All Forum Posts by: Shane Dante

Back to my initial internal wrestling match. I'm interested in properties (land) that has a lot to offer, or properties in proximity to things that I consider an attractant. My idea of an attractive stay might be different than the next guys. I'm trying to tap into my own experience and knowledge. I've never been to Disneyland. I never want to go. I did promise my wife I would go once when our children become old enough to remember and enjoy it. I don't know the first thing about what would make a good STR in the Disneyland area. If someone said there was a magic formula and I could make a bunch of money if I just bought these exact homes, for this price, within this proximity to Disneyland, and decorated exactly like X. I wouldn't do it. I don't believe in it. If I had to visit the property for whatever reason I'd dread every second of it. Same reason I wouldn't buy stock in a company who historically contributes to environmental degradation (won't name any names).

My wheelhouse is outdoor recreation and small agriculture so I figure it's probably best I stick with what I know and try to marry it to my goals of real estate investing. In the real world nobody is actually giving a formula, not only do I not know squat about Disneyland area but I don't care to learn or know.

 I do know where the best steelhead hole is on all the local rivers. I do know the trailheads hunters use to access the wilderness. I know the river rafting put-ins and take-outs. I know the best micro climates to grow the sweetest peaches. 

I'm getting some pretty good advice to ignore those things, go with what's boring. Ignore the feelings. But is that what everyone is really doing? How? If you aren't making purchases you believe in, wouldn't that take some of the enjoyment of being in real estate out? Wouldn't you burn out quicker? 

That's true. This article was more about unique stays - tiny homes, treehouses, RVs, and yellow submarines. I'm not interested in building (or staying in) any yellow submarines. The hosts have developed a following because of the stay.

 It did mention farm stays as being quite popular, which is right up my alley.

 Thank you for this. I enjoy the different perspectives and I like that you are entirely clear. In all reality I think a combination of the two is where I'll end up in the long run. 

I wouldn't say the places I'm looking at are by definition exciting and attract a lot of attention. My focus is not on fancy expensive properties, quite the opposite really. It's hard for me to imagine a lot of appreciation when a property is already 1.2 million dollars. I'd actually say my target is overlooked properties that I can add value and make them more attractive. I like to use examples - I'm eyeing a bank owned property right now that is rural but easy access off a main road, near wineries and tasting rooms, zoning is ideal, along a creek, sub-dividable, flat, and even has some really neat cultural artifacts (that I only know about because of local knowledge). What about the bad? The house is an absolute complete piece of crap, I expect a tear down. There is a huge pile of trash. I could see exactly why it would be an intimidating place to buy. My guess is that it could be had for less than the value of the land because it's really hard to see past the rubble for what the property really offers. Fixing it up would be a huge win for the community, I know of at least one neighboring landowner who has offered to pitch in to help clean it up even. Just one of my ideas, interested in other examples. 

I get what you're saying. Now the reason I put this thread in STRs is because I think it's more feasible to make a return from STRs considering the properties I'm interested in. I don't think you'd be able to make the returns on long-term rentals. I can explain more clearly if that doesn't make sense. Nothing against long-term rentals at all either if the numbers work.

Okay this brings up another point that I didn't express. I don't need it to be completely passive. Sure I'm busy with my job, business, kids, etc. So is everyone else. I will find the time. I want to put sweat equity into properties. I'm going to manage the properties myself. I've never been a landlord, but I have managed properties as trade for rent. I've lived rent "free" my entire life working for rent maintaining and improving other peoples properties. I've always in some capacity had my hands in the building trades. If finding a decent property manager is anything like finding a good sub-contractor then I just assume I'll end up doing it myself anyways. Currently I manage a ranch as my 9-5 job (more like 4:30 am - 3 pm), mostly I'm just building and maintaining infrastructure and automating tasks. Anything from installing irrigation systems to designing and building barns. This is all to say, I like working with my hands.

 That's a good article, surprised I hadn't seen it before. Some of the properties are so unique that the place in and of itself has become the destination is what I gathered. That's a good position to be in as a host. 

That's  exactly the examples I was hoping to hear about. Sounds like just the type of place I'd plan a vacation around myself if I'm ever out in Tennessee. 

Good question. I think of it firstly as a retirement account. The properties will need to cashflow, but in 30-40 years when the mortgages are paid off I'll be retiring and can start to really realize the benefits. I don't see a point where I'll want to quit my job, or stop working in my business and future businesses. I like to work, my wife and I both like the line of work we are in. 

