Fender chief Andy Mooney tunes into the market with a $13.5-million offering

After two decades in Hollywood Hills, Andy Mooney is ready for a change of scenery. The CEO of Fender — the guitar and amp manufacturer founded in Fullerton in the 1940s — just listed his estate above the Sunset Strip for $13.5 million.

Perched on a promontory lot, the property combines two parcels for a total of nearly an acre. Buyers have two options: Keep the existing house, a humble 4,700-square-foot traditional, or raze it and erect a mansion of up to 14,565 square feet.

The location is the story here, as the scenic setting takes in views stretching from downtown L.A. to the Pacific Ocean. The house itself wraps around an elegant courtyard, and the compound also holds a guesthouse and swimming pool surrounded by landscaping and vegetable gardens.

Advertisement

Built in the ’50s but updated since, the house holds four bedrooms, 5.5 bathrooms and a handful of sunny, open-concept living spaces. Black accents break up the whitewashed interior, bringing contrast to the windows, doors and checkered-tile floors in the primary suite bathroom.

The most impressive space is the formal living room with a fireplace, which sits under vaulted beamed ceilings and opens to a second-story deck overlooking the city. Other highlights include a gym and indoor-outdoor lounge lined with built-in cabinetry.

James Harris of the Agency and Josh Flagg of Rodeo Realty Beverly Hills hold the listing.

Mooney joined Fender Musical Instruments Corp. as CEO in 2015. Before that, he held executive roles at Quiksilver and the Walt Disney Co., where he created the Disney Princess media franchise as chairman of Disney Consumer Products.

Source: latimes.com

DJ Paul Oakenfold spins Midcentury treehouse onto the market

On a leafy lot in Hollywood Hills, Grammy-winning DJ and record producer Paul Oakenfold is tuning in to the market with a $3.7-million offering — about $1 million more than he paid in 2015.

The house, a dazzling post-and-beam perched in Outpost Estates, was built 70 years ago as the personal residence of Robert Boyle, the Oscar-nominated production designer who collaborated with Alfred Hitchcock on films such as “North by Northwest” and “The Birds.” Boyle designed the place himself.

Wood and glass adorn the Midcentury’s exterior, with huge windows and expansive terraces taking in views of the city below.

Advertisement

Over the years, the living spaces have been updated with whitewashed beams over dark hardwood floors. A freestanding fireplace anchors the scenic living room, and the dining room has a brick fireplace of its own.

Floating stairs descend to the lower level, where the sweeping views continue in the family room and office. Four bedrooms and 3.5 bathrooms complete the 2,825-square-foot floor plan.

A native of England, Oakenfold has twice been named the No. 1 DJ in the world by DJ Magazine. Over the course of a prolific career that stretches to the 1980s, the 57-year-old has remixed songs for Madonna, Britney Spears, the Cure, U2 and Michael Jackson, winning three Grammys along the way.

Brett Lawyer of Hilton & Hyland holds the listing.

Source: latimes.com

Frank Sinatra’s Palm Desert getaway gets a price cut

Ol’ Blue Eyes’ Palm Desert hideaway is back up for grabs. The desert estate, which spans 7.5 acres in the rocky hills of Coachella Valley, just relisted for $4.25 million, down a quarter of a million from its last asking price.

Dubbed Villa Maggio after Frank Sinatra’s Oscar-winning role in the 1953 war drama “From Here to Eternity,” the secluded compound is perched at an elevation of 4,300 feet, providing a relatively cool escape from the desert heat below.

Sinatra helped design and build the compound in the 1970s, and though it’s been restored over the years, it still includes much of the tile and wallpaper that he chose back then. The gated estate holds three buildings: a five-bedroom main house, a three-bedroom guesthouse and a one-bedroom pool house with two saunas and a massive stone fireplace.

Advertisement

Midcentury in style, the main house has a cabin vibe with warm wood and lots of stone in the living spaces. Dramatic beams hang over the great room, and stained-glass windows touch up a scenic dining area that expands to a covered deck with views of the rock-laden landscape below.

A similar design palette carries over into the guesthouse and pool house, and outside, amenities include a resort-style pool, lighted tennis court and helipad.

Sinatra, who died in 1998 at 82, sold more than 150 million records during his prolific music career. Hit songs by the leader of the Rat Pack, which included entertainers such as Dean Martin and Sammy Davis Jr., included “Strangers in the Night,” “My Way” and “New York, New York.”

Markus Canter and Cristie St. James of Berkshire Hathaway HomeServices California Properties hold the listing.

Source: latimes.com

Santa Monica’s historic Sears store has been remade as office space, but who’s renting?

A local landmark since shortly after World War II, the Santa Monica Sears store has spent more than two years getting a $50-million makeover to turn it into a chic office building for creative types, spiced with a choice handful of restaurants and stores appealing to locals and the millions of annual visitors who typically visit the seaside city.

The ambitious project is intended be a showcase for how to reuse obsolete department stores in urban areas. Its owners predict it will turn out that way, but their timing has run into a global catastrophe.

Now that the complex, renamed Mark 302, is ready for tenants to build out their own spaces, the pandemic has knocked the office and restaurant rental markets on their heels.

Work started on the former Sears in a different world — Santa Monica office space was hard to find, and the restaurant scene thrived. Now, few new office leases are being signed anywhere in the region, and closed restaurants are heartbreakingly commonplace as COVID-19 fears and operating restrictions drive diners back home.

