You may be interested in passively investing in STRs but a little hesitant about sinking your money into a company that likely operates in a different state. On top of that, you will likely never see the properties that the business manages unless you visit them. How, then, can you jump on the very real passive investment opportunities in STRs and feel confident about the company itself? The co-founders of Techvestor, COO Sabrina Guler and CEO Sief Khafagi, understand your concerns. Techvestor, for those new to STR investments, owns the largest portfolio of STRs in the United States. Its proprietary rental platform analyzes over 18MM data points each month to identify what, where, how, when, and if an investment should occur. The results include 100k properties underwritten monthly, over $37MM raised, and 75+ properties in the Techvestor portfolio. Guler and Khafagi took time out from their busy schedules to talk about passive investing and the reasons why Techvestor has cornered the STR market.
“Passive investing is everywhere these days. In fact, it’s so prevalent that it can be hard for individuals to identify legitimate opportunities, including in STRs,” says Guler. “The first thing to do is to look at the people behind the company. They should have the right experience to handle your investment. Techvestor wouldn’t be as strong as it is today if Sief and I hadn’t been successful independent investors in STRs before starting our company. That taught us to identify great properties, renovate them, list them, and manage them.”
Khafagi recommends that before you passively invest in STRs, you make certain the company has a strong program from start to finish. “A passive investor should not have to lift a finger to make an asset generate consistent revenue,” he believes. “The company should be able to source the property, design it, and manage it all on its own. That includes competently handling every inevitable hurdle that comes along.”
Khafagi explains that before buying their first STR, he and Guler created a realistic framework for Techvestor so that everything could be handled independently of investors. They designed software that pinpoints the right properties for Techvestor’s portfolio, meaning they know what to buy, where to buy it, how to best finance it, how to operate it, if the property is in a sustainable market, and what realistic growth looks like.
“We also designed a 16-point strategy for analyzing the potential of both a property and its location,” Guler continues. “We look at everything: uniqueness, seasonality, tax benefits, diversification, and STR-friendly states, among other crucial factors. All in all, we analyze millions of data points and 250+ markets monthly.”
That’s at the office, of course. On site, Techvestor’s project managers draw upon a local network of contractors and professionals to transform homes from ordinary to spectacular. Khafagi adds that they are careful to add amenities that will give the property longevity in a saturated market, including hot tubs, fire pits, and other perks.
“So, yes, we have set Techvestor up for passive investors, but at the same time, we believe in transparency so that they can know how their investment is doing,” says Khafagi. “That’s why we are careful to explain all of the terms before onboarding an investor and to keep them up to date as time goes by.”
Passive investors in Techvestor receive 100% of tax benefits, have zero liability for loans and lending, and have instant diversification with over 75+ properties. During the first five years that Techvestor holds a property, investors receive quarterly reporting and dividends, and the company targets a 7-12% cash on cash annually. After the projected hold period, Techvestor looks to sell the portfolio based on revenue or value, whichever is higher.
“As a passive investor, you want to make sure the company is healthy across the board,” says Khafagi. “Additionally, you want to be certain the market itself supports investments. 34% of people prefer short-term rentals, up from 10% in 2011. People are also interested in STRs because of the culture change to remote work. It has created a new asset class that Techvestor is defining.”
Guler and Khafagi both agree that passive investors should feel comfortable approaching a company’s leadership with all of their questions at any time. “At Techvestor, we prioritize transparency and open communication,” Guler says. “It is the clearest road to success for us and our investors and leads to long-lasting relationships for years to come.”
Techvestor is the leader in passive investments in STRs in the United States. It was co-founded by Sabrina Guler, a former Engineering Project Manager at Apple, and Sief Khafagi, who worked at Facebook/Meta and was a Forbes Business and Young Entrepreneur Council Member. Guler and Khafagi have grown Techvestor’s portfolio to encompass STRs across the United States, resulting in seven and eight figures in commitments and LOIs. In 2023, Techvestor will continue to expand, listing more properties in Southern Florida and other hot markets. For more information, please see www.techvestor.com.