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Get ready for a heart-to-heart about our unexpected goodbye to our first rental property. Uncover the drivers that led us to this pivotal moment, from sentimental ties to practical factors. We’ll divulge the details of our decision to sell, taking you on a rollercoaster ride of discovery.
This conversation is bound to strike a chord and might even inspire you to re-evaluate your own property.
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This editable transcript was computer generated and might contain errors.
Tony Stancato: Welcome to the Michigan. Short-term rentals podcast, my name’s Tony Stancato here with my co-host. Jordan painter. What’s up man?
Jordan Painter: Man, the sun is shining. The snow is melting, March and Michigan.
Tony Stancato: Boo, man. It was cold this weekend though.
Jordan Painter: It was cold. Yeah, man. He had a slow I woke up. I forget one day, it was Saturday or Sunday and I hear the snow plow in my driveway. I’m my first thought was what in the heck is going on? And then I realized, Oh crap. It’s still snowing in March. So not…
Tony Stancato: Yeah. Well.
Jordan Painter: what I wanted to be woken up. I want to hear birds you come.
Tony Stancato: Good. Good day to be done with 75 hard. Did you do your 45 outside that day?
Jordan Painter: You know, I I did, I did not. No, I didn’t actually I’m gonna keep going, but I’m I did, I did do workouts both days but instead of doing the outside stuff, I’m focusing more on some of the cardio, get back in the pool. So still gonna keep it going. Definitely gonna be spending some time outside and keep the road work going on. I actually just did the math. I did just over 200 miles, they’re in the the process. So not being an endurance athlete, I’m pretty happy with that. Somebody who actually runs probably thinks that’s a joke but for me that’s that’s good. It’s gonna get
Tony Stancato: Hey, that’s pretty good man. Good job. Awesome. So…
Jordan Painter: Thanks man.
Tony Stancato: what today we’re gonna talk about We decided to sell our first short-term rental and then we just wanted to get kind of give you guys the thought process on Why we decided to do that and it was a really good property. And again just kind of wanted to give you the breakdown of you know what prompted us to go ahead and get that thing listed. So I think it all started with essentially We’ve got really big projects in the hopper right? We have a five unit that we converted into a four unit that is essentially taking a lot of cash and capital to get up and running basically a complete rehab across the board.
Tony Stancato: And then we bought another five unit that also needs need some work. Not a lot of work. Yeah, kind of, I guess it’s all relative, right? A fair amount of work, but then also, you know, a lot of furnishing furnishing five different units, really expensive. So, When we looked at this potential property, what was kind of the lens that which we decided, I think it was my idea initially. Or maybe there was, we had another property on the table that we were maybe looking at sale selling, but this one kind of came up as kind of maybe a better opportunity to sell, right?
Jordan Painter: Yeah, so what it really a couple of things that it came down to. The other property we have is is been a little bit less work. It’s a smaller property. It’s not a huge revenue generator but compared to what we have into it, it’s pretty good and it’s not generating quite enough revenue to justify the sale price based on the revenue so that one…
Tony Stancato: If?
Jordan Painter: if we sold it would have probably been more more than likely based on just you know, residential real estate comparable sales rather than the income production. So for us right now the main reason to sail was to put some money back into the business And to also take some things off the plate is just as far as our workload goes, so that one was a little bit. Harder to justify selling. So what really came down to was I think a the property that we’re selling will be closing here and very soon. Actually by the time this podcast comes out we’ll have closed it. So it really came down to we we looked at the projections that one this last year. I believe we were at. What was that Tony’s? 116,000 in gross rent.
Tony Stancato: Well, just under 15.