Advertisement

A worker in a hard hat and high-visibility vest walks past glass doors of an empty building

A side entrance has been added to the remodeled Sears store in Santa Monica. A 75-foot-by-25-foot mural will eventually be added to the exterior wall above.

(Mel Melcon / Los Angeles Times)

“It’s been a challenging market,” said Ken Lombard, chief operating officer of Seritage Growth Properties, which owns the former department store with partner Invesco Real Estate.

Despite the current headwinds, the developers proclaim optimism about the prospects of Mark 302. It has a lot going for it, they say, starting with a Santa Monica address.

“It’s unique, and it’s got a great location in what folks consider to be the tech corridor of L.A.,” Lombard said, and it should hold appeal for businesses in the economically resilient fields of technology and entertainment. “The coolness of the building and the type of design lends itself to that type of tenant.”

Advertisement

The Sears logo above the entrance to a Streamline Moderne style building

A shopper enters the Santa Monica Sears in summer 2012. The store was closed in 2017.

(Ricardo DeAratanha / Los Angeles Times)

The store was designed by architect Rowland Crawford in a late Art Deco style called Streamline Moderne, known for curving forms and long horizontal lines. Crawford designed several Los Angeles-area buildings, including the Brentwood Country Mart and the Times-Mirror building in downtown L.A.

His name lent cachet to the store, which opened to fanfare in 1947, said Carol Lemlein of the Santa Monica Conservancy.

“The architect was relatively well known at the time, and it was just a very big deal to have a store of that sort in Santa Monica,” Lemlein said after the makeover was announced.

Advertisement

The original Sears logo located in front of the main entrance on Colorado Avenue.

Cesar Villasenor sweeps away dirt around the Sears logo of the vacant Colorado Avenue site. In the foreground are new wave-design concrete pavers to match the existing design.

(Mel Melcon / Los Angeles Times)

The Santa Monica Sears was one of many department stores built in the years immediately after World War II to capitalize on the booming growth of Southern California and the pent-up consumer demand unleashed once the war ended. It was the 10th Sears store in Los Angeles County.

The last two decades have been hard on department stores, however, with shifts in consumers’ tastes for hard goods and shoppers’ ever-growing attraction to buying online.

Giants such as Sears, Macy’s and J.C. Penney Co., which once dominated the retail landscape, have closed hundreds of stores in recent years and the pandemic has hastened the pace of change, analysts say. The Santa Monica Sears closed in April 2017.

Advertisement

Two people on the roof of a building on a sunny day with cranes in the background

Charles Wise, right, senior development manager for Seritage Growth Properties, gives a tour of the Sears store in Santa Monica.

(Mel Melcon / Los Angeles Times)

“We’re seeing 10 years of retail evolution in 10 months,” Bay Area real estate consultant David Greensfelder said, as shoppers retreat from the shared experience of browsing indoor malls and department stores.

Mark 302 may also have a difficult time time attracting stores, said Greensfelder, who is not involved in the project. The building at 302 Colorado Ave. is separated from the Third Street Promenade pedestrian mall and downtown Santa Monica by the hulking Santa Monica Place shopping center.

Exterior of an empty building

Workers put finishing touches on the south side exterior of the Sears store in Santa Monica.

(Mel Melcon / Los Angeles Times)

Advertisement

“There are plenty of other places for retailers to go” in Santa Monica, Greensfelder said, including empty stores ringing the tourist-friendly Promenade.

But the timing for leasing Mark 302’s office space may not be as bad the pandemic-stalled market would suggest.

“They are bringing it to market just as we’re going to have an idea of when we are able to get back,” Greensfelder said.

Indeed, there has been an uptick in the number of companies touring the building in recent weeks, said Mary Rottler, who is in charge of leasing for Seritage.

Advertisement

Efforts to have a COVID-19 vaccine ready to distribute soon are stirring the planning instincts of business operators.

Sun shines through skylights in an empty building

Edelmira Godoy, left, and Blanca Orellana sweep the new top floor of the vacant Sears store in Santa Monica.

(Mel Melcon / Los Angeles Times)

“As vaccines get closer to becoming available, I think people are really beginning to think seriously about their office options,” Lombard said. “We are back to being encouraged that we will be able to find the right tenant for the building,” which has 50,000 square feet of offices to rent.

The pandemic-related slowdown in the office market prompted Seritage to focus on health safety measures in the updated building, such as touchless elevators and a virus-trapping air filtration system, he said. Tenants will have outdoor workspaces and exclusive use of a landscaped roof deck, which has views of the Pacific Ocean, Santa Monica Mountains and downtown Los Angeles.

Advertisement

Rendering shows a walkway through plants and trees in a sunny atrium area of an office building

A rendering shows the planned interior of Mark 302, a former Sears department store in Santa Monica that is being converted to an office and retail complex.

(Neoscape)

The developers converted the building from three stories to four by improving an upstairs mezzanine once used for storing Sears merchandise. The former basement, once served by a loading dock, also will be leased to tenants.

Ground-level windows dating to the 1940s that had been boarded up in recent decades were reopened to help light as many as six restaurants or stores. On the north side of the building will be a 25-foot-tall mural visible from the nearby Metro light rail station.

