REI INK

Buy & Hold

Avoid These 6 Rental Renovation Mistakes

Capitalize on Your SFR Investment By Daniel Neff Home renovations will always be part of being a single-family rental (SFR) owner/operator. However, the renovations you decide to tackle will vary based on your long-term plan for your SFR properties and how long you plan to hold them before selling. As you plan your renovations for 2024 and beyond, watch out for these rental renovation mistakes we frequently see in the field. For example, if you are planning to hold a property for a short time, you may choose to spend more because of the potential to get a quicker return, or if you are planning to flip it you can bake renovation costs into the sale price. If you plan to hold the home for a 10-year cycle, you may want to invest in renovations upfront, so you do not have excess maintenance issues (and costs) during that decade. For a five-year holding pattern, you’ll likely choose to be more conservative with renovations to maximize your investment for the medium term. No matter which holding cycle you’re in, the longer your home goes unrented, the less money you make. Your renovation process needs to be as quick of a turnaround as possible ($1,000 a day in renovation costs is a standard expectation). As you plan your renovations for 2024 and beyond, watch out for these rental renovation mistakes we frequently see out in the field. Renovation Mistake 1 Focusing on trends  Your renovations should aim to give you the longest staying power to ensure the property is attractive to renters and to help you avoid the need to renovate while the home is occupied. It is always cheaper to keep renters in the property versus having to take it off the market when it is time to find the next tenant. To make sure you renovate it right the first time, go for timeless fixtures and clean lines over “of-the-moment” trends to help with longevity.  Renovation Mistake 2 Choosing cosmetics over function Aim to make the home as functional and as open as possible to give renters the ability to make it their own. Making prescriptive cosmetic changes or dividing up spaces so that every room has a distinct purpose could prevent renters from being able to decide what they want to do with the living space and impact your investment in the process.  Renovation Mistake 3 Neglecting major appliances and needed replacements Investing on the front end to ensure that your mechanicals are in good functioning order lowers your odds of needing to spend that money as an operating expense while you have renters in the home. It also decreases the likelihood of having a potential billback from them as a result. Upgrading big-ticket items like HVAC, hot-water tanks, and appliances up front can save you time and effort once you have renters in place. A good rule of thumb is that if the item is older than 10 years consider replacing it as part of your rental renovation. Renovation Mistake 4 Not being on par with the rest of the neighborhood  While you are not aiming for your property to be the nicest house on the block, you do want to meet the traditional standards of the neighborhood. You can do this by ensuring the exteriors blend in. For example, if every house in the neighborhood has a fenced-in yard and yours does not, it is probably a good idea to add one (or to remove a fence if other homes do not have one). Making sure driveways and sidewalks are in good order not only helps with curb appeal, but also helps keep the property safe for tenants and guests. Renovation Mistake 5 Neglecting the garage or basement  While it may be cheaper to remove a garage that is not in great shape versus renovating it, this could actually cost you in the long run. Garages add value to homes and are typically a big selling point for renters, especially if you are in an area where they are detached. Not finishing or renovating a basement can be another missed opportunity to maximize your investment. Depending on your market, renovating it could enable you to increase your rental rate per month by $500 or more. Renovation Mistake 6 Not upgrading your lighting  Not upgrading your lighting is a mistake frequently skipped during renovations that is an easy (and cost-effective) fix. Converting it all to LED means work orders for lighting will certainly decrease—and may even become nonexistent. And renters like the cost-savings generated by low-energy-consuming lighting. SFR home renovation decisions can be challenging and vary based on a variety of considerations. But keeping your long-term plan in mind and sidestepping renovation mistakes like these can help you capitalize on your SFR investment. Bonus Tip Focus on the Kitchen  If renovations are part of your plan, consider investing in the kitchen to make the house feel more like a home, as well as adding convenience features. Kitchens are often the focal point of the home, not only serving as a functional space for cooking and eating, but also as an informal gathering place for friends and family. Updating appliances, upgrading lighting fixtures, replacing hardwood with more durable wood-like tile or giving the cabinets an affordable paint job may help a renter choose your unit over another. If you are looking to make a bigger splash, consider adding a kitchen island or adding a work nook in the kitchen (especially for those who need to use all of the bedrooms for family members). These options provide more usable space and can come in handy for those working at home or needing an after-school homework spot for the kids. Regardless of what you decide to do when upgrading your SFR homes, consider working with a company that performs regular work on these types of properties, like MCS. They can make recommendations on areas that can add value, reduce renovation costs, and help keep your homes rented.

