Thread by @ssigsbee

Memorial Day weekend we left Vegas and headed to Alabama for Summer vacation.  I was relaxed, excited for a quiet Summer. This Summer wasn’t going to be like previous Summers, I told myself, at the time I only had a few rehabs going on…

and with real estate prices continue to sky rocket deals were looking slim.
 
10 weeks later, as I’m just settling back into Las Vegas, that certainly is not how the Summer went.  I spent another Summer working 80 hour weeks on real estate.

When I wasn’t working I was taking my kids fishing, golfing and to swim meets.  It was an incredible Summer that included a lot of unique challenges as well as some very exciting new projects, so here is my Summer recap with my favorite photos.

In June, Alabama experienced record heat. It’s always hot in Alabama in the Summer, but nothing like this as for a couple weeks straight as it was in the high 90’s with max humidity.  This caused problems we had never seen before, as 9 of our AC units went out entirely on houses.

That expensive lesson was that in these older homes we need to do a better job of insulating walls.  During an extremely high occupancy month like June, juggling guests around to different properties all while spending 10’s of thousands on replacing these AC units was a challenge

Along with this came record humidity.  This combo caused a new issue we’ve never dealt with and that was the warping of floors in 7 of our properties.  The humidity was trapping condensation under our floors causing the cheap LVP I was (previously) using to warp causing hazards.

We had to go in and replace sub floors and flooring in all of these properties and went back with a much more expensive water proof laminate flooring.  This again was a unique new learning lesson this Summer.

At the end of Summer, the town of Dauphin Island, which is a vacation destination that has always embraced STRs, proposed an ordinance banning short term rentals on 25% of the island in an attempt to create a corridor for full time residents to live, unbothered by STR guests.

The problem for me is that a large portion of my rentals are in that corridor.  We have put together a large group, hired a lawyer, and are currently fighting for home owner rights but it has certainly been a challenge.

All of these challenges have came during a time where (at least in Alabama) real estate prices continue to soar higher, interest rates have risen, and consumer spending has tightened which has led to lower occupancy’s at lower nightly rates.  I mention these challenges because

I know for the past few years I’ve been very vocal and positive about how incredible investing in real estate and specifically STR’s is, but it would be disingenuous to not also share the trials and tribulations that come along with owning a 60 unit short term rental portfolio.

With that said, let’s talk about the good and exciting stuff that happened this Summer, because there was a lot of that too! We converted 7 of our long term rentals into short term rentals.  These are houses that were renting out for an average of $900/mo.  We went in and gave…

them full cosmetic rehabs and have since listed them for rent.  These same homes will do on average $3,000/mo in gross revenue as STR’s. This Summer we purchased 6 new houses and are finishing up the rehabs now on all of them and they should be in operation in the next few weeks!

Our best properties continue to be our small multi family’s on Dauphin Island.  The family of 4 that is looking for a reasonably priced beach vacation book our 2 bedroom 1 bathroom condo’s at a much higher frequency than other property’s.  Take into account that we’re able to..

split expenses across multiple doors and the financials are just amazing.  Unfortunately, there’s only 30 lots left on the island that are zoned multi family.  I purchased 4 of those lots this Summer and am currently working with architects to do our first ground up construction.

By far the most exciting part of the Summer was in mid July a legacy double sized lot (150x200) popped up for sale on the island.  Directly on the main street on the water, and in my opinion, the best undeveloped piece of land on the island.

The lot is zoned resort commercial which enables you to build small multi family, or a boutique hotel.  We’re going to take our time on this one as you only get one shot at a property like this, but our current plan is leading us down the path of a small boutique hotel.

Finally, I spent much of the Summer researching and demo’ing property management softwares designed specifically for short term rentals.  When we were managing 20 properties we were able to stay on top of things just using the OTA’s (Airbnb and VRBO).  We would manually adjust

our prices and keep track in those platforms.  Now that we have scaled to 60 this has grown to be difficult so have selected a PMS to integrate into.  I’ve been meeting with their development team weekly and am very excited to streamline a lot of the processes in our business.

Investing in STRs is certainly harder than it’s ever been before.  This Summer brought on some expensive learning lessons but I’m very confident in our ability to run this business.  I’m looking forward to the challenges we will be faced with scaling this in the coming years!