Seritage hopes to eventually add apartments to what is now the building’s parking lot, but the company has yet to seek city approval for housing.

Advertisement

The New York real estate investment firm acquired 266 Sears and Kmart stores across the country that could potentially be redeveloped. It gained control of the stores in 2015 as part of a $2.7-billion deal that involved leasing most of them back to Sears Holding Corp., which also owns Kmart.

Seritage sold a 50% interest in Mark 302 to Atlanta investment manager Invesco in 2018 in a deal that valued the property at $145 million.

Rendering shows people lounging and gathering on a hip rooftop area

A rendering shows the planned roof deck at Mark 302, the former Sears building in Santa Monica.

(Neoscape)

The two companies are also redeveloping a former Sears in San Diego into a similar complex with offices, stores and restaurants called the Collection at UTC. Offices there have been rented to co-working space provider Industrious. It is expected to open next summer.

Advertisement

Finding tenants for Mark 302 in Santa Monica will be harder than it would have been before the pandemic put a damper on the market, said Santa Monica real estate broker Rafael Padilla of Par Commercial Brokerage.

“What they have done is a beautiful and creative project” that could appeal to tech or entertainment companies, he said. “The problem is more competition than they had before.”

The restaurant business is experiencing hard times, Padilla said, but chefs and entrepreneurial operators will find ways to regroup after the pandemic and come up with new concepts at the local level that Seritage might not have anticipated.

“Maybe they wanted Wolfgang Puck,” he said, “and now they’re going to get Wolfgang Chuck.”

Source: latimes.com

Downsizing Your Home? How I Moved Into An RV From a 2K sqft Home

Downsizing your home can be a big process. And, less and less people seem to be doing it these days.

Downsizing Your Home How I Moved Into An RV From a 2K sqft Home

Downsizing Your Home How I Moved Into An RV From a 2K sqft HomeThe average home size in 1950 was less than 1,000 square feet. Fast forward to 2013, the average home size has increased to nearly 2,600 square feet, according to the U.S. Census Bureau.

We were fairly close to this size when we owned a house. The house we owned in the St. Louis, Missouri area was around 2,500 square feet if you included our finished basement, and it was just for myself, my husband, and our two dogs. Our home in Colorado was almost as big, at slightly over 2,000 square feet (with no basement).

More and more people seem to be purchasing large homes, but that’s not the case for us. We sold our home last year and moved into an RV.

We made this decision for many reasons, but the main reason was that traveling nearly full-time added to the stress of owning a home. So, we figured why not just take it a step further and actually travel full-time?

Related:

So, we did it. We went through all of our possessions, stored certain belongings that we couldn’t part with (we have a VERY small storage unit, the size of a closet, filled mainly with hundreds of photo albums that my dad left me after he passed away, family paintings, childhood mementos, etc.), and moved into our RV.

It wasn’t the easiest task on earth, and really we dreaded all of the work that had to be done. However, we knew it was well worth it to live the life we wanted.

And, it was! We are so glad that we decided to downsize our home. We haven’t regretted the decision one bit, and now we are happier than ever.

There are many other reasons for downsizing your home:

  • To save money. A bigger home can cost more in some cases due to higher utility bills, more clutter being bought, higher insurance, more maintenance and repairs needed, higher purchasing price, etc.
  • To have less clutter. The bigger your home, the more likely you’ll have empty rooms that you feel the need to put stuff in. Now that we live in an RV, we are much more mindful of what we buy. We think about every purchase in terms of weight, size, where we can store it, and more.
  • To spend less time on maintenance and repairs. If all other factors between two homes are the same (age, location, etc.), a bigger home is more likely to take up more of your time due to more things breaking.
  • To spend less time cleaning. A larger home is going to take a lot more time to clean than a smaller one.

Whatever your reason may be for downsizing your home, here are my tips. Of course, certain downsizes may be easier than others, but overall the tips below can help you sort through your items.

Tips for downsizing your home:

Make a plan for downsizing your home.

Downsizing your home can seem like an easy task to some, but in reality it is not. There are many things that go into downsizing your home, such as:

  • The layout and amount of space in your new home.
  • The time you have to downsize your home can impact your sorting process, stress, etc.
  • How you will donate, sell, or throw away items to get rid of.
  • How and what you determine to keep, donate, or throw away.

What do you think you just cannot get rid of?

To start off, you should make a list of all the items you believe you just cannot part with. Your list may start out long, but it will help you decide what items you don’t need and should get rid of.

What can you easily get rid of?

If you have the time, then you may want to start getting rid of things that you know you don’t need as soon as you can. By doing this, you can clear a lot of clutter and it will also help you realize that you may not need other items you once thought you needed.

Usually getting rid of the first few items is the hardest. After that, it gets easier to downsize your home!

Think about why you want to keep certain items.

Many people have a hard time parting with things for reasons such as:

  • Memories
  • How much money they spent on it
  • The length of time that they’ve held onto it
  • The potential for future use

If you just don’t have the room in your new home, you should really dig deep and figure out why you believe you need to keep so many items. Talk about your reasoning with your family or out loud to fully grasp it. Doing so may help you realize how ridiculous your logic may be.

Sometimes, you may laugh at your reasoning, and this may help you get rid of an item more easily.

Find ways to store documents digitally.