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Home Investor Share Inches Higher

Small Investors are Gradually Regaining Their Market Share By Thomas Malone The high U.S. home investor share seen over the past two years nudged up higher to close out 2023. In December, the share of single-family purchases that were made by investors hit 28.7%, an all-time high in CoreLogic’s data that dates to 2010. This was a clear rise over the Fall share and raises the possibility that the share could rise above 30% in early 2024. Figure 1 shows the share of home purchases made by investors since January 2019. In 2019 and 2020, the investor share never went above 20%, but in 2021 this share leaped up, and investors have made roughly a quarter of all single family purchases in each year since. Though the investor surge began in the low interest rate environment, it has persisted throughout all interest rate increases, and is not showing anything that would indicate it will return drop back below 20% soon.   Figure 2 illustrates the number of U.S. home purchases made by investors and non-investors through December 2023. All these numbers are well below the levels investors purchased at in the previous 2 years, where investors made more than 100,000 purchases in each month. Notable in Figure 2 is the large drop in owner-occupied purchases, down about 200,000 purchases a month from the levels seen from 2020 to 2022. This is our earliest snapshot of how different types of buyers might react to rates above 7% and shows an early sign that investors may be the more resilient group. Small investors make up most of the market Figure 3 shows that throughout 2023, mega-investors (those that own 1,000 or more properties) and large investors (those that own 100 to 999 properties) have each held market shares of about 10%. Medium investors (those that own 10 to 99 properties) made up about 35% of the market, and small investors (those that own 3 to 9 properties) were the remaining 45%. Though we are seeing an uptick in investor share, this is masking what is really a cold market. Flippers are buying at rates that are well below their pre-pandemic levels, and large/mega-investors have stopped their spending sprees. Small investors are gradually regaining their market share, but still are only buying at their pre-pandemic levels. Interestingly, it may be the low rates of 2020-22 might be bringing new ‘Mom and Pop’ investors into the market. The low rates of this period let a huge number of existing homeowners refinance their mortgage to more favorable terms, raising the chances that they rent out their existing home when they move, rather than sell. This is happening while rising rates and prices push potential first time buyers who cannot make a down payment back to the rental market.

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Private Lenders at the Crossroads of Buy-and-Hold Commercial Real Estate

