All Forum Posts by: Shelby Pracht

Wow, lots of great info in this thread, thanks everyone! I use exclusively airbnb right now for our 8 listings at a ski resort, and keep really high occupancy. I've considered adding VRBO, but my biggest concern is adding a whole other platform. I've got airbnb really dialed, understand the system, have automated messaging set up, super host, etc., and starting from scratch on a new platform sounds terrible!

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $147,500
Cash invested: $13,000
Sale price: $269,000

We bought this condo with a Fannie Mae loan to put down 7%. We lived in it while making upgrades and renovating, and then began to rent out a shared space in the living room on Airbnb. We were so shocked with how popular the rental was, we were paying our entire mortgage each month! We saved enough to buy a duplex, moved into one half of it, and began renting the whole condo out nightly on Airbnb.

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

We were young and wanted to stop paying rent, this foreclosure was our ticket out of the rat race.

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

Our amazing agent, Dennis Cox, told us this foreclosure would be coming to the market soon, and that he thought it was perfect for it. The day it finally listed, we had an offer on it within 4 hours.

How did you finance this deal?

A Fannie Mae Homepath loan, which allowed us to put only 7% down

How did you add value to the deal?

Renovating the bathroom and kitchen, and then eventually renting the property nightly

What was the outcome?

We had average gross income of around 3500/mo for a one bedroom condo, and were cash-flowing around $2000/month! As we saw prices rise significantly, we decided to sell and cash out the equity we had earned in the unit, even though we were cash-flowing so well. We were able to cash out more than $130,000 on the sale, TEN TIMES the amount that we had originally put in!!! (and tax free because it had been our primary residence for two years!)

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $147,500
Cash invested: $13,000
Sale price: $269,000

We bought this condo with a Fannie Mae loan to put down 7%. We lived in it while making upgrades and renovating, and then began to rent out a shared space in the living room on Airbnb. We were so shocked with how popular the rental was, we were paying our entire mortgage each month! We saved enough to buy a duplex, moved into one half of it, and began renting the whole condo out nightly on Airbnb. We had average gross income of around 3500/mo for a one bedroom condo, and were cash-flowing around $2000/month! As we saw prices rise significantly, we decided to sell and cash out the equity we had earned in the unit, even though we were cash-flowing so well. We were able to cash out more than $130,000 on the sale, TEN TIMES the amount that we had originally put in!!! (and tax free because it had been our primary residence for two years!) This was our very first deal, and we were so lucky to knock it out of the park. So much of this luck and being in the right place at the right time, but we were so excited to have done so well.

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

We were young and wanted to stop paying rent, this foreclosure was our ticket out of the rat race.

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

Our amazing agent, Dennis Cox, told us this foreclosure would be coming to the market soon, and that he thought it was perfect for it. The day it finally listed, we had an offer on it within 4 hours.

How did you finance this deal?

A Fannie Mae Homepath loan, which allowed us to put only 7% down

How did you add value to the deal?

Renovating the bathroom and kitchen, and then eventually renting the property nightly

@Eric Watkins I second Jeff Parmer's office. We've used him and another attorney in his office before and had smooth, easy transactions both times.

@Eric Wilson and @Kat He, we've been doing the vacation rental thing in the mountains for a couple years now and it's been so great. We've maintained a year round occupancy of right around 80% for 8 properties. (upper 90s during the winter and summer, down into the low 70s during our "shoulder season" of May, October and November). @Joe Garvin I think those lower occupancy numbers would make more sense in an area that's not a resort town. We're in a resort area AND strategically price our units on the lower end to keep them occupied as often as possible. I'd rather have a guest in there at $100/night than have it sit vacant listed at $175.

 Definitely WAY more work than a long term rental, and sometimes the things people do just baffle me, but it's also been significantly more profitable than a long term rental as well. 

Hi @Jason Moraff

Mammoth is definitely a unique market. Home prices have definitely risen over the last two years, but I'm not sure if it's become inflated, or if values have just gone up due to the Alterra purchase, IKON pass, and new development in town. As I mentioned, I sold my own unit here but am managing units for others. I have two owners that bought within the last year and are still cash flowing (although I only charge 25-27% management fee, not 40, which is closer to average). My small studio and one bedroom properties get a much better return than the larger properties (and are so much easier to manage!) Being close to the village OR being pet friendly OR having a view all tend to raise gross income, but not sure if it really raises return as those units all sell for higher prices.

There aren't any meet ups set up right now, but if there are enough people interested I'd be happy to help facilitate.

@Rudy T. yes, I live in Mammoth full time and I manage 9 Airbnb units here. I own a couple of long term rentals here but actually just sold our condo this summer, (cashing out on the higher prices here and buying more property in Alabama) all my short term rentals I’m managing for other people. 

@Andrew Neal yes I do!

@Andrew Neal I have 9 Airbnb units in mammoth lakes right now, which is a pretty comparable market (skiing in the winter, people visiting Yosemite in the summer) 

I have definitely found higher occupancy and higher overall return for smaller properties with lower nightly pricing. Right now, I have a large 3 bedroom property that sleeps 8, and it’s been the biggest pain in my tushie! The price is higher, but the cleaning fee and bed taxes are also so much higher, expenses, supplies, linens, etc. Bottom line, I made more net income on a pet friendly one bedroom unit across the street. ~80- 85% occupancy for the larger property, vs ~90-95% occupancy for the smaller unit. (Which also happened to be about a third of the cost to acquire). Definitely learned our lessons on that one. 

All that being said, maybe the clientele in Tahoe is a bit different, the larger properties might work well there. And if your goal is just to vacation for free, and your family needs a bigger unit, then obviously that would make more sense. 

Welcome @Rudy T. I’ve also got property here in CA, and in the southeast (mine are in Alabama though). We should work on getting a meet up together this winter in Mammoth, @Ali Boone