a vacation rental 2.5 hours from us in Groveland, CA, near Yosemite National Park in a gated community with a lake and a golf course.  House purchase price is 240k, 3 bedroom, 2.5 bath, 1520 square feet with a very large deck for outdoor dining, lounging, fire pit, and grilling.  I have made a list of furnishings for about 12k.  Plan is to sleep 10 - 2 king beds, one queen + bunk bed in 3rd bedroom, and then queen sleeper sofa in game room.  Based on my analysis of the area, and comparable houses, I think we can make at least 26k gross a year.  I'm super busy and can't do the management, so I have been debating between Evolve and a local management company (25% cut).  I cannot self manage at this time, maybe in the future.  I've read all the threads on Evolve.  Any advice?