For me, I just couldn’t bring myself to store my dad’s photo albums digitally, even though numerous people have told me to scan them and throw them away. The memory is in the actual photo albums as well as the photos, as my dad loved photography and we would often put the photo albums together as a fun project.

However, there are many other non sentimental things that you can store digitally. This includes tax information, receipts, paper documents, and so on.

The average person has thousands of papers that they store!

Paper is a big reason for clutter, and so many people keep items that they don’t need. Go through your documents and start either digitally storing them or recycling them.

We kept just one binder of papers and scanned the rest. It was very easy to do, and getting rid of all of that paper felt amazing.

Give yourself time.

Going through your whole house and downsizing your home in one day would be quite difficult and stressful. Instead, you should give yourself time to really think about what you do and don’t need.

This means that you may want to take a few days, weeks, or even months to go through your home.

Start off room by room and see what you can get rid of. Then, when you are done doing that, go through everything again and again until you are down to the amount of items you need to have. By doing this process, you will clearly see what you need and do not need, because you will be able to see how much you have, evaluate items more clearly, apply past reasoning to other items you think you can’t get rid of, and so on.

Create a donation list.

Donating items makes getting rid of things and downsizing your home a little easier. By knowing that your items will be better used by someone who actually needs them, you are giving your stuff new life! If you have a large amount to donate, many donation centers will even come to your home, which can make getting rid of items a breeze.

Plus, you’ll feel great about it.

Related: 58 Random Acts Of Kindness

Think about when the last time was that you used an item.

Many people keep items that they hardly use or have never used, yet keep and store them anyways.

If you want to start downsizing your home, you should think about the last time you used a specific item.

For me, this is a big reason for why it was so easy to get rid of so many things. I just sat down, created a list, and thought about the last time I used a certain item. For many things, it seemed like years had passed since I had actually used that item. For some things, I knew I didn’t actually need to use them when I thought I did.

So, you should do the same. Think about when you last used an item, if you will ever use it in the future, if you’re better off just renting or borrowing something you occasionally use, and so on.

Related: How To Live On One Income

Get rid of the “maybes.”

If you have no space for items in your new home, but you still have a huge pile of things that you want to take with you, you may want to think about just completely getting rid of your “maybe” pile.

After all, these are “maybes” and you probably don’t want them as badly as you think! This can make downsizing your home much easier in one swoop of a decision.

Related tip: Are you looking to downsize? I recommend checking out the course Downsizing for Tiny Life. This course gives you the step by step process for downsizing to move into a smaller space. This course will help you identify what to get rid of, change your mindset about your stuff, help you sell your stuff, and more.

Carefully evaluate future purchases.

So that you are less likely to have as much clutter in the future, you should evaluate future items before you buy them.

You should think long and hard about whether you truly need something, whether you should buy, borrow, or rent it if you won’t need it in the future, and think about where the item will be stored in your home.

We do this now that we live in an RV. We think about every purchase in terms of weight, size, where we can store it, and more. This has helped prevent us from buying many items because we know it’s not realistic to bring everything into an RV.

How big is your home? Is downsizing your home something you are interested in?

Related Posts

<!–
–>

Source: makingsenseofcents.com

Harry Gesner’s famed Flying Wing house aims for $8 million

Harry Gesner’s name will always be linked to his iconic Wave House, a curvy coastal home that hovers above the ocean in Malibu and served as the inspiration for the Sydney Opera House.

Another of the architect’s most notable works, however, just surfaced for sale across the city in the Hollywood Hills, where the Flying Wing house is up for grabs at $8 million.

Based on the form of a bird, the architectural gem was built by Gesner in the 1970s for Mike Hynes, a lumber mill owner who reportedly wanted the home to showcase his company’s wood. Gesner fulfilled Hynes’ vision, as the hilltop perch employs a structural system of wood poles and features living spaces loaded with lumber.

“It looks like a flying eagle about to take off from the mountains,” said listing agent Jason Oppenheim of Oppenheim Group and Netflix’s “Selling Sunset.”

Advertisement

Forty-five years later, the stunning abode still maintains its original flair thanks to a 2014 remodel by modern architect Dean Larkin. His renovation focused on letting the space take full advantage of the scenic setting, and he added a bevy of windows for better views, including a primary bathroom with pocketing walls of glass so the tub overlooks the city.

In addition, he installed an LED-lighted staircase, an updated entry with a water feature and — because the property lacked a yard — a green space created through a series of retaining walls.

It’s currently owned by the estate of Erick Morillo, a DJ who died earlier this year who produced music under the moniker Reel 2 Real. Morillo, whose hits included “I Like to Move It,” bought the home for $7.6 million in 2014.

Advertisement

The property got another face-lift over the last few months when Oppenheim oversaw some renovations through his concierge service, in which he fronts money needed for updates and is paid back at no interest when the property sells.

Oppenheim said he put more than $100,000 into the property, which saw him treat and stain the exterior wood, replace the lighting, update the audio-visual system, replace grass with turf and add landscaping and an herb garden.

“It’s a win-win because I want to list the property in perfect condition and don’t want any money left on the table,” said Oppenheim, who sold the house to Morillo back in 2014 and said that it remains his favorite house among all the properties he’s sold in his career.

Today, it holds four bedrooms and three bathrooms in about 4,500 square feet. It’s perched on its own promontory lot of about an acre with 300-degree views, parking for six cars and a variety of outdoor spaces. Lawns stretch along the side of the estate, and out back, there’s a spacious patio, dining area, outdoor kitchen and an infinity-edge swimming pool and spa with a recording studio tucked underneath.