Jordan Painter: Yeah, so let’s call it 115. So Great revenue producer you know, we paid 384 it and then put probably another, I don’t know what 30 to 40 in it initially to furnish it and fix it up. So that property really has been a great income producer, but it’s just been a lot of maintenance. It’s an older property that had an addition on it. So we start really projecting over the next five years what really would need to get done to make it tip top and and so yeah why don’t you start rattling off all the things that needed Tony
Tony Stancato: Yeah so when we started adding it up it’s like Hey we would need to essentially get new flooring. I mean the fluorines super outdated and they kind of have it. Every like there’s two living areas in the bedrooms on the main flourish and then you also have the kitchen and like every room is a different floor, right? And they’re super outdated and You know, getting scuffed up so it’s about time that those need to get replaced and it’s a bigger house. So
00:05:00
Tony Stancato: Projected probably 10 to 15 grand. I would say somewhere in between there, probably more like 12 five, right? The kitchen, definitely outdated. We knew it was outdated when we bought it. The cabinets. Probably have pretty close to the ugliest paint ever. So, it’s just a matter of time before those need to get redone too. So there’s some additional paint that’s needed as well. So I would say at least five grand in pain. and then, you know, another big thing for us too was like
Tony Stancato: Our hot tub is right next to the neighbors and we had the neighbors. They weren’t a big fan of the property necessarily. So in order to be in their good graces, we would need to reposition the hot tub and move that to the other side of the property which would probably cost another I don’t know, three to four, three to four grand. Probably maybe
Jordan Painter: Yeah, that’s up that I’d say, probably more like five to seven. Electrical and…
Tony Stancato: Yeah. Yeah. And I mean the garage needed some work.
Jordan Painter: pouring a pad and labor.
Tony Stancato: So in the garage we would probably need least another five to ten thousand the furnace. You know, as we went through the inspections with the current buyer, the the furnace is what? 23 years old, something like that.
Jordan Painter: References of Property.
Tony Stancato: So Bernice
Jordan Painter: Yeah, so the secondary furnace was very old.
Tony Stancato: Furnace and ac. So another I think it was 10 grand or something on there and there’s just a lot of other quirky things. So just in those few things that we talked about, we’re already at call it 30 to 40 grand and we thought you know with some landscaping and some other stuff that needs to be done, we thought we’d probably be close to 60 to 80 grand. That means to be put back into the property over the next couple years. I mean, I think the decks either they definitely need repainted or like restained or need completely redone, right? And needed some gutters, and that kind of stuff. So, Again, I mean, so when we were looking at it, I was like, Oh man, 115 It did 115. Is that the best? We really think it’ll ever be able to do? Do we think we’ll be able to get it higher than 115? And the answer really was No, I think that’s the best. We’ll, we’ll be able to do going forward. So we thought
Tony Stancato: Well, it might be one ten next year or it might be 1:15 again, but if we think that’s kind of the peak of what it’ll do there, might not be a better time to sell then right now. And if we decide to keep it, then essentially we would forgo. Profit for the next two years based on reinvesting that money into the property, although it’s still probably be a good reinvestment. But again, with the neighbors being not overly excited about the property as well, there’s a little bit of a risk there. And I think on the other end of it, too. I mean, we disclose all this stuff, right? I mean, you mentioned it, you mentioned the neighbors to the agent in in all that. So the people that are buying are well aware of the work that’s needed. And that the neighbors aren’t, you know, Overly excited about the property.
Jordan Painter: Yeah. Yep. So we were, we went out of our way. I went out of my way when agents called Because it’s kind of, you know, when when people are looking at it from investments, like this did 115,000, why the heck are you selling it like? Well, here’s all the reasons and here’s the the pros and cons with it. It’s a, it really is an amazing property. I mean, you get there, we’ve only stayed there a couple times just because it’s always booked out when we would want to go. But It just has this feeling like around vacation in the woods. It really is a unique, stay a lot of lot of pros to it. And so, you know, they’re there.
Jordan Painter: Was a lot of questions, pretty much everyone who was interested. Like, why the heck you guys selling this? If it’s doing this? Well, so, yeah, we disclosed all the, the different things that would need to be done in again for us, you know, we’re trying to go big. We’re trying to scale quickly. You know, it’s really important to us to generate cash flow in profits so that we can continue to reinvest and scale, and grow, and do this again. And this one would have been almost like a standstill like Tony said for the next two or three years, it would have been kind of, not really getting us in. Moving the needle where we want it. And we’ve got two other fairly large projects for us. At least that are multi-units gonna cost a lot to furnish one of the projects we have.
