Well alrighty then @Jayme B.! Sounds like you are farther along in the process. Every STR is a risk, but you mitigate it with the data.
Have you looked into builders to get an idea of cost?
I would see about cleaners before I did anything. An hour is about the outer limit. We are an hour down lake from Coeur d'Alene and a lot of the cleaners I contacted didn't want to do the drive.
I have Grunsfos recirc pumps on our boiler. I replaced an ancient Grundfos sewage pump a few year ago in our lift tank. I would just be concerned about building out a solar system to run it all. For the mini split, would you have a propane tank?
He doesn't want a mortgage. He wants something less than $100k total. He's not serious about getting a STR.
You need to take a step back @Jayme B., because I hear you asking the wrong questions, and with the wrong focus.
First you need to decide if your going to INVEST that capital, or Launch a Business with it. And yes, these are 2 very different directions.
STR is a BUSINESS. Yes, it has a component of Real Estate, but it is NOT Real Estate Investing, it is HOSPITALITY business. The "STR Trail" is strewn with graves marked "I thought it would be easy" and "but the books said". NOT everyone can do it CORRECTLY, well, proficiently, profitably. Problem is many get confused for fact any can do it, with any can do it PROFITABLY, which no, MOST don't. Just look-up AirBnB, look at all the janky places, charging near to nothing, with few to little bookings, and then that "one" jumps out that's booked solid. Now think, that's ONLY those failing now, today, that's not the grave-yard of those who already failed.
STR is a HOSPITALITY Business, and coming into it with anything less than a focus on building a Hospitality business is planning to fail.
And that whole needing a 4-sure homerun hit out the gate, STOP, that does not exist in a startup business of any kind more or less a hospitality business which is one of the single most competitive in existence.
You want assurances, INVEST via a Pro. Yeah, it means lower returns, but that comes with safety. You don't know, so put your $ with someone who DOES. It's just that simple. And than learn from the experience until you grow your knowledge base to be empowered to do something on your own. Book smart is still only book smart and trust me, once in the trenches, with your $ on the line, yeah things are a whole lot different.
This $3k mnthly cash-flow off $100k, not realistic. Not to start, with low risk etc.. Reward and Risk are a married couple, you don't get more of one without more of the other.
I need the little money I have to work for me short term AND long term, not just long term. I can invest in the stock market and make 7-11% with no effort over the course of 20 years but it does very little to leverage the money I have in the near-term. I want to launch a business. I understand the difference in holding properties in a portfolio vs running a hospitality business.
Positioning yourself with the correct information and research does at times allow someone to have a better outcome the first time than those that do not put in the work to figure it out. I'm just not going to throw down $100k on a property and cross my fingers. Maybe 3k cash flow is unrealistic. That's why I'm on here asking those that have experience. I'm humble enough to learn from those that have done it before. Most don't want to share their knowledge or hand hold.
If you need the money to work for you in both the short-term and long-term, you want to probably sit on T-Bills for a while until you find a really basic property to LTR on. You're not going to get 7-11% on equities again. The last 15-year run showed about 8.5%, and the 10 year run showed 11-ish %. That's in the lowest interest environment ever. Fed funds isn't going to sit at 0 or near 0 for a decade again, bake in 1.5-3% fed funds, you're looking at probably 5-8% returns with equities in the next decade. Still solid, but the physical resources of land diminishing + population growing likely will yield better but significantly more work and risk.
You're wanting to hit a grand slam on your first at base. I hope it happens, but you're better off playing it safer if you're family life is going to get more occupied. I know you want to quit your job and do this, but that reality is a farce. People could do that 10 years ago when anything you bought cash flowed, right now even buying an intrinsic property is almost impossible. All these dreams that come on here that post how they want "financial freedom', good luck that **** is ********. You're going to enter financial prison and in a nightmare if you do it like people did 10 years ago all levered up. I'd buy T-Bills and suppressed ETFs, after paying off any dumb debt. Keep your job, you're going to need it. Life isn't coming in cheaper.
I don't know where you guys are getting that I want to hit a grand slam. I said I wanted to have a property that was the right fit for this type of business. Again, I also never said that I expected to replace my income on the first swing at this. I also never said I was quitting my job in the near future. I guess I should have written a novel with every single point listed out.
$3k cash flow a month is a grand slam. At least $3,000 a month is your words.
You also say you need to be right the first time which was preceded by saying you needed to be doing something different to replace your income.
I mean, what did you expect us to think when you told us that?