Advertisement

The living spaces are sunny concoctions of wood and glass with a few splashes of brick. Highlights include a living room with a wet bar, an indoor-outdoor dining area and a sprawling second-story entertaining deck. An elevator navigates the two-story floor plan.

Source: latimes.com

How We Reached Financial Independence in 3 Years Using Airbnb & Real Estate

Hello! Today, I have a great guest post from Boris and Susan. They purchased their first real estate property in 2017, and became Airbnb hosts. This was a 4-bedroom home that ended up generating them $120,000 in revenue in the first 12 months. They now host close to 10,000 guests per year across all of their properties and do all of this remotely. Below is their story, enjoy!

A foreword given the current state of the world

We wrote this post back in February to describe and share our experience using real estate and Airbnb over the past 3 years to build additional sources of (semi-passive) income. As everyone else, we had no idea that the world would change so dramatically in less than a month after that.

However, although it certainly did change – especially given that the travel and hospitality industry came to a grinding halt and caused a few heartburn-filled weeks – the fundamentals remained valid. 

As we’ll discuss towards the end of the article, we’ve been able to make adjustments and pivot in a way that kept our properties occupied, covering costs, and still generating a profit (albeit a smaller one than usually).

The truth is that if we’re looking at a 3-9 months horizon, things will remain challenging and uncertain. However, this was never a short-term strategy for us, as we try to plan for the next 3-10 years and make decisions based on that sort of a timeline. But first, let’s start in the beginning.

_______________________

Here’s how it all got started as Airbnb hosts.

For many years, real estate was not really on my radar.

I was happily renting, enjoying the flexibility that it offered, and generally thought of real estate in the context of owning your own home – mainly that it limited your options and didn’t really bring too many positives, other than the hassle of maintenance and doing your own lawn every Saturday.

When I met my wife, Susan, on the other hand, she grew up with a completely different mindset.

When she was growing up in China, the common wisdom was that you should always strive to own your own place as soon as you can afford it.

When she moved to the U.S., she maintained the same viewpoint that owning real estate is a key to becoming financially secure.

We’ve met in late 2013 and started dating shortly thereafter. At that time, I was renting while she already had a condo that she was living in and the topic of real estate and financial independence would start to come up with occasional frequency.

In late 2015, we decided to go to Seattle for Susan’s birthday and, as a surprise, I rented a little houseboat on a lake for the weekend on Airbnb. If only we knew what this would have led to!

We enjoyed the weekend on the houseboat so much that when we came back home, we started to throw around the idea of buying a houseboat of our own to rent out to others on Airbnb and occasionally using it ourselves.

Although we went back to our daily routine, we continued to toy around with that idea – although we weren’t quite sure how to proceed.

Then, as it often happens, the situation changed, as Susan decided to move out of her place and we were thinking of moving in together, so we started thinking about the options. During one late evening, I found myself on Craigslist and typed in “liveaboard boat” into the search.

Pretty much the first result was a beautiful, 36′ foot, twin-engine power boat with a description that started with “perfect for a liveaboard”. Complete with 2 (tiny) bedrooms, 2 (tiny) bathrooms, a living room, kitchen and 2 open-air decks, it seemed to offer everything you’d need to be comfortable. 

Best of all, it was half the price of anything else we looked at before at $28,000. Since it was about 30 years old, it was already fully depreciated, so we figured that we’d be able to buy it, use it and then eventually resell it and recoup most of our costs if we took good care of it. 

I went to sleep that evening thinking that this idea, like so many other late-night thoughts that “seem like a good idea at the time”, would go away by morning, but surprisingly it didn’t. Even more surprisingly, when I suggested the idea to Susan of getting that boat and actually living on it, she was intrigued!

Within about two months, we gave up the apartments that we both had, bought the boat, found a marina near downtown that had a slip available, and made it our new home. This began the new phase of our life together.

Related content:

Our Foray Into Semi-Passive Income

Living on a boat was a life-changing experience for us. It certainly wasn’t always easy, but it was incredibly special and beautiful.

We had the best of both worlds. The marina was near downtown, so we got to benefit from convenient access to work and all of the amenities of city-living.

However, our living costs were cut in half, as we no longer had rent to pay (there was still a sizable marina fee, utilities, and many, many maintenance expenses – but it still ended up lower than renting).

We continued to work full-time while living aboard. During that time, we slowly came to a realization that we want to have a bit more freedom and flexibility in our lives. Although we both enjoyed work, we wanted to have the flexibility to do other things later on and not have to rely on a corporate job. Of course, this would all depend on having enough income to pay for it.

Our thought process started to come back to real estate – but this time, it was also complemented by an idea that we thought that we could generate a decent income passively through hosting via Airbnb. 

We’ve used the service numerous times on our own and have even considered renting out the boat when we were away, but we’ve always hesitated making the first jump in it (the marina also did not permit it). 

While we were still considering it, an acquaintance passed me a lead on a property that just came on the market and everything aligned such that we decided to move forward with it and purchase it.

Our start as an Airbnb host

As we acquired the property, we decided to learn everything we possibly could come across about being a successful Airbnb host. As we’re both tech, marketing and spreadsheet-obsessed, we wanted to approach this in a very structured, strategic way.

