All Forum Posts by: Scott K.

Wholesaling is pretty close to arbitrage... it's not investing, but there's nothing wrong with it. It's just a job like any other.

If you aren't fortunate enough to have the capital to invest, it's a fine alternative until you do.

If you want to learn about arbitrage, this forum isn't great. Look up 'airbnb automated' on facebook.

 My accountant would say otherwise. Specifically an llc incorporated as an s Corp. Also the real estate professional status should help write off losses on income. Why do you say this? 

The way I think about money and my various businesses, is, 'could this money be earning more elsewhere?'. In your case, I don't know what else you have going on, but it may be worth considering what is this money going to be used for once you have it. I'd also say however, if you're only earning 12% and thats including your 20%? That's pretty bad numbers-wise. You could do a long term rental with way less work and earn similar amounts.

Bigger is 'not' always better. Theres a sweet spot in any market. Go too big and you run out of clients. Go too small and you have too much competition. You should really pick an area and do a lot of research on what size house makes the most ROI. Typically, bigger is better as they've said, because 1. less competition 2. less work for you and 3. better clients (aka richer clients make less messes, partiers tend to find cheap places) but still, for instance in my area, the sweet spot are houses that are $300k-400k. More than that and the prices don't rise as fast. ALso keep in mind, STR houses typically need a LOT more rehab than a regular home. People who are STRing want amenities like full basements, pools, hot tubs, etc. If you gave me $300k, I'd do this. Buy 2 $300k houses for $70k down each. Then spend $50k on each rehabbing, and $30k furnishing. They would be 6 bedroom, 3 bath houses, roughly 3500-4000 sqft, and they'd generate about $150k revenue each.

Avoid HOAs like the plague. Avoid neighbors like the plague. I don't know how you think $70k is enough to build a house? Houses cost upwards of $200k-300k to build. Maybe if you built a really small one, but my insurance company has a 'cost to rebuild' that is pretty much equal to the cost it took for me to buy a place out there. Maybe I'm woefully uneducated on the topic, I'd love to learn more about that.

Besides the build cost, remember its going to be another $15-30k to furnish/retrofit the house depending on it's size. Also remember out in the poconos you have to install septic tanks/mounds which are very expensive. Make note of how large your septic tank is with regards to how many bedrooms you want depending on the county you're building in. Each one has it's own rules about STRs and septic.

locust lake is currently in a period of turmoil about strs... they just had an election cycle and luckily we had a few people elected to the board who are favorable, but before that the board had put a 2 week limit on rentals, which was rescinded after the landlords banded together and sent a threatening letter from lawyers. right now there are a lot of strange fees and things going on, but it should be fairly favorable. welcome to the fun!

Am I missing something here? You're promising a 35K investment with $20k return each year? and it's SAFER than airbnb?

How is no one challenging you on this? Show some numbers or details.

I run pretty large houses, 6 bedroom, 4000 sqft. investment cost was about $190k. They profit about $60k after everything. Revenue $125k. Not including major repairs, since we did all those with our investment cost. 'cash flow' means nothing by itself, it's more a question of, what is the Cash on Cash return %, and is it worth it to you? For instance anything above a 20% CoC, is probably good for an STR, but if it's only $10k a year, it's still probably not worth it, because the amount of work for a smaller house is pretty much the same as a larger house. (although large groups do tend to party, and do break things... so your mileage may vary)

This makes no sense. What you're doing is assigning them more value than they have, but in realit they are a 'management company'. They typically get between 10%-25% of revenue for managing your property. That's it. You should own the asset outright, and simply hire them like any other business you'd hire. This is what 'evolve' does or any of those other ones.

To add things that haven't been said:

Airbnb and vrbo can be very regional. Some places lots of people use VRBO, other places lots of people use Airbnb.

VRBO Guests I've found to be way pickier and fussier than Airbnb guests. Maybe because they're older? Maybe because they bring their family? No clue.

There's really no downside to having both. Most automation platforms support both by now and sync them easily. Additionally if you get banned or get a few horrible reviews on one platform, you will always have the other to back you up. Last summer airbnb blocked a stay during halloween weekend because, they said 'no parties allowed!' when it was a family of 6 people coming to stay. Airbnb is run by morons. I got a booking 3 hours later on VRBO.