00:10:00
Jordan Painter: Kind of dragging out, didn’t have the, the best experience with the contractor. So we’re gonna have to put probably a little bit more than we expected in that one certainly with time and energy. And so getting rid of the distraction and staying focused, I think it was, it was hard one to let go of, but I think in the, in the end it’s gonna be a, a pretty good pretty good run. So,
Tony Stancato: Yeah, and I mean, again it comes down to that risk of Of keeping it right with the neighbors that are there and Let’s say, for some reason, they didn’t allow this property to they shut us down, right? And we couldn’t continue to generate revenue on that. If the next buyer was to see that like Oh yeah it actually I don’t know what can’t do short-term rentals or something along those lines. I mean it’s just not going to get the amount that we got for the sale of it as a single family home. It is a good short-term rental, it is not a great single family home if if that makes sense. Right. I mean the bathrooms are
Tony Stancato: like there’s imagine three bedrooms all the way on one side of the house. And then, if you have to go to the bathroom in the middle night, you have to walk all the way over to the other side of the house. And I mean, it’s a, it’s a ways to go and you got to go up a couple different, you know, levels. A couple steps here multiple times to actually get to those bathrooms. So it’s just not a great layout. There’s no primary bathroom, converted, the garage in the bedroom. So, I mean, just as a single family home we would never get what we got. As a short-term rental, right?
Jordan Painter: Yeah, for sure. Based on the rental revenue, the value is much more substantial but substantial, then then single family. You know, just regular dwelling the garage, it’s got a great big garage. They they converted the old garage into living space and then added a new one but it’s kind of sets back from the house not attached. So a lot of the things that you know this is this is close to a half million dollar house. A lot of the things that a buyer in that price range would just expect in this market it just doesn’t have. So again like a lot of the finishes
Jordan Painter: I thought We’re gonna be an issue with people paying 15 to 1800 dollars a night in the peak season, the cabinets, like Tony mentioned, the cabinets in the kitchen. Had been painted by the homeowner previously and they looked terrible. The flooring in most of the house was the cheap laminate from probably 15 or 20 years ago. A lot of those things that I thought were going to be huge issue. The guests didn’t care about, they really didn’t. As long as it was clean, it wasn’t an issue. But somebody who’s living there for a half million dollars in that market would would not expect to see you know,…
Tony Stancato: If?
Jordan Painter: Three generations removed of laminate flooring, it’s not nearly nearly the quality in the style that you see, now getting getting installed in houses. So, Cool.
Tony Stancato: As a single as a single family home, what do you think it would get? Let’s say, Short-term rentals that aren’t even allowed in this area, let’s just pretend that. What what do you think that house would go for it?
Jordan Painter: Yeah, you know, I think I think it would probably have capped out in the condition. It was in probably 60 to 80,000 dollars less than we sold it for most likely in the condition. It’s in today. If we put some of that money into it, I think we, we probably could have gotten closer to what we actually have sold it for, but I’d say, minimum 60 to 80 thousand dollars less than what we sold it. For all of the interested parties that were really interested in it. Every single one of them wasn’t investor. We had we had we did have some, some potential owner occupant type of buyers, looking at it but none of them had any interest. The feedback I received from the agents who showed those houses was what I would expect from a buyer just looking at market value based on comparable sales.
Tony Stancato: If?
Jordan Painter: It’s too much work,…
Tony Stancato: You.
Jordan Painter: there’s too many negatives. There’s all these things. It doesn’t have that the clients wanted. And so yeah, for sure the interested parties were all looking at the price tag, the reviews and the uniqueness of the property.
Tony Stancato: Yeah, so we sold for 475 with 12,000 right around 12,000 in seller, concessions and if it was to just be a single family home residential property, you think it’d probably be more around the 400,000? Yeah.
Jordan Painter: Four to four twenty I think probably more realistically. Yeah.
Tony Stancato: Yeah. And I mean, I know we’re we talk a lot about buy and hold and, you know, ideally that is what you do, right? But I’ve had some great discussions with other people that are buying short term rentals and one of their Big drivers of returns is the cell. You know, get the revenue, get it up as high as you can optimize it show investors what it can do.
00:15:00
Jordan Painter: It. Yes,…
Tony Stancato: And then sell it, and that’s where they get. That’s where they actually are factoring in a big part of their return. So we’ll make sure we kind of put together a One-sheeter and see what our return was on this property and sure we’ll share that with you guys. So,
Jordan Painter: hard as it is to let go of assets. I mean, there is something to be said for you just look at the full rate of return that you get. And if you can take away, it is, it is a lot of work to get these properties set up. If you can take away that friction for people in in the doubt of the unknown and it’s all up and running, it’s all furnished. There’s a lot of value there. So, you know, I think Yeah.