We wanted to figure out how we can best optimize our occupancy and rates, how we can automate the mundane and repetitive tasks, and how we can deliver an 5-star experience to every guest every time – without necessarily creating a second full-time job for ourselves. 

We learned everything from scratch, from how to best decorate and furnish the rooms to how to hire a reliable housekeeper and streamline those processes. There were a million little things involved but before we knew it, our property was up and running.

To our great surprise, we’ve ended up generating over $7,000 in monthly revenue from it during the first full month.

This blew us away – this was literally my monthly paycheck and yet here, we were able to generate this all on a side. I think at the end of that first month, we already knew that this would be a game-changer.

Michelle’s side note: You can click here to sign up as an Airbnb host.

Taking it to the next level

The experience with the first property was quite insightful. As we continued to run and optimize our first property, we were already thinking about repeating this with another one.

We’ve decided to take what we learned and do it again elsewhere. After some consideration, we determined that we should look in other cities. This was in part driven by the fact that real estate prices were much more affordable elsewhere, as well as the idea that we actually wanted to spread our risk a bit better.

We figured that if we’re going to approach this with a goal of automation and scale, it wouldn’t make a difference if it was a 2-hour drive or a 2-hour flight from us.

Within the next three years, we proceeded to acquire another 5 properties in cities around the U.S. that we now run as short-term rentals. 

Between them all, we’re now on track to host 10,000 guests per year, while doing it entirely remotely – living hundreds and sometimes thousands of miles away from our cities. 

For us, doing short-term rentals became one of the key components of our investment strategy. And we’d love to share a bit of our approach, so it could hopefully be helpful to you as well.

Our hosting strategy before the pandemic:

Each time we considered a new city, we started with thinking about the hosting strategy itself. Every market is a bit different and the property should cater to the types of visitors that come there. We generally like cities and urban areas – especially those that have large universities, hospitals, or large companies based there. 

This typically means that there are a large number of people coming and going there all the time – not just on weekends.

Other people will find success in more traditional vacation markets or in their own backyard.The truth is that there is demand for short-term accommodations nearly everywhere, so it’s a bit of your personal decision what you want to focus on.

As far as our strategy goes,  at least before the pandemic happened, we prefer to rent out the properties that we have by the bedroom. Contrary to expectations, it actually tends to be less work than doing full-house rentals because people tend to leave less of a mess and be more respectful of the space if they are sharing it with others.

We also generally find that at the right price point, people don’t mind the fact that the common areas and bathrooms are shared. After all, they are paying a fraction of what they’d pay at a hotel.

At the same time, we also find that there is a premium on a larger space on the weekends when groups travel. For groups, renting a 3-4 bedroom house is much more convenient than renting multiple hotel rooms – so they are willing to pay a premium for that.

As such, we rent out the full house as a single listing on the weekends and then rent out the bedrooms – individually – during the week.

From the revenue perspective, this will help keep occupancy high and will ensure that the property is not sitting empty during the week. We generally see occupancy rates of 90%+ across all of our properties when we follow this approach.

Our first step was to really nail down our processes. If you simply launch and proceed to handle everything manually, it can quickly become overwhelming to manage it – especially if you’re running multiple properties. You’d essentially create a full-time, 24/7 job for yourself.

Fundamentally, there are several key areas of running a short-term rental business: 

  • Guest communication, 
  • Check ins and check outs,
  • Housekeeping, and 
  • Price optimization. 

Fortunately, we can now benefit from a plethora of 3rd party tools that exist on the market that can automate 95% of our work in a really simple way. Here’s how we approached it:

  • Guest Communication – typically the most time consuming process is guest communication and sending instructions. This includes details on how to check-in, how to use everything inside the house, how to check-out, and so on. Fortunately, we can solve this by using a tool like Smartbnb.io. This nifty service allows us to automate all of the check-in and check-out communication for your guests, as well as automatically send out responses to the most common questions.
  • Automated Check In and Check Out – we utilize keyless, digital locks that enable us to create a code for every guest when they check in. These locks can expire the code when the guests check out and generate new ones for every guest, if desired. This makes it very easy the coming and going of the guests.
  • Housekeeping – we typically invest quite a bit of time in finding, vetting and training a local housekeeper. That individual is quite important to the overall success, as they have a large impact on guest satisfaction (it has to be clean and neat every single time), as well as our ability to manage multiple properties remotely (they have to show up on time, every time).
  • Price Management – There’s a reason why hotels, airlines, and other industries adjust their pricing regularly depending on the demand, time of year, and a myriad of other factors. This is where technology comes in again. There are a couple of tools available on the market, such as PriceLabs, BeyondPricing, and UseWheelhouse that help Airbnb hosts with price management. They monitor the demand, competition, and occupancy of your listings and those of your competitors and automatically adjusts pricing for every single one of your listings every single day. You can set a strategy that you prefer and it will make the adjustments that help you get there.

Hosting strategy adjustments during and after the pandemic:

The reality is that the crisis had an effect on all types of real estate investors – both with long-term and short-term rentals. 

Arguably, for investors with long-term rentals, the situation was also quite difficult. If the tenants are unable or unwilling to pay rent, the tools you have at your disposal are limited. 

Short-term rentals are a bit different. Firstly, it’s worth highlighting that for short-term rentals, the impact was quick and significant – but not evenly spread. 