I wanted to know if $100k could yield $3k per month or creative ways to get to that point. I'm not wanting to take out a loan on a 500k house. I gave a scenario as to how I think it could work. I do need to be right the first time. Right doesn't mean knocking it out of the park, it simply means not losing money forever. I do want to replace my income, but I'm not that naive to think I could replace my income on the first deal I ever do.
You’re not wanting to take out a loan on a property? I’m confused how you plan to get involved in a short term rental. Genuinely asking for clarity.
I may ask the seller to owner finance on a small note, it really depends on what I can find out in regards to building costs. I could be GC myself or build it myself and save money. If I can buy the property with no finance and do a small build within my budget then great. I'd rather finance the land than finance the build. Keeps the bank's red tape out of it.
I see. So I highly recommend not going through the hassle of building. There are “turnkey” properties that are already short term rentals, and they come fully furnished, ready to rent. That’s my suggestion for what you need. Just close on the property and start renting it right away. Plus with a $500k+ property your cash flow may be more like $1-2k out the gate, but you’ll have ~3% of appreciation every year AND principle paydown. This will really up your return on investment.
I prefer not to have the stress of covering another mortgage when it's not necessary. Just my opinion.
Well if that’s the case you should probably be looking into tiny homes or something.
You need to take a step back @Jayme B., because I hear you asking the wrong questions, and with the wrong focus.
First you need to decide if your going to INVEST that capital, or Launch a Business with it. And yes, these are 2 very different directions.
STR is a BUSINESS. Yes, it has a component of Real Estate, but it is NOT Real Estate Investing, it is HOSPITALITY business. The "STR Trail" is strewn with graves marked "I thought it would be easy" and "but the books said". NOT everyone can do it CORRECTLY, well, proficiently, profitably. Problem is many get confused for fact any can do it, with any can do it PROFITABLY, which no, MOST don't. Just look-up AirBnB, look at all the janky places, charging near to nothing, with few to little bookings, and then that "one" jumps out that's booked solid. Now think, that's ONLY those failing now, today, that's not the grave-yard of those who already failed.
STR is a HOSPITALITY Business, and coming into it with anything less than a focus on building a Hospitality business is planning to fail.
And that whole needing a 4-sure homerun hit out the gate, STOP, that does not exist in a startup business of any kind more or less a hospitality business which is one of the single most competitive in existence.
You want assurances, INVEST via a Pro. Yeah, it means lower returns, but that comes with safety. You don't know, so put your $ with someone who DOES. It's just that simple. And than learn from the experience until you grow your knowledge base to be empowered to do something on your own. Book smart is still only book smart and trust me, once in the trenches, with your $ on the line, yeah things are a whole lot different.
This $3k mnthly cash-flow off $100k, not realistic. Not to start, with low risk etc.. Reward and Risk are a married couple, you don't get more of one without more of the other.
I need the little money I have to work for me short term AND long term, not just long term. I can invest in the stock market and make 7-11% with no effort over the course of 20 years but it does very little to leverage the money I have in the near-term. I want to launch a business. I understand the difference in holding properties in a portfolio vs running a hospitality business.
Positioning yourself with the correct information and research does at times allow someone to have a better outcome the first time than those that do not put in the work to figure it out. I'm just not going to throw down $100k on a property and cross my fingers. Maybe 3k cash flow is unrealistic. That's why I'm on here asking those that have experience. I'm humble enough to learn from those that have done it before. Most don't want to share their knowledge or hand hold.
If you need the money to work for you in both the short-term and long-term, you want to probably sit on T-Bills for a while until you find a really basic property to LTR on. You're not going to get 7-11% on equities again. The last 15-year run showed about 8.5%, and the 10 year run showed 11-ish %. That's in the lowest interest environment ever. Fed funds isn't going to sit at 0 or near 0 for a decade again, bake in 1.5-3% fed funds, you're looking at probably 5-8% returns with equities in the next decade. Still solid, but the physical resources of land diminishing + population growing likely will yield better but significantly more work and risk.
You're wanting to hit a grand slam on your first at base. I hope it happens, but you're better off playing it safer if you're family life is going to get more occupied. I know you want to quit your job and do this, but that reality is a farce. People could do that 10 years ago when anything you bought cash flowed, right now even buying an intrinsic property is almost impossible. All these dreams that come on here that post how they want "financial freedom', good luck that **** is ********. You're going to enter financial prison and in a nightmare if you do it like people did 10 years ago all levered up. I'd buy T-Bills and suppressed ETFs, after paying off any dumb debt. Keep your job, you're going to need it. Life isn't coming in cheaper.