A Fresh Era is Emerging in Commercial Buy and Hold Lending By Ren Hayhurst In a world where unpredictability has been the norm, 2023 seems to be casting a steady light on the buy-and-hold commercial real estate scene. Amidst all the ups and downs caused by fears of inflation, recession, and increasing interest rates, it looks like opportunities are cropping up for smart CRE investors who see the value in riding out the storm with buy-and-hold strategies. With commercial property pricing finding its footing and interest rates showing signs of slowing down, the idea of buy-and-hold is shining brighter for investors. Proof of this shift in sentiment comes from a recent Investor Sentiment Survey, a tag-team effort by RCN Capital and CJ Patrick Company. This survey asked real estate investors from all around about their go-to strategy, and guess what? A solid 52.96% shouted out that they are bullish on “Buy-and-Hold for Rentals.” But it is not just about tradition — lending is getting a fresh makeover. The spotlight is on private lenders cozying up to direct lending, making waves in buy-and-hold with an exciting twist. BlackRock’s research reveals direct lending’s strength against other asset classes. Amidst these shifts, delving into industry analyst data reveals intriguing insights. GoDocs, for example, has closely monitored trends within its customer base. Their findings highlight a notable increase in buy-and-hold loans among their private lending customers. This trend resonates with the broader market, where private lenders are actively exploring fresh opportunities within the buy-and-hold sector. GoDocs has noted a significant increase in the volume of loans being made by private lenders to finance acquisition of BTR and buy-and-hold properties or to finance the rehabilitation of such properties for long-term investment. This market upswing signals growing appetite for resilient long-term investments that weather fluctuations. Investors value consistent income and asset appreciation, making buy-and-hold a robust portfolio avenue. This renewed focus, along with insights from analytical leaders like GoDocs, paints a vibrant picture of a market poised to offer stability and value amid a dynamic economic landscape. Banks and credit unions will delay re-entry as Congress discusses potential regulatory restrictions, chilling lending by regulated entities. As private lenders consider expanding into the buy-and-hold market, there are key automation focus areas:  »         Streamlined Loan Origination and Underwriting  »         Improved Data Analysis  »         Streamlined Portfolio Management  »         Auto Communication and Reporting  »         Ensured Compliance and Regulations  »         Seamless Property Management Integration  »         Automated Risk Assessment  »         Loan Doc Automation A New Buy and Hold Market Amidst market fluctuations, a reinvigorated buy-and-hold commercial real estate arena emerges, fueled by rising rent rates and robust housing demand. Investors are gravitating towards the stability and prolonged income potential of buy-and-hold strategies, encompassing diverse sectors like Build to Rent (BTR) and vacation rentals. Private lenders, adopting direct lending models, stand poised to shape this evolving landscape, as leaders like GoDocs reveal a surge in buy-and-hold loans. This trend underscores the value of long-term investments in navigating market uncertainties and cultivating stability. With industry changes and real-world data as our guide, a fresh era is emerging in commercial buy-and-hold lending. A game-changing approach is taking center stage, reshaping how lenders navigate today’s real estate world. GoDocs, drawing insights from its extensive customer interactions and industry dialogues with leading lenders, presents an innovative, comprehensive approach to the buy-and-hold market and practice: Reimagining Financial Evaluations This innovative approach includes employing Loan-to-Value (LTV) and/or Debt Service Coverage Ratio (DSCR) tests as closing and ongoing covenants. The data-driven analysis clarifies project financial viability. Precise and recurrent financial reporting, with timely property updates, ensures a holistic project understanding. Emphasizing borrower and guarantor financial covenants, including periodic evaluations of the tangible net worth and liquidity of key loan parties, boosts accountability and stability. Dynamic Lender Engagement As market dynamics fluctuate, the power of scheduled lender engagements is a critical component. This empowers lenders with the flexibility to recalibrate loans and reevaluate collateral in response to evolving circumstances. Particularly relevant when borrower or guarantor financial health falls below covenant tests, or property performance falters in relation to DSCR and/or LTV requirements, this dynamic approach ensures timely adjustments, positioning projects for resilience. Proactive “Course Correction” Mechanism To anticipate and preempt challenges, a pivotal shift lies in embedding rigorous financial covenant and reporting tests within both new loan origination and ongoing interactions. Enhanced by an expanded spectrum of lender remedies, this framework empowers lenders to collaboratively re-set their relationships with borrowers proactively, ensuring that potential difficulties are addressed before they escalate into long-term struggles. This proactive stance not only fosters resilience but also optimizes the potential for sustained prosperity. Paving the Path Ahead for Buy and Hold As lenders step into the challenges and opportunities presented midway through 2023, the trends provide not just insights, but also a roadmap to navigate the ever-evolving landscape of commercial real estate financing. Buy-and-hold is not merely a strategy; it is a trend gaining momentum, supported by data-driven observations and a broader shift in investor needs and demands. Whether you are an experienced investor seeking stability or a new-comer looking to establish your presence, these insightful observations provide a gateway for savvy lenders to seize the opportunities shaping the buy-and-hold market to better meet their needs and the needs of their borrowers. In this landscape of possibilities, private lenders cannot afford to linger on the sidelines. The invitation is clear, and the reasons are compelling: a robust market, a proven strategy, and an open road to growth. The observations here are about shaping and influencing the trajectory of commercial real estate. By embracing the buy-and-hold expansion today, the path is forged toward a future that is both transformative and enduring. The moment is now, and it calls for action, innovation, and a strategic vision that defines the future of the buy-and-hold market. Please visit https://godocs.com/

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Leveraging Pre-Foreclosure Properties