Most importantly I see the value in real property. Always have. It's tangible. Obviously I have other forms of investment already but I'd rather my money sit in real estate. 

I suppose I didn't express this directly or succinctly but yes, I am okay sacrificing some immediate cashflow by not focusing on what appeals to the masses. The reason being - if I don't personally place a lot of value on the real estate, how would I ever be able to justify it. Also interested in the broader discussion of, how to ignore the inevitable emotional part? Or should you in the first place? 

I'm not an experienced real estate investor but I do have some insights on the college bit. 

Firstly, if you don't know what you'd go to college for that tells me you shouldn't force it. 

I went to college, did well, I treated it very transactional. I did get some jobs directly because of my college education and certainly it was a rewarding and valuable experience but I think I would have ended up somewhere about where I am today without it. 

Without knowing what you are interested in, besides real estate, it's hard to make recommendations on specific paths. Obviously you are going to have to make some money and pay the bills while building up your real estate portfolio. 

One last note - not everyone will make a good real estate agent. I'm not one, I don't know even if I would be a good one. I do think it takes a special person to make a great one though. 

Don't overlook trade school. Real estate investors are always looking for decent electricians, plumbers, contractors, landscapers, pool builders, you name it. If you know the trades you will be better able to negotiate, speak the language, and understand costs. 

Some backstory.

I have not made my first real estate investment. Still trying to buy my first home for my family but after that's done I'd like to be aggressive about real estate investing.

 I love numbers but it's hard for me to totally detach from the emotional value to a potential property. Let me be more specific. What one person considers a nice comfortable home is as varied as the amount of people living. In my introduction I mentioned how I really value privacy, space and I don't like cities. Much preferring the rural counterpart. So lets say I run the numbers on a typical box in the city, the numbers are good but to me the home might be virtually uninhabitable because proximity to neighbors, no place for pets, and the perceived and realized dangers of the city. I know other peoples tastes vary but it's difficult wanting to move forward with something I myself don't believe in even if the numbers show a return. In fact, I think it's easier to get the numbers to work in cities, and it is certainly going to be easier to find renters. But if the confidence isn't there, it won't ever work.

I put this is STR section because I think there is more opportunity for STRs in rural, outdoorsy settings.

My current attitude is to not compromise my values. 

I guess the questions/discussion points are as follows:

1) In short-term (or long-term even) rentals do you find you are able to charge more in rent for special properties to cover the added expense. For example, you are going to pay a premium for lake-front or size-able acreage, are you able to pass that along for a sufficient ROI? It's difficult comparing stays with other "similar" properties when talking about unique properties.

2) A lot of focus is placed on a higher cash-flows, and less on banking for long-term appreciation paying off. I feel like by sticking to my values, that it will pay off with appreciation and higher cash flows. I mean it will have to pay for itself and cash flow in my eyes but... let's take a look at Covid even. A lot of people moved out of the core cities for neighboring suburbs and rural communities. The area my wife is from became a mecca for Bay Area transplants and I only see it continuing because it's a great place to be and fortunately/unfortunately I still see plenty of room for growth based on buildable land, zoning, and water.

 I'll use another example, I know of a sleepy mountain lake community - seasonal summer vacation spot and the lake is not influenced by prolonged drought. Relatively affordable by CA standards. Great place to be all things considered. Big things are happening in the community, a large medical facility is getting built and there is talks of a ski hill. Currently there is not a ski resort within an hour and half so that would be huge for making the place not only a summer but winter destination. I feel like understanding local conditions could have potential for real payoff down the road. Interested in hearing others speak about their experiences trying to predict local markets? Is it better to just play it safe?

3) Water... I was raised getting it drilled into my head that water is the most important thing on the planet. My parents bought their property based on the abundant water. Did I mention I'm in California. During my professional career I've worked in various capacities in hydrology, water regulations, and aquatic habitat projects. I place a high value on properties with riparian water, highly productive wells, or appropriated water rights. You do pay a premium for these things though. If you have enough water you can do just about anything, you can't do a development unless water is secured, can't grow anything without water. I'd love to hear from folks who are making investments into water, whether that's for agriculture, recreations, or development. I'm very interested in combining uses to open up more cash flow, like house hacking but for an entire property. One idea (of a million) is leasing for agriculture while maintaining a functional Airbnb. Or buying an ecologically important property, finding someone that will pay for a conservation easement and renting long-term. I'm certain examples exist, it's just not discussed as much. 

Not trying to reinvent the wheel at all, I'm trying to make real estate investing work with my personal values.