I don't know where you guys are getting that I want to hit a grand slam. I said I wanted to have a property that was the right fit for this type of business. Again, I also never said that I expected to replace my income on the first swing at this. I also never said I was quitting my job in the near future. I guess I should have written a novel with every single point listed out.
$3k cash flow a month is a grand slam. At least $3,000 a month is your words.
You also say you need to be right the first time which was preceded by saying you needed to be doing something different to replace your income.
I mean, what did you expect us to think when you told us that?
I wanted to know if $100k could yield $3k per month or creative ways to get to that point. I'm not wanting to take out a loan on a 500k house. I gave a scenario as to how I think it could work. I do need to be right the first time. Right doesn't mean knocking it out of the park, it simply means not losing money forever. I do want to replace my income, but I'm not that naive to think I could replace my income on the first deal I ever do.
You’re not wanting to take out a loan on a property? I’m confused how you plan to get involved in a short term rental. Genuinely asking for clarity.
I may ask the seller to owner finance on a small note, it really depends on what I can find out in regards to building costs. I could be GC myself or build it myself and save money. If I can buy the property with no finance and do a small build within my budget then great. I'd rather finance the land than finance the build. Keeps the bank's red tape out of it.
I see. So I highly recommend not going through the hassle of building. There are “turnkey” properties that are already short term rentals, and they come fully furnished, ready to rent. That’s my suggestion for what you need. Just close on the property and start renting it right away. Plus with a $500k+ property your cash flow may be more like $1-2k out the gate, but you’ll have ~3% of appreciation every year AND principle paydown. This will really up your return on investment.
You need to take a step back @Jayme B., because I hear you asking the wrong questions, and with the wrong focus.
First you need to decide if your going to INVEST that capital, or Launch a Business with it. And yes, these are 2 very different directions.
STR is a BUSINESS. Yes, it has a component of Real Estate, but it is NOT Real Estate Investing, it is HOSPITALITY business. The "STR Trail" is strewn with graves marked "I thought it would be easy" and "but the books said". NOT everyone can do it CORRECTLY, well, proficiently, profitably. Problem is many get confused for fact any can do it, with any can do it PROFITABLY, which no, MOST don't. Just look-up AirBnB, look at all the janky places, charging near to nothing, with few to little bookings, and then that "one" jumps out that's booked solid. Now think, that's ONLY those failing now, today, that's not the grave-yard of those who already failed.
STR is a HOSPITALITY Business, and coming into it with anything less than a focus on building a Hospitality business is planning to fail.
And that whole needing a 4-sure homerun hit out the gate, STOP, that does not exist in a startup business of any kind more or less a hospitality business which is one of the single most competitive in existence.
You want assurances, INVEST via a Pro. Yeah, it means lower returns, but that comes with safety. You don't know, so put your $ with someone who DOES. It's just that simple. And than learn from the experience until you grow your knowledge base to be empowered to do something on your own. Book smart is still only book smart and trust me, once in the trenches, with your $ on the line, yeah things are a whole lot different.
This $3k mnthly cash-flow off $100k, not realistic. Not to start, with low risk etc.. Reward and Risk are a married couple, you don't get more of one without more of the other.
I need the little money I have to work for me short term AND long term, not just long term. I can invest in the stock market and make 7-11% with no effort over the course of 20 years but it does very little to leverage the money I have in the near-term. I want to launch a business. I understand the difference in holding properties in a portfolio vs running a hospitality business.
Positioning yourself with the correct information and research does at times allow someone to have a better outcome the first time than those that do not put in the work to figure it out. I'm just not going to throw down $100k on a property and cross my fingers. Maybe 3k cash flow is unrealistic. That's why I'm on here asking those that have experience. I'm humble enough to learn from those that have done it before. Most don't want to share their knowledge or hand hold.
If you need the money to work for you in both the short-term and long-term, you want to probably sit on T-Bills for a while until you find a really basic property to LTR on. You're not going to get 7-11% on equities again. The last 15-year run showed about 8.5%, and the 10 year run showed 11-ish %. That's in the lowest interest environment ever. Fed funds isn't going to sit at 0 or near 0 for a decade again, bake in 1.5-3% fed funds, you're looking at probably 5-8% returns with equities in the next decade. Still solid, but the physical resources of land diminishing + population growing likely will yield better but significantly more work and risk.
