All Forum Posts by: Beth Crosby

I can see him waving the builder fee and providing free PM services as valuable. I would have this in a contract that he provides the PM service for 15 years, whether he does the PM or pays for it out of his profits.

You will do the best by not taking on a partner and negotiatiating a preferred rate for building all of the STR houses and self managing.

Yes I'm very much getting that. I should probably try to do this on my own, so I'm leaning in that direction. I appreciate everyone's input. It's really causing me to think and pause on taking on a partner. Thank you John !

1 Vote

West Gulfport, Mississippi

Quote from @Michael Baum:

Erp...Evolve..oh well.

So there is a few issue here I think. I never agree with appreciation as a reason for a poor performing STR.

It sounds like you have a plan and are going forward so I wish you the best of luck.

I most definitely don't have an plan, nor am I for sure going forward. I'm honestly just trying to figure all of this out. And relying on my fellow investors for some wise advice. I very much appreciate your candid honesty! After hearing, everyone's thoughts, I believe I am going to do this on my own. So thank you! I will just pay his builder fee and continue with my own management. I saw your comment about evolve. I didn't think 10% was a lot for them to do all the scheduling and advertising? What is the "ERP" ? Please tell me if there is a better way? Self managing I think would be a lot for me with what I'm hoping to be three or four properties.

I most definitely don't have an exact plan, nor am I for sure going forward. I'm honestly just trying to figure all of this out. And relying on my fellow investors for some wise advice. I very much appreciate your candid honesty! After hearing, everyone's thoughts, I believe I am going to do this on my own. So thank you! I will just pay his builder fee and continue with my own management. I saw your comment about evolve. I didn't think 10% was a lot for them to do all the scheduling and advertising? So far January and February I've been pretty much fully booked, with exception to my owner blocks.What is the "ERP" ? Please tell me if there is a better way? Self managing I think would be a lot for me with what I'm hoping to be three or four properties. But again, I'm open to hearing other suggestions please :-)

0 Votes

West Gulfport, Mississippi

Quote from @Kate Stoermer:

I have a contact that is sort of like your builder - he manages the build, then he manages the property as well. He puts the deal together. Essentially, his partner (you, in that scenario) are providing the bank roll and you get interest and owner ship. I'll echo the idea I don't think its balanced as your propose it; you own the land and are already more involved than just as an "investor" it doesn't feel like a balance. You could just hire him to build; the PM piece shouldn't be tied to the JV - they get the business if they do a good job and it should be equitable fee's for the area. Good luck!

Yes, I hear what everyone is saying for sure about it not being a good deal in my favor, but I'm just trying to make it a good deal for me as well as my builder. trying to find a scenario that would be beneficial for myself. Really not even sure what he's asking, as far as interest in the deal. I just feel like having the 40,000 taken off of the bill, so to speak, would allow me for one, and then the property management aspect, taking that off my plate as well. And that could be worked in the deal somehow.

0 Votes

West Gulfport, Mississippi

Quote from @Michael Baum:

I am with @John Underwood on this. I don't see a ton of upside for you on this deal.

I would not involve anyone as a partner. Just slow your roll a bit. If you have the ability to do one, then do one. Wait a year or 2 then do the next.

I also agree with @Brett Deas on the 25%. He is making $$$ on the front end and then the back end as well. That management fee will kill your profitability.

Are you self managing the first STR now @Beth Crosby?

Hey Michael, thank you for your response. The problem was slowing. My role is my age :-) I'm really trying to build as much appreciation in the next 10 to 15 years as possible. the 25% management fee would be waived. So basically he would waive his builders fee so that would be $40,000 as well as the 25% fee and they would do all the day today Management.

I use evolve for my current short term rental, and so far it has gone very well. They take 10%.

0 Votes

West Gulfport, Mississippi

Quote from @John Underwood:

So will the builder waive his fees?

I don't see the huge value to you since you have the land and the money.

Yes, I was thinking that he would waive his builder fee and the 25% fee for management. So basically I would pay nothing for the builder fee and pay nothing for the short term rental management. I just wouldn't know how to work the terms with what he brings to the table. any input you may have is appreciated for planning purposes of he and I's meeting.

0 Votes

West Gulfport, Mississippi

Quote from @Brett Deas:

Interesting spot you are in. I would first ask myself 'Who is bringing the value to the partnership?'. From what information you have given, it sounds like you are bringing the value (the lots/money), and the partner is replaceable (you can always find another builder & management company).

As far a splits go, normal people just do 50-50, but if you are taking on the risk/liability I would demand a higher %. Especially if you are going to be paying 25% to a management company, it seems like they are getting a better deal than you are.

Hope this all helps, if you have any questions feel free to message me.

Hey Brett, thank you for the input! I will definitely message you if I have further questions.

0 Votes

West Gulfport, Mississippi

I'm going to try to keep the short so, if I miss any details because of the shortness, please let me know.

I own 5 lots on the Gulf Coast of Mississippi. 3 are empty , 1 has a home and is a STR (does very well), the last lot I am at the end of a ground up build and will be using for my primary residence. Ive funded the ground up build of my primary with a cash out refi from the one that I use as a STR. SO the New build Primary will be "free and clear".

The other three lots I would like to continue to build STR's. I have cash set aside for a downpayment for the 1st of the 3 lots to build on. The remaining 2, I will likely get a HELOC or cash out refi to pay for downpayments on those from the "fee and clear" new build promary.

Our builder, who we have become very good friends with, is interested in partnering with us on the 3 remaining STR builds. We haven't discussed how it will look yet. I'm just trying to have some things in my head for when we do meet. At this point i believe I will be the financial part of the deal, I will handle the DP and the mortgage/HML, he would handle the build (his fee is about 40K) and he has a rental management company as well, and they charge 25% management fee.

Just for reference, I am a 60-year-old woman. I don't anticipate having rentals for more than 15 years given my age. So I am looking for appreciation value for retirement. I have had the one STR for only 3 months so far. It has cash flow of only about $200-$300.00 a month right now, however May-October I expect cash flow mo. to be about $900.00-$1200 mo. this is just based on AirDNA which we know is not very accurate.

Again, im looking for any scenarios that you all could come up with for me that I could present to my builder/friend, that would be equitable for both of us if we entereed a partnership or JV.

Thak you in advance!

Beth

0 Votes

West Gulfport, Mississippi

Oh thats awesome advice Susan.. Can I DM you ?

0 Votes

West Gulfport, Mississippi

AWESOME! Thanks Justin! I will be there!

0 Votes

West Gulfport, Mississippi

Thanks so much Julio!

0 Votes

West Gulfport, Mississippi

All Forum Posts by: Beth Crosby

Beth Crosby has started 3 posts and replied 25 times.

Post: Need some suggestions- STR Joint Venture

Post: Need some suggestions- STR Joint Venture

Post: Need some suggestions- STR Joint Venture

Post: Need some suggestions- STR Joint Venture

Post: Need some suggestions- STR Joint Venture

Post: Need some suggestions- STR Joint Venture

Post: Need some suggestions- STR Joint Venture

Post: NEWBIE Needs help :)

Post: NEWBIE Needs help :)

Post: NEWBIE Needs help :)