Create an Investment Portfolio That Stands the Test of Time By William Bonnell Real estate investment has long been regarded as a solid way to build wealth, and within the realm of real estate, leveraging pre-foreclosure properties can offer savvy investors a unique opportunity to establish a lucrative buy and hold portfolio. This strategy involves acquiring properties that are on the brink of foreclosure, often at a deeply discounted price, or perhaps with favorable terms, such as creative financing, which can leave your personal credit available for other opportunities, and then holding onto them as long-term investments. In this article, we will delve into the concept of pre-foreclosure investing, its benefits, potential risks, and how it can contribute to the growth of a robust buy-and-hold portfolio. Understanding Pre-Foreclosure Properties Pre-foreclosure refers to the period when a property owner has fallen behind on mortgage payments and is at risk of foreclosure by the lender. During this phase, the property is not yet repossessed by the bank, and the homeowner still technically owns it. Investors can approach distressed homeowners with offers to purchase their properties, thereby helping the homeowner avoid foreclosure while securing a potential deal for themselves. Most homeowners who fall behind on their mortgages eventually have to sell, as most other options available to homeowners who are financially struggling have very low success rates, especially once they are seriously in default. Benefits of Pre-Foreclosure Investing  »         Discounted Prices // One of the most significant advantages of investing in pre-foreclosure properties is the potential for acquiring real estate at a fraction of its market value. Distressed homeowners are often motivated to sell quickly to avoid foreclosure, which can lead to favorable negotiations for investors.  »         Equity Opportunity // Many pre-foreclosure properties have built-in equity, which can be leveraged to secure financing or fund improvements.  »         Flexible Terms // Investors can negotiate directly with homeowners, allowing for creative financing options, such as seller financing or lease-to-own arrangements that may not be available in traditional property purchases. Utilizing some of these methods can allow investors to acquire more properties than they may otherwise qualify for with traditional financing methods.  »         Less Competition // Since pre-foreclosure investing requires proactive research and outreach, there’s often less competition compared to other real estate investment methods, providing investors with a chance to find hidden gems.  »         Community Impact // By helping distressed homeowners avoid foreclosure, investors contribute positively to the community while also benefiting financially. Steps to Leverage Pre-Foreclosure Properties for Buy and Hold Investing  »         Research // Identify properties in pre-foreclosure through public records, online databases, or working with a real estate agent specializing in distressed properties.  »         Assessment // Evaluate the potential value of the property, its condition, and the amount of equity available. This assessment will help you determine if the property aligns with your long-term investment goals.  »         Contact Homeowners // Reach out to homeowners in pre-foreclosure to express your interest in purchasing their property. Approach these conversations with empathy, understanding the homeowner’s situation and motivations.  »         Negotiation // Once you establish contact, negotiate a deal that benefits both you and the homeowner. This might involve purchasing the property at a discounted price or structuring a creative financing arrangement.  »         Due Diligence // Conduct thorough due diligence, including property inspections, title searches, and legal consultations, to ensure there are no hidden issues with the property that could affect your investment.  »         Financing // Secure financing for the purchase. Depending on the property’s condition, you might explore conventional loans, private lenders, or even usethe property’s equity to fund the acquisition.  »         Long-Term Vision // Incorporate the acquired property into your buy-and-hold portfolio strategy. Assess the potential rental income, property management needs, and appreciation prospects to determine its role in your portfolio. Mitigating Risks and Challenges While pre-foreclosure investing offers many benefits, it is crucial to be aware of potential risks and challenges:  »         Legal Complexities // Pre-foreclosure laws and regulations vary by jurisdiction. It is essential to understand the legal process in your area to navigate the transaction smoothly.  »         Emotional Dynamics // Dealing with distressed homeowners requires empathy and sensitivity. Some homeowners may have emotional attachments to their properties, making negotiations challenging.  »         Property Condition // Properties in pre-foreclosure may require significant repairs or renovations. Accurately assessing the cost of these improvements is essential for ensuring a profitable investment.  »         Market Fluctuations // Real estate markets can be unpredictable. While pre-foreclosure properties have potential for high returns, market downturns can affect property values and rental demand. Bigger discounts not only boost profits, but they can also help to minimize risk.  »         Extended Timelines // Pre-foreclosure deals can take longer to close due to negotiations, legal processes, and homeowner circumstances. Patience is very often rewarded with financial blessings. Building a Buy and Hold Portfolio with Pre-Foreclosure Properties Integrating pre-foreclosure properties into a buy and hold portfolio can yield substantial benefits over the long term. As you continue to acquire and manage these properties, your portfolio’s value can appreciate, and the rental income can provide a consistent cash flow stream. The equity gained from each property can be leveraged to acquire additional assets, further expanding your portfolio’s size and diversity. In conclusion, leveraging pre-foreclosure properties to build a buy and hold portfolio is a strategic approach that can provide investors with opportunities for discounted acquisitions, creative financing arrangements, and potential equity growth. However, it is essential to conduct thorough research, due diligence, and negotiations while remaining aware of the associated risks. Done correctly, investors can create a well-rounded and profitable real estate investment portfolio that stands the test of time. Please visit https://www.ipa4rei.com/

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Single Family Institutional Investor Industry Turns 10

