All Forum Posts by: Scott Simpson

Quote from @Nathan Harden:

Quote from @Michael Baum:

Hey @Scott Simpson. Personally I don't see 30 day stays as a thing there.

Leavenworth especially a long weekend visit for the most part.

It is always confusing to me why a tourist driven town would restrict ways for people to visit and spend money. I am sure there are locals driving this, but are they willing to have their taxes double in order to make up for the loss of revenue?

 I 100% agree with Michael.

I definitely think that Leavenworth is a very overlooked market for STR though. I would look into like 2 night minimums because I just don't see people spending more than a few days there, maybe a week at a time but nothing more than that.

The new anti-STR laws are definitely a result of locals being fed up with what they assume as ‘STR’s driving up real estate values’. The hotels lobbied hard and won. It’s a very ideal 3 season market if you are grandfathered in.

Has anyone looked into STR in East Wenatchee where there are no STR restrictions?

Quote from @Phillip Austin:

Congrats @Scott Simpson! Let us know how the STR goes!

One of my biggest dreams I'm currently chasing is to purchase a similar type of investment in Hanalei on the island of Kauai. 

Kauai is my 2nd favorite place in the world. The nightly rates in Princeville for STR’s are incredibly strong too, I just found it difficult to find a unit with a garage for extra storage. You’ll get there too, good luck!

s.If you are ever interested in investing in MTR and STR in Hawaii down the road, we’d be interested in chatting.

Quote from @Mitch Davidson:

@Don Konipol. I haven't had to replace much due to wear and tear. I've upgraded though, to remain competitive in the market. For example, a larger kitchen table, a nicer couch, more attractive curtains, etc. And because most of my tenants have dogs, I provide waterproof furniture covers and get them to sign that they'll keep such on the furniture during their tenancy. 

@Mitch Davidson May I ask what market your MTR is in? Brilliant idea for waterproof furniture covers. I hadn't thought of that.

With the new STR restrictions in place in Chelan county, 30-night rental durations are the minimum for new entrants (i.e. not grandfathered in). I am curious to hear how much demand there is in Leavenworth/Chelan area for MTRs seeing as it's a pure tourism-driven market (there are no nearby hospitals, universities, military etc that might stay for work).

Investment Info:

Townhouse buy & hold investment.

Purchase price: $1,500,000
Cash invested: $500,000

4 bedroom golf course townhome across the street from shops at Waikoloa Beach. Purchased with another party to use as a personal vacation home + STR. Aloha!

What made you interested in investing in this type of deal?

Absolutely love the big island of Hawaii. Timing at the peek of the market wasn't ideal, but family was contributing most of the down payment to enjoy using it :)

How did you find this deal and how did you negotiate it?

MLS

How did you add value to the deal?

Still working on light remodel.

For those with MTRs, what is the 'minimum nights' requirement in your market? (assuming STRs aren't allowed). Does anyone specify min / max durations for their MTRs that differ from local ordinance minimums? 

I've noticed that very popular tourist markets with grumpy local residents tend to default to "30-day minimum rentals" (Hawaii county, San Juan WA county, Chelan WA county, etc), but major metros seem to be all over the map on minimum nights. MTRs don't seem viable in pure tourism markets (lakes, ski towns, islands, etc) is there really sufficient demand for people who can stay 30 days?

Great detail, fun writing style, and looks like your "tuition" was well spent.

I have a long term rental in Phinney ridge and crime has become more of a nuisance recently to the tenants. Graffiti has increased substantially since the pandemic too.

On a side note, I would be curious to learn more about your STR modeling too — I have been looking for places across the state, including Seattle, but the math just doesn't pencil for me. I must be missing something!

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $675,000

1925 single-family home was renovated (flip) prior to us purchasing it as our primary-residence. It's located in a hip and gentrifying neighborhood in Seattle called Phinney Ridge and close proximity to downtown and other desirable neighborhoods.

What made you interested in investing in this type of deal?

Moved to Seattle and wanted to own vs. rent (which was a mistake given the recession that hit 6-months later!)

How did you find this deal and how did you negotiate it?

Real estate agent suggested the neighborhood and property. It had been on the market for 4+ months and in late October they were heading into a dormant time for real estate. Price had recently come down $50K and we negotiated another $50K down.

How did you finance this deal?

Traditional (primary home) mortgage

How did you add value to the deal?

Landscaping

What was the outcome?

Solid rental property. Demand is high in Seattle in this area for single-family homes. With each tenant we've ratcheted up the rent to see where the max is for the market.

Lessons learned? Challenges?

As the rent we ask goes up, the less affordable it is to families to rent (at $4.5K a month, most can buy a home). I've had to compromise and 'house hack' by renting each of the 4 rooms to different folks willing to co-live. Interior cleanliness seems to take a nose-dive when strangers/friends co-live together (vs. a family renting).

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $800,000

Custom new construction build. Waterfront short-term vacation rental purchased with a co-investor.

What made you interested in investing in this type of deal?

I was looking for an investment and a vacation place to enjoy with family. We chose the San Juan Islands in WA because of it's beauty and local market appeal.

How did you find this deal and how did you negotiate it?

After a few homes slipped through our fingers we decided to look for land and build from scratch. Our real estate agent suggested that lot because it had been on the market for over a year and the seller was motivated.

How did you finance this deal?

Cash to buy the land, construction loan to build, and converted into a traditional (second home) mortgage upon certificate of occupancy.

How did you add value to the deal?

Cleared the trees to expose a nice ocean view.

What was the outcome?

So far, it's a free vacation home. Airbnb revenue covers all expenses, mortgage, etc.

Lessons learned? Challenges?

Building from scratch is expensive, and time consuming. Much more so than I originally envisioned. It's also easy to up-sell yourself during construction if you get emotionally attached to an asset you plan to use and enjoy. We rushed to build in order to start collecting Airbnb revenue, and I wish we had taken it slower, been more thoughtful of the expenses and spoken to more short-term rental experts on what features to add to the property to maximize on revenue.