Tony Stancato: Five star reviews. I mean like Yeah if you were to walk in it again you walk through it first time and you see those cabinets and you’re like Oh dude, if we want to get guest experience we better get. But it’s like people walk in. They see, you know, an investor walks and they look at the previous reviews. Oh this review just came in, you know, three days ago and it’s got five star in. I mean, I think in general it’s a 4.98 I think we’ve got Two four star reviews since like in 18 months, you know. And one we knew was gonna be Four Star before she even showed up at the property. So it is what it is. But
Jordan Painter: Never going to make everybody happy, but Tony does his best to please most of the masses for sure.
Jordan Painter: So yeah, so again, I think it was it’s gonna turn out. Hopefully be a good decision and it’ll give us a little bit of extra cash, that is going to be needed in order to give the properties. We’re working on a little bit of extra pop, you know. It’s a really go all in on the amenity stack and not have to cut corners on some of the stuff that we’re doing. We really want to make sure that especially moving forward, that we’re doing as much of this stuff on the front end and not, you know, for this one it was our first one. We were still trying to work on cash flow and building up funds and trying to keep our out of pocket lower. So, you know, I think in the future we’re really trying to get these properties buttoned up even at a higher level, like the cabinets and some of those things, we mentioned needed to be done. We could have done those out of the gate. Turns out, it didn’t make a huge impact overall, but it’s, it’s a lot easier to have all that stuff done up front and I have to keep going back and fixing stuff later so that this sale is, is gonna allow us to do that on a couple of other projects to make sure that I think,
Jordan Painter: Our big thing this year is we’ve talked more about. It is like we we’ve got to optimize everything that we have. And so optimizing the one that we’re selling would have taken away from our optimization of the ones that we actually think have bigger potential for returns. So definitely excited to see where that goes and hoping for the best on these these projects.
Tony Stancato: Yeah, so I would say the big key takeaway to is just don’t be afraid to take chips off the table, right? If you had a banner year last year, and you’ve thought about potentially selling like, Now is probably a good time, you know? Again, it took us what a week to get, get it under contracts. I think we only had like eight buyer or eight walkthroughs, eight. Showings. And three offers primarily all from investors. So, yeah, if you had a banner year and thought about buying something else, it could be a good time.
Jordan Painter: Yeah, no doubt.
Tony Stancato: all right, until next time,
Tony Stancato: Welcome to the Michigan. Short-term rentals podcast, my name’s Tony Stancato here with my co-host. Jordan painter. What’s up man?
Jordan Painter: Man, the sun is shining. The snow is melting, March and Michigan.
Tony Stancato: Boo, man. It was cold this weekend though.
Jordan Painter: It was cold. Yeah, man. He had a slow I woke up. I forget one day, it was Saturday or Sunday and I hear the snow plow in my driveway. I’m my first thought was what in the heck is going on? And then I realized, Oh crap. It’s still snowing in March. So not…
Tony Stancato: Yeah. Well.
Jordan Painter: what I wanted to be woken up. I want to hear birds you come.
Tony Stancato: Good. Good day to be done with 75 hard. Did you do your 45 outside that day?
Jordan Painter: You know, I I did, I did not. No, I didn’t actually I’m gonna keep going, but I’m I did, I did do workouts both days but instead of doing the outside stuff, I’m focusing more on some of the cardio, get back in the pool. So still gonna keep it going. Definitely gonna be spending some time outside and keep the road work going on. I actually just did the math. I did just over 200 miles, they’re in the the process. So not being an endurance athlete, I’m pretty happy with that. Somebody who actually runs probably thinks that’s a joke but for me that’s that’s good. It’s gonna get
Tony Stancato: Hey, that’s pretty good man. Good job. Awesome. So…
Jordan Painter: Thanks man.
Tony Stancato: what today we’re gonna talk about We decided to sell our first short-term rental and then we just wanted to get kind of give you guys the thought process on Why we decided to do that and it was a really good property. And again just kind of wanted to give you the breakdown of you know what prompted us to go ahead and get that thing listed. So I think it all started with essentially We’ve got really big projects in the hopper right? We have a five unit that we converted into a four unit that is essentially taking a lot of cash and capital to get up and running basically a complete rehab across the board.