A Look at the Evolution of the Industry and What to Expect in the Future By John Gordon In an issue of REI INK dedicated to the fix-and-hold single family rental business, it is appropriate to note that many of the institutional investors have or will celebrate their tenth anniversary this year. If we take a quick glance across the playing field, we see Invitation Homes, Progress Residential, Main Street Renewal and American Homes 4 Rent all passing or getting ready to pass the 10-year milestone. Fix-and-hold as a dominant strategy gained huge momentum in the market crash of 2008–2009. Just prior to that, it was popular and profitable to fix-and-flip. Then the crash. Investors could not flip for a profit. They were upside down on the property at its current market value. They still needed the property to generate cash, so they rented the home until they could sell it. Many discovered, almost by accident, what other investors knew. This fix-and-rent concept had merit. It stuck and it grew. I’ve been professionally involved in the industry in some fashion since first engaging Waypoint Homes in Oakland, CA in late 2011. But that was not the beginning. Associations, like National Real Estate Investors Association have been paying attention and thriving in this space since the 1970s. If the truth is told, the Single-Family fix-and-hold concept has been around for a long time, at least since the Middle Ages if one thinks about it. It could be argued that it’s the second oldest profession. Sales, of course, being the oldest. The Evolution of Fix-and-Hold Regardless of when the industry began, the last ten years have seen a genuine evolution in the fix-and-hold arena. Let’s peek at a few of the key elements of the industry that have evolved in a meaningful way. Funding and addressing the challenges presented by the sheer diversity of properties along with the geographic footprint of even the smallest portfolio have evolved as have the guiding principles for the business and the role of technology. Prior to the institutionalization of the business, funding investment activity was not easy. When I first engaged single-family investors to sell product, there were few, if any, banks willing to fund investors. Wall Street was not aware of the potential and “hard money lenders” were the dominant players. I cannot accurately opine about which institutions were first to the table with “Wall Street” money, but that infusion of cash and the abundance of distressed assets led to a frenzy in the marketplace. “Super Tuesday” no longer had electoral implications. It was an often raucous auction on the courthouse steps with bidders carrying briefcases filled with cash and or blank checks. It was an exciting time and, while a bit unruly or unorthodox, it was a crucial time for investors, the industry and the residential real estate market as a whole. “Toxic assets” became revenue producing portfolios. This infusion of institutional funds was critical to the evolution of the industry both in size and credibility as an asset class. Reality quickly set in. The investors discovered an entirely new set of monumental challenges. There was the diversity of floor plans. In a portfolio of thousands of homes, there were thousands of floor plans and layouts. No two were exactly alike. Additionally, the geographic footprint of a portfolio in a single market could be 400 square miles. With obstacles like this in as many as 15 to 20 different markets across the country, the challenge of efficiently renovating and renting the newly acquired assets loomed as a truly daunting task. It was immediately obvious that most of the disciplines from multi-family renovation and management were not helpful in the single family because of the diversity and geography of any given portfolio. To this add the element of competition and things get interesting very quickly. How do you address the challenges for the properties you currently own, and then how do you scale into other markets to capitalize on the opportunity and establish your company as dominant in the space? These challenges and the expectations from institutional investors forced the investors to define and support some guiding principles for their business. The Evolution of Guiding Principles How have the guiding principles of the industry evolved? Predictability and stability were basic expectations of the investors and the operators in the C-Suites and on the ground. The industry needed standardization as it was the key to addressing both expectations. The exceptionally large investors adopted what the small Mom and Pop investors already knew. Maximizing return on investment meant selecting and staying within a stable and affordable product mix and standardizing the renovation process. To do this, many turned to industry partners for help and support. At The Home Depot, product selection and the RenoWalk app, a highly customizable scoping tool, enabled strong partnerships. The RenoWalk concept was innovative and yet fundamental. It provided a way for a company to standardize the scoping process, the product, and price across multiple markets. It kept a running total of cost for product and labor and allowed the user to push an order for product directly to The Home Depot. GL Codes could be assigned to make as many connections as possible with the business at large. RenoWalk is still a critical component of process standards for companies of every size. As the RenoWalk concept caught on, investors wanted tools and technology solutions that incorporated more of their business and that was compatible with all internal operations. To accomplish this, many developed their own scoping and app solutions. There was also an evolution in how investors thought about product selection. The whole understanding of cost of acquisition vs. cost of ownership drove decision making to a greater and greater degree. In the beginning, first cost and fast access were the decision points. As companies started paying attention to turns and maintenance details, suddenly paying a bit more for a more durable product made sense. Additionally, for items that required routine