As properties in urban areas saw their occupancy decline overnight, there was actually an increase in demand for more remote, drive-to accommodations as people looked to book them for several weeks or months at a time to isolate themselves.

If you owned property like that, you have likely seen a small dip in demand when the country initially shut down followed by an increase in longer-term bookings. So traditional vacation rentals actually fared OK – and will likely continue to do well as people likely switch to more domestic travel for the foreseeable future. 

However many others, including ourselves, have properties in urban areas who don’t necessarily cater to the leisure traveler. As such, our demand dried up and did not necessarily recover on its own right away.

As the pandemic situation began to unfold in March 2020, most hosts had to figure out how to deal with the new reality. The objective for most was simple — in the short-term, cover all of your holding costs  (mortgage, interest, insurance, property taxes) and hold on until the situation begins to improve.

Taking Action

As the situation continued, we took a number of immediate steps:

  • Increased the maximum duration that guests can stay from 5 nights (our regular limit) to 90 nights to encourage longer-term stays while also giving us flexibility to go back to regular short-term rentals when things begin to improve.
  • Tweaked the pricing to offer discounts for multi-week or monthly stays.
  • Begun to explore additional channels outside of Airbnb, such as FurnishedFinder.com – which is a popular site for connecting with travelling nurses who are looking for temporary accommodations during their assignments.
  • Implemented and highlighted more intensive cleaning and sanitizing procedures throughout all of the properties.

What happened as a result is that we’ve quickly begun to fill up our listings with people who were looking for accommodations for 2 to 4 weeks or a bit longer. 

Some guests are medical professionals. Others are students who have been kicked out of their dorms. A number were airline employees who were caught in limbo between cities. 

Although the tourist and business travel market dried up, there were no shortage of people that have been displaced suddenly that needed a place to stay that was furnished, flexible and reasonably priced. 

And then there are quite a few people who were local who looked to isolate themselves for one reason or another and just needed a safe, affordable place to stay for a couple of weeks.

Although the RevPAR (Revenue Per Available Room) went down quite a bit with these reservations, it was still a bit higher than with traditional long-term rentals and allowed us fill in our listings quickly.

As a result, our occupancy across all of the properties remained at above 90% through March and April and is on track to do the same in May. Between all of the properties, we’re able to stay above break even point even during the worst of it.

Support Your Team

We’ve provided our housekeepers in different cities with additional directions on how to sanitize the property daily and highlighted this in the listings to let the prospective guests know what’s being done.

We’ve also communicated to our housekeepers that we’ll continue to support them through this and instituted a floor pay. Whereas before, their pay was typically dependent on the number of turnovers or days worked, we’ve let them know that even as we have more longer term stays that reduce the need for daily turnovers, they’ll continue to get a fixed pay throughout this entire crises that’s about 80% of the regular amount.

This was key because these relationships are vital to the long-term success and the people on the other end are the most vulnerable to the crisis.

So while it may be tempting to cut their work as booking revenue comes down, I think it’s wise to provide everyone with stability until things begin to return to normal — if you expect to continue to operate in the short-term rental space.

What’s next?

It is our opinion that the consequences of this crisis will be felt for some time to come. Regardless of whether the government “lifts the lockdowns”, people will be hesitant to travel until the vaccine is widely available and adopted.

I think that under the best of circumstances, we’re looking at a year or so until this is more under control.

In the meantime, we’re likely to see economic pain continue to depress the hospitality industry and the real estate market.

That said, for folks investing in real estate, it represents an opportunity not seen since the financial crisis over a decade ago:

  • For one, real estate prices have been unsustainably high to the point where in many markets, it is nearly impossible to buy and cashflow a small multi-family property. Yes, short-term rentals made it possible to be profitable, but ideally, any multi-family property should also be underwritten to work as a long-term rental so you have a backup plan. For better or for worse, I think we’re going to see a significant impact on the real estate market in the coming months as the sellers begin to be more anxious to get cash out of the market and the buyers are more hesitant with using their depleted cash reserves.
  • We’ll likely see a significant number of short-term rental properties shut down or be converted to long-term options. Many existing hosts who were not able to adjust may decide that they don’t want to deal with it anymore and simply convert their listings to long-term rentals.

Paradoxically, this may actually lower the pricing on long-term rentals, as more inventory will come online. On the flip side, the lowered supply of short-term rentals may actually increase the average daily rates for the short-term rentals that remain on the market.

Personally, since the beginning, we’ve loved the idea of using real estate as a means towards getting to financial security. This hasn’t changed today.

What has changed is how we underwrite any new purchase, what sort of a discount we’d be looking for to offset the uncertainty, and the ability of a property to be able to function both as a short-term, mid-term and long-term rentals and remain profitable even if the revenue is depressed.

We’re also not in a rush – there’s no reason to be. While we may see some opportunities come up in the next few weeks, we will likely wait towards the second half of the year before beginning any additional acquisitions.

Then, we’ll likely expand beyond just urban markets to also focus more on traditional vacation markets. Especially over the next few years, we expect that people will remain hesitant about traveling abroad for their leisure and instead will seek out places they can go to domestically with their families for vacations.

We remain bullish on short-term rentals as a long-term investment strategy and will be spending the next few months on research, analysis and forming the strategy, so we can get everything in order for when we are ready to act.