You're wanting to hit a grand slam on your first at base. I hope it happens, but you're better off playing it safer if you're family life is going to get more occupied. I know you want to quit your job and do this, but that reality is a farce. People could do that 10 years ago when anything you bought cash flowed, right now even buying an intrinsic property is almost impossible. All these dreams that come on here that post how they want "financial freedom', good luck that **** is ********. You're going to enter financial prison and in a nightmare if you do it like people did 10 years ago all levered up. I'd buy T-Bills and suppressed ETFs, after paying off any dumb debt. Keep your job, you're going to need it. Life isn't coming in cheaper.
I don't know where you guys are getting that I want to hit a grand slam. I said I wanted to have a property that was the right fit for this type of business. Again, I also never said that I expected to replace my income on the first swing at this. I also never said I was quitting my job in the near future. I guess I should have written a novel with every single point listed out.
$3k cash flow a month is a grand slam. At least $3,000 a month is your words.
You also say you need to be right the first time which was preceded by saying you needed to be doing something different to replace your income.
I mean, what did you expect us to think when you told us that?
I wanted to know if $100k could yield $3k per month or creative ways to get to that point. I'm not wanting to take out a loan on a 500k house. I gave a scenario as to how I think it could work. I do need to be right the first time. Right doesn't mean knocking it out of the park, it simply means not losing money forever. I do want to replace my income, but I'm not that naive to think I could replace my income on the first deal I ever do.
You’re not wanting to take out a loan on a property? I’m confused how you plan to get involved in a short term rental. Genuinely asking for clarity.
I disagree with this statement. People in this community are very willing to share their knowledge and help. You’ve already had a ton of comments on this post alone with people sharing their knowledge and giving great insights.
Yes that is enough if you're able to qualify for a 2nd home loan @10% down, otherwise you'll have to find an STR DSCR. Those are probably the easy tasks compared to finding an STR that profits 3k monthly, that'll be the real challenge. I know we see the "gurus" on social media doing it.
Yeah and most of these so called “gurus” bought a couple years ago then rave about how easy this business is when it isn’t nearly as easy to find those deals in this market. Or they buy in this market and then add value with a rehab but that’s combining multiple strategies. I agree finding the deal will be the real challenge.
Yes you can do it, with $100k you can get 4 SFR in the right town, I have some available for sale in Cleveland right now, one is going for $80k and rents out up to $1250 a month, get a mortgage on that it will cost you $20k (down payment) and about $500 a month mortgage so you can make a good $500 a month income, then do that 5 more times, thats what I did.
You just need to factor in cost of repairs, let me know if you want me to send you my current properties available, I have a nice cashflowing duplex in Cleveland too, cost $127k, cashflows $1800 a month, great tenants
He said he wants to cash flow $3k per month. Don’t think that’s in the ball park of what he’s looking for.
Is even $80k-$100k enough to get started in this financial climate? Thanks for the help!
Not impossible to reach this goal, but with $100k planning to cash flow $3k per month (a 3% return on your investment per month), and purchase prices/interest rates as high as they are, you're going to have to check all the boxes to reach that goal. Means doing a ton of research on STR's and tons of very specific market research to find a place you plan to target. Again, not impossible, but to me that sounds like a stretch goal to be achieved. What kind of financing are you looking at? Your absolute best bet is probably if you can finance this as a second home loan.
I closed on a cabin in BB last year and am about to close on my 2nd. I also manage for other owners in the area.
I actually ran into this exact issue when I closed on my first cabin. The appraiser marked the property as rural and the lender didn’t want to fund it. Fortunately, we got the appraiser to claim this was a mistake and mark it as suburban. For this next cabin I’m closing on I’ll have the appraisal back within the next couple of weeks, curious to see how they do this one.
When we were working with the brokerage on getting a DSCR lender in the area there were some we just could not convince the area is suburban so they wouldn't even give us a preapproval. Bottom line I think it depends on the appraiser that does the report, and it may take some communication from you with that person to ensure closing goes smoothly.
I use The One Brokerage. They’ve been able to get me closed on properties in Broken Bow.
I closed on a cabin in BB last year and am about to close on my 2nd. I also manage for other owners in the area.
I actually ran into this exact issue when I closed on my first cabin. The appraiser marked the property as rural and the lender didn’t want to fund it. Fortunately, we got the appraiser to claim this was a mistake and mark it as suburban. For this next cabin I’m closing on I’ll have the appraisal back within the next couple of weeks, curious to see how they do this one.
When we were working with the brokerage on getting a DSCR lender in the area there were some we just could not convince the area is suburban so they wouldn't even give us a preapproval. Bottom line I think it depends on the appraiser that does the report, and it may take some communication from you with that person to ensure closing goes smoothly.