Tony Stancato: And then we bought another five unit that also needs need some work. Not a lot of work. Yeah, kind of, I guess it’s all relative, right? A fair amount of work, but then also, you know, a lot of furnishing furnishing five different units, really expensive. So, When we looked at this potential property, what was kind of the lens that which we decided, I think it was my idea initially. Or maybe there was, we had another property on the table that we were maybe looking at sale selling, but this one kind of came up as kind of maybe a better opportunity to sell, right?
Jordan Painter: Yeah, so what it really a couple of things that it came down to. The other property we have is is been a little bit less work. It’s a smaller property. It’s not a huge revenue generator but compared to what we have into it, it’s pretty good and it’s not generating quite enough revenue to justify the sale price based on the revenue so that one…
Tony Stancato: If?
Jordan Painter: if we sold it would have probably been more more than likely based on just you know, residential real estate comparable sales rather than the income production. So for us right now the main reason to sail was to put some money back into the business And to also take some things off the plate is just as far as our workload goes, so that one was a little bit. Harder to justify selling. So what really came down to was I think a the property that we’re selling will be closing here and very soon. Actually by the time this podcast comes out we’ll have closed it. So it really came down to we we looked at the projections that one this last year. I believe we were at. What was that Tony’s? 116,000 in gross rent.
Tony Stancato: Well, just under 15.
Jordan Painter: Yeah, so let’s call it 115. So Great revenue producer you know, we paid 384 it and then put probably another, I don’t know what 30 to 40 in it initially to furnish it and fix it up. So that property really has been a great income producer, but it’s just been a lot of maintenance. It’s an older property that had an addition on it. So we start really projecting over the next five years what really would need to get done to make it tip top and and so yeah why don’t you start rattling off all the things that needed Tony
Tony Stancato: Yeah so when we started adding it up it’s like Hey we would need to essentially get new flooring. I mean the fluorines super outdated and they kind of have it. Every like there’s two living areas in the bedrooms on the main flourish and then you also have the kitchen and like every room is a different floor, right? And they’re super outdated and You know, getting scuffed up so it’s about time that those need to get replaced and it’s a bigger house. So
00:05:00
Tony Stancato: Projected probably 10 to 15 grand. I would say somewhere in between there, probably more like 12 five, right? The kitchen, definitely outdated. We knew it was outdated when we bought it. The cabinets. Probably have pretty close to the ugliest paint ever. So, it’s just a matter of time before those need to get redone too. So there’s some additional paint that’s needed as well. So I would say at least five grand in pain. and then, you know, another big thing for us too was like
Tony Stancato: Our hot tub is right next to the neighbors and we had the neighbors. They weren’t a big fan of the property necessarily. So in order to be in their good graces, we would need to reposition the hot tub and move that to the other side of the property which would probably cost another I don’t know, three to four, three to four grand. Probably maybe
Jordan Painter: Yeah, that’s up that I’d say, probably more like five to seven. Electrical and…
Tony Stancato: Yeah. Yeah. And I mean the garage needed some work.
Jordan Painter: pouring a pad and labor.
Tony Stancato: So in the garage we would probably need least another five to ten thousand the furnace. You know, as we went through the inspections with the current buyer, the the furnace is what? 23 years old, something like that.
Jordan Painter: References of Property.
Tony Stancato: So Bernice
Jordan Painter: Yeah, so the secondary furnace was very old.
Tony Stancato: Furnace and ac. So another I think it was 10 grand or something on there and there’s just a lot of other quirky things. So just in those few things that we talked about, we’re already at call it 30 to 40 grand and we thought you know with some landscaping and some other stuff that needs to be done, we thought we’d probably be close to 60 to 80 grand. That means to be put back into the property over the next couple years. I mean, I think the decks either they definitely need repainted or like restained or need completely redone, right? And needed some gutters, and that kind of stuff. So, Again, I mean, so when we were looking at it, I was like, Oh man, 115 It did 115. Is that the best? We really think it’ll ever be able to do? Do we think we’ll be able to get it higher than 115? And the answer really was No, I think that’s the best. We’ll, we’ll be able to do going forward. So we thought
Tony Stancato: Well, it might be one ten next year or it might be 1:15 again, but if we think that’s kind of the peak of what it’ll do there, might not be a better time to sell then right now. And if we decide to keep it, then essentially we would forgo. Profit for the next two years based on reinvesting that money into the property, although it’s still probably be a good reinvestment. But again, with the neighbors being not overly excited about the property as well, there’s a little bit of a risk there. And I think on the other end of it, too. I mean, we disclose all this stuff, right? I mean, you mentioned it, you mentioned the neighbors to the agent in in all that. So the people that are buying are well aware of the work that’s needed. And that the neighbors aren’t, you know, Overly excited about the property.