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Our Short-Term Rental Adventure

Not as Simple as YouTube Makes It Look By Lori Wyatt My journey into the world of Short-Term-Rentals (STRs) began as an unhappy accident. I had purchased a home in 2006 as my primary residence. By 2012 we needed to move but were still underwater. We decided to rent to a long-term tenant. At first, she was great, but two years in she lost her job and became the tenant from hell. On her way out the door, on a particularly cold Chicago day, she shut the heat off. By the time I gained access, the worst had already happened. As I opened the door, I could hear a sound similar to Niagara Falls rushing through the entire house. A full year and $110,000 later the house was put back together. By then it was 2015, and I could have sold it but wasn’t sure. When faced with the thought of another potential nightmare tenant, I couldn’t do that either. I was approached by my neighbor who had been running a successful traditional rent-by-the-room sort of Bed and Breakfast. They lived on the top floor and rented out the other seven bedrooms in the house. He offered to rent the house so he could add more rooms. We couldn’t agree on a monthly amount, but it got me thinking. If he is having so much success, I should give it a try. We dragged out every piece of spare furniture we had, hit Facebook for some used furniture, snapped a few pics, and thought we were good to go. Our hopes at the time were that we cover our mortgage. The day we put our first property live, we were blown out of the water at the response as requests started rolling in. We were stoked. Initially, we hit some speed bumps and bad reviews as our crappy furniture didn’t cut it and we needed to upgrade fast. But we could also see that things get beat up, so what to do? We found a high quality used furniture liquidator and started upgrading. Each year, we found a new property and renovated it to add to the portfolio. By 2020 we had six properties. They were all in an area called Bronzeville which was a Southside neighborhood that used to be home to the Robert Taylor and other notorious low-income housing projects. But, there was a convention center, U of C had both the school and the hospital, and there were several wedding venues nearby. And it was 15 minutes from downtown. We had a great mix of convention goers, sports fans, and families coming for a graduation or wedding. Then COVID happened. When it was announced that the St. Patrick’s Day parade had been canceled, we knew we were in deep trouble. We had been toying with selling our house in the near future, but the near future became immediate. We put it up both for sale and rent. Less than a week later, we had a renter who needed to work remote and couldn’t do that with his two young sons running around. We moved into one of the many empty Airbnb’s and got to work. Everything was up for grabs. Some we put up for rent, some for sale. We needed to pivot and fast. Luckily, the market was on fire, so we quickly sold two, rented two. That left us with two; one we were living in as we sold our original primary. That home was a two unit, so we still rent one as a furnished short-term rental, but only for a month or more. It’s less work, and a more professional crowd, and since we live right on site we like it better. The last house was a challenge because I did NOT want to let it go. This was the original house that had been blown up, and I wasn’t letting it go. So, we rented to short term medical professionals, insurance companies looking to house a family whose house had burned, and a girl who produced a cooking show, and a few other families looking to relocate. Conventions have not really come back yet, and I don’t know if they ever will get back to pre-COVID levels. We still own two of the other properties, but without business travel fully rebounding, it’s best to keep them rented with long term folks for now. One, we will most likely sell soon. We do plan to rebuild our small portfolio, but we won’t do so in Chicago. Short-term rentals are a lot of work. We never trusted anyone to run them, so we did it ourselves. It’s a great business, and you can make a lot of money, but it is not some get-rich-quick situation, as portrayed on YouTube. As more commercial operators enter the space, the bar is raised, meaning finishes and furnishings better be A+, or get ready for bad reviews. It’s amazing to me when I go on Airbnb or VRBO the shift I have seen in some of the homes. Travelers expect hotel quality beds, sheets, pillows, towels and swank furnishings. If you buy cheap trashy furniture online, expect that you will be replacing it within six months. These are the small things that eat up your profit. Overall, we have met some amazing people and been able to travel much more because of our extra income. My husband and I are a blended family totaling nine children between us. Our houses are large and fit large groups because we know if you have a large family or travel with extended family, STR’s are the only way to go. We are heading to Europe this fall to explore the idea of owning a STR in France. The possibilities are endless. As we build our portfolio again, we will be mindful of where we go and who our audience is. We will build in places we would enjoy going and places that are business friendly. Great professional photos are a

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