To sum it up, once everything settles down, for those that are prepared, there will undoubtedly be significant opportunities to explore and act on.

Are you interested in buying real estate to rent out? What about becoming an Airbnb host?

About Boris & Susan

Boris & Susan are experienced Airbnb hosts and real estate investors hosting close to 10,000 guests per year around the country and managing their properties remotely while working full-time.

They write more about their experience, as well as help other people acquire, launch and automate their short-term rental properties at www.BuildYourBnb.com. Drop by to say hello or email them at [email protected] with any questions you may have!

Related Posts

<!–
–>

Source: makingsenseofcents.com

TV’s Ty Pennington flips Venice charmer onto the market

Ty Pennington, the Emmy-winning host behind “Extreme Makeover: Home Edition,” is offering up a house of his own. His remodeled spot in Venice just came to market for $2.8 million.

He stands to make a big profit if he gets his price. Records show he bought the property for $1.11 million in 2004.

Pennington, a longtime carpenter who found fame on the home improvement show “Trading Spaces,” put plenty of work into the house during his 16-year stay. Once a drab shade of tan both inside and out, the two-story home now boasts a bright blue exterior and crisp white interiors.

Advertisement

Inside, he added bamboo floors in the living spaces, concrete countertops in the kitchen and a wraparound porch lined with porcelain tile. In the primary suite — one of three bedrooms — there’s an antique cast-iron tub.

Billed as a “contemporary Craftsman,” the 2,100-square-foot floor plan also features a living room with a decorative fireplace and a sunken family room overlooking the backyard — a landscaped space complete with a dining patio and koi pond.

Pennington, 56, won two Primetime Emmys for “Extreme Makeover: Home Edition,” which ran from 2003 to 2012. In the years since, his other hosting gigs have included “The Revolution,” “On the Menu” and “American Diner Revival.”

Patrice Meepos of Compass holds the listing.

Source: latimes.com

Encino compound with Jackson 5 ties sells for $3.45 million

Selling this Encino home was as easy as ABC. The Hamptons-style compound, which was once owned by Marlon Jackson of Jackson 5 fame, has sold for $3.45 million, finding a buyer just two days after relisting.

The deal closed a few weeks after Michael Jackson’s famous Neverland Ranch sold to billionaire Ron Burkle for $22 million. It’s no Neverland, or even Hayvenhurst — the Encino home where the entire Jackson clan lived in the ’70s — but it still boasts a unique place in the family’s lore.

Records show Jackson sold it for $1.16 million in 1992, but in previous years, the family used it as a recording studio, according to listing agent Carl Gambino of Compass. This time around, it was sold by Demian Lichtenstein, the director behind the 2001 black comedy “3000 Miles to Graceland.”

Advertisement

The estate spans just over an acre and fits in as many structures and amenities as possible including a 6,700-square-foot main home, three-story guesthouse, swimming pool, spa and lighted tennis court.

A gated 300-foot driveway approaches the Cape Cod-style home complete with a chef’s kitchen under custom lights, voluminous living room, wet bar and staircase lined with wrought iron. It holds four bedrooms, and the guesthouse adds two more and an office.

Upstairs, the primary suite expands to a marble bathroom and private terrace. It overlooks the entertainer’s backyard filled with covered lounges and dining patios.

Jackson, 63, rose to fame as a member of the Jackson 5 with hits such as “ABC,” “I’ll Be There” and “I Want You Back.” He was inducted into the Rock and Roll Hall of Fame as a member of the group in 1997 and also released a solo album titled “Baby Tonight.”

Advertisement

Gambino handled both ends of the deal.

Source: latimes.com

Dwyane Wade and Gabrielle Union trim Sherman Oaks mansion to $6 million

Power couple Dwyane Wade and Gabrielle Union are still shooting for a sale in Sherman Oaks, cutting the price of their Mediterranean-style mansion to $6 million. That’s the same price they paid in 2018, records show.

The pair upgraded homes in a major way last year, shelling out $17.9 million for a 17,000-square-foot showplace in Hidden Hills nestled between properties owned by DeMar Derozan and Kylie Jenner. About a month later, they listed the Sherman Oaks property for $6.2 million.

Accessed by a private road, the leafy estate spans three-quarters of an acre and centers on an 8,650-square-foot house built in 2017. Outside, there’s an infinity pool with sweeping canyon views, an outdoor kitchen with a pizza oven and a wraparound balcony.

Advertisement

French doors and walls of windows brighten the living spaces, which revolve around a striking architectural staircase that swirls at the center of the three-story floor plan. For amenities, there’s a movie theater, a wine cellar and an elevator.

Elsewhere are five bedrooms and 8.5 bathrooms, including a primary suite with a pocketing wall of glass and remodeled bathroom.

Wade, 38, is a former professional basketball player who played 16 years in the NBA, making 13 all-star teams. As a member of the Miami Heat, he won three NBA titles and was the league scoring champion in 2009. He retired following the 2019 season.

Union, 48, is an actress known for her film roles in “Love & Basketball,” “Bad Boys II” and “Bring It On.” More recently, she appeared on the television series “Being Mary Jane” and “L.A.’s Finest.”

Advertisement

Anna Marie Simpliciano of Hilton & Hyland and Althea Bowman of B&B Investments hold the listing.

Source: latimes.com