Jordan Painter: Yeah. Yep. So we were, we went out of our way. I went out of my way when agents called Because it’s kind of, you know, when when people are looking at it from investments, like this did 115,000, why the heck are you selling it like? Well, here’s all the reasons and here’s the the pros and cons with it. It’s a, it really is an amazing property. I mean, you get there, we’ve only stayed there a couple times just because it’s always booked out when we would want to go. But It just has this feeling like around vacation in the woods. It really is a unique, stay a lot of lot of pros to it. And so, you know, they’re there.
Jordan Painter: Was a lot of questions, pretty much everyone who was interested. Like, why the heck you guys selling this? If it’s doing this? Well, so, yeah, we disclosed all the, the different things that would need to be done in again for us, you know, we’re trying to go big. We’re trying to scale quickly. You know, it’s really important to us to generate cash flow in profits so that we can continue to reinvest and scale, and grow, and do this again. And this one would have been almost like a standstill like Tony said for the next two or three years, it would have been kind of, not really getting us in. Moving the needle where we want it. And we’ve got two other fairly large projects for us. At least that are multi-units gonna cost a lot to furnish one of the projects we have.
00:10:00
Jordan Painter: Kind of dragging out, didn’t have the, the best experience with the contractor. So we’re gonna have to put probably a little bit more than we expected in that one certainly with time and energy. And so getting rid of the distraction and staying focused, I think it was, it was hard one to let go of, but I think in the, in the end it’s gonna be a, a pretty good pretty good run. So,
Tony Stancato: Yeah, and I mean, again it comes down to that risk of Of keeping it right with the neighbors that are there and Let’s say, for some reason, they didn’t allow this property to they shut us down, right? And we couldn’t continue to generate revenue on that. If the next buyer was to see that like Oh yeah it actually I don’t know what can’t do short-term rentals or something along those lines. I mean it’s just not going to get the amount that we got for the sale of it as a single family home. It is a good short-term rental, it is not a great single family home if if that makes sense. Right. I mean the bathrooms are
Tony Stancato: like there’s imagine three bedrooms all the way on one side of the house. And then, if you have to go to the bathroom in the middle night, you have to walk all the way over to the other side of the house. And I mean, it’s a, it’s a ways to go and you got to go up a couple different, you know, levels. A couple steps here multiple times to actually get to those bathrooms. So it’s just not a great layout. There’s no primary bathroom, converted, the garage in the bedroom. So, I mean, just as a single family home we would never get what we got. As a short-term rental, right?
Jordan Painter: Yeah, for sure. Based on the rental revenue, the value is much more substantial but substantial, then then single family. You know, just regular dwelling the garage, it’s got a great big garage. They they converted the old garage into living space and then added a new one but it’s kind of sets back from the house not attached. So a lot of the things that you know this is this is close to a half million dollar house. A lot of the things that a buyer in that price range would just expect in this market it just doesn’t have. So again like a lot of the finishes
Jordan Painter: I thought We’re gonna be an issue with people paying 15 to 1800 dollars a night in the peak season, the cabinets, like Tony mentioned, the cabinets in the kitchen. Had been painted by the homeowner previously and they looked terrible. The flooring in most of the house was the cheap laminate from probably 15 or 20 years ago. A lot of those things that I thought were going to be huge issue. The guests didn’t care about, they really didn’t. As long as it was clean, it wasn’t an issue. But somebody who’s living there for a half million dollars in that market would would not expect to see you know,…
Tony Stancato: If?
Jordan Painter: Three generations removed of laminate flooring, it’s not nearly nearly the quality in the style that you see, now getting getting installed in houses. So, Cool.
Tony Stancato: As a single as a single family home, what do you think it would get? Let’s say, Short-term rentals that aren’t even allowed in this area, let’s just pretend that. What what do you think that house would go for it?
