All Forum Posts by: Peter Aziz

I think the shift in demand is primarily due to (i) locals (within 2-3 hour drive) being more open to travel to further destinations despite the pandemic and (ii) significantly increased STR supply in the market (the number of permits in operations today are apx. 2x what they were early 2020).

I could have added more amenities to make my place more attractive than it already is/was. We had a wrap-around deck with ski-slope views, with the same views to be had from most of the windows throughout the house. Although my cost of capital was cheap (2.5% 30yr fixed), the increased STR supply resulted in a more hands-on approach by me (better marketing, improving the quality of my check-in hose, services, etc) and this wasn't turning out to be as 'passive' as I would have liked (I've been managing my own LTRs for close to a decade, so perhaps I'm spoiled). Also, concerns surrounding potential valuation corrections in this market had me thinking it was probably best to pull my capital and redeploy into a more 'stable' market/LTR.

A few weeks ago I published a post on FaceBook outlining the sale of my cabin in the Moonridge neighborhood of Big Bear Lake, highlighting how I was able to sell above list and also above the Zestimate. In the thread, some folks asked why I had decided to sell and I began to highlight some metrics that I was seeing in the STR market in BBL. I noted the year-over-year increase in STR permits, the decrease in average nightly revenue, and the sentiment that economically-incentivized sellers would flood the market after this winter season (effectively increasing housing supply and decreasing prices). Although I don't personally like the trends, they were supported the City of BBL's October Compliance & Occupancy Data, which provided the following:

1 - The occupancy rate for October was 38%, which compares to 55% prior year; 

2 - Average nightly revenue dropped by 36% on a year-over-year basis; and

3 - Demand decreased by 22% on a year-over-year basis, while SUPPLY ALSO INCREASED by 13%!Every metric a STR owner should be tracking is impacted (significantly).

I still (strongly) believe that supply will pick up in the spring once STR owners are disappointed with 2021 holiday figures, deteriorating property values on the mountain. If you have any questions around how we strategically marketed our cabin to fetch top dollar, please feel free to reach out. We also listed another one of our friends' cabin for sale and are currently in escrow for $707.5K (list price was $689K and Zestimate was $620K!!)

@Kenny Hall Thanks for the response. This is very helpful. Perhaps I can PM you the address and we can take it from there? It also looks like you're a PM, so maybe we can talk and see if we can work together on this one :) This is my first opportunity in Indy, but looking to scale up to a dozen doors by end of 2022... definitely need a team out there :) 

Sorry for the late reply. Haven't been on the forums in a long time (obviously). BRRRRs are very tough to find in CA right now and everything is selling over list price. A more appropriate strategy may be to BARR (buy, appreciate, refinance, repeat) LOL. The good news is that rents are appreciating in line with property values; However, 80% leverage on a NOO will likely not be CF+ out of the gate and will likely require 18-24 months of rental appreciation to generate $ returns. This has always been true of metro areas in CA though.

Hey guys... Long time investor from CA (Los Angeles, all SFRs) that entered into contract on an Indy MF. The property is located off of E. Washington right across the street from Willard Park. The home is comprised of a 1+1 and a 3+1 pulling in about $1.8k/mo in gross rental revenue ($800 for the 1+1 and $1,000 for the 3+1). I have a few questions that I'm hoping the forum members can help me with:

1 - My understanding is that this is a C/D neighborhood - would you agree? Any safety concerns that should be taken into consideration? Is the surrounding area being improved and would one reasonably expect this neighborhood to perhaps upgrade itself into a B/C within the next 24 months?

2 - I've reviewed the lease agreements and it appears that the landlord is paying for all utilities. Is this common in Indy? In CA, I pay for gardening/pool service, but not for utilities. I'm considering perhaps lowering the rent a bit in exchange for the tenants taking on the responsibility for the utilities, but also understand that this may be a no-go in this area. 

3 - The rents appear reasonable to me based on my due diligence ($800 for the 1+1 and $1,000 for the 3+1) - would you agree?

4 - What would you estimate for average monthly power, gas, water, and trash (I know, this is going to be a wide range depending on # of occupants, climate sensitivity factors, etc)?

5 - If/when I have turnover, what's the timeframe to realistically expect to have each unit reoccupied in this area? 

6 - Given the neighborhood 'grade', should I be concerned about vandalism and/or theft if/when I decide to rehab the property?

I appreciate all the help and support. I'll be flying into Indy on the 12th and staying through the 14th and am happy to buy ya'll a round of beer :) 

I agree with @Patricia Steiner. I've always priced my SFR rentals higher than any other listed rental in my market and my phone doesn't stop ringing. Granted, my properties are generally 'nicer' (stainless steel appliances, granite countertops, wood floors, new paint, etc.). I definitely get the passerby's that 'complain' it's too expensive, but I always end up with 2 or 3 applications from hard working, credit worthy, tenants.

The human brain is an interesting organ; We associate price with relative value.

@Austin Ralls, auction.com sells properties through the foreclose process and also sells bank owned REOs. You'll find both being auctioned. Once you 'win' an auction, you'll obtain a Grant Deed. The Grant Deed evidences your ownership.

You'll want to have funds ready as you bid, as you normally need to close/fund within a few days. There is no inspection contingency here (or any other contingency), so you're buying as-is.

All of my tenants pay me via Venmo or PayPal. Works like a charm, although PayPal takes 24 hours to transfer into my bank account.

Cap Rate is your Net Operating Income (gross rent, less vacancy, less operating expenses) divided by purchase price.

Looks like an amazing deal to hold in your portfolio forever! How are you getting 3.75% money though?