Jordan Painter: Yeah, you know, I think I think it would probably have capped out in the condition. It was in probably 60 to 80,000 dollars less than we sold it for most likely in the condition. It’s in today. If we put some of that money into it, I think we, we probably could have gotten closer to what we actually have sold it for, but I’d say, minimum 60 to 80 thousand dollars less than what we sold it. For all of the interested parties that were really interested in it. Every single one of them wasn’t investor. We had we had we did have some, some potential owner occupant type of buyers, looking at it but none of them had any interest. The feedback I received from the agents who showed those houses was what I would expect from a buyer just looking at market value based on comparable sales.
Tony Stancato: If?
Jordan Painter: It’s too much work,…
Tony Stancato: You.
Jordan Painter: there’s too many negatives. There’s all these things. It doesn’t have that the clients wanted. And so yeah, for sure the interested parties were all looking at the price tag, the reviews and the uniqueness of the property.
Tony Stancato: Yeah, so we sold for 475 with 12,000 right around 12,000 in seller, concessions and if it was to just be a single family home residential property, you think it’d probably be more around the 400,000? Yeah.
Jordan Painter: Four to four twenty I think probably more realistically. Yeah.
Tony Stancato: Yeah. And I mean, I know we’re we talk a lot about buy and hold and, you know, ideally that is what you do, right? But I’ve had some great discussions with other people that are buying short term rentals and one of their Big drivers of returns is the cell. You know, get the revenue, get it up as high as you can optimize it show investors what it can do.
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Jordan Painter: It. Yes,…
Tony Stancato: And then sell it, and that’s where they get. That’s where they actually are factoring in a big part of their return. So we’ll make sure we kind of put together a One-sheeter and see what our return was on this property and sure we’ll share that with you guys. So,
Jordan Painter: hard as it is to let go of assets. I mean, there is something to be said for you just look at the full rate of return that you get. And if you can take away, it is, it is a lot of work to get these properties set up. If you can take away that friction for people in in the doubt of the unknown and it’s all up and running, it’s all furnished. There’s a lot of value there. So, you know, I think Yeah.
Tony Stancato: Five star reviews. I mean like Yeah if you were to walk in it again you walk through it first time and you see those cabinets and you’re like Oh dude, if we want to get guest experience we better get. But it’s like people walk in. They see, you know, an investor walks and they look at the previous reviews. Oh this review just came in, you know, three days ago and it’s got five star in. I mean, I think in general it’s a 4.98 I think we’ve got Two four star reviews since like in 18 months, you know. And one we knew was gonna be Four Star before she even showed up at the property. So it is what it is. But
Jordan Painter: Never going to make everybody happy, but Tony does his best to please most of the masses for sure.
Jordan Painter: So yeah, so again, I think it was it’s gonna turn out. Hopefully be a good decision and it’ll give us a little bit of extra cash, that is going to be needed in order to give the properties. We’re working on a little bit of extra pop, you know. It’s a really go all in on the amenity stack and not have to cut corners on some of the stuff that we’re doing. We really want to make sure that especially moving forward, that we’re doing as much of this stuff on the front end and not, you know, for this one it was our first one. We were still trying to work on cash flow and building up funds and trying to keep our out of pocket lower. So, you know, I think in the future we’re really trying to get these properties buttoned up even at a higher level, like the cabinets and some of those things, we mentioned needed to be done. We could have done those out of the gate. Turns out, it didn’t make a huge impact overall, but it’s, it’s a lot easier to have all that stuff done up front and I have to keep going back and fixing stuff later so that this sale is, is gonna allow us to do that on a couple of other projects to make sure that I think,
Jordan Painter: Our big thing this year is we’ve talked more about. It is like we we’ve got to optimize everything that we have. And so optimizing the one that we’re selling would have taken away from our optimization of the ones that we actually think have bigger potential for returns. So definitely excited to see where that goes and hoping for the best on these these projects.
Tony Stancato: Yeah, so I would say the big key takeaway to is just don’t be afraid to take chips off the table, right? If you had a banner year last year, and you’ve thought about potentially selling like, Now is probably a good time, you know? Again, it took us what a week to get, get it under contracts. I think we only had like eight buyer or eight walkthroughs, eight. Showings. And three offers primarily all from investors. So, yeah, if you had a banner year and thought about buying something else, it could be a good time.
Jordan Painter: Yeah, no doubt.
Tony Stancato: all right, until next time
Related: How to Scale Short Term Rentals