All Forum Posts by: Kevin C.

We have our taxes done by a CPA and have been deducting interest on a second home (as in vacation home or call it whatever you want) mortgage for a few years now.

Wall was just completed.  Took just under two weeks start to finish. 

First contractor came in and set all the anchors (steel rods spaced 6' apart, minimum 5' into rock, 3 rods every 6', one into creek bed, two into creek wall) and installed steel mesh and chimney drains, that took a little over a week. 

Shotcrete contractor came out next day after all the steel was done and had all the shotcrete done that day.

Established VRBO property in area that caters to that market.

Owners manage the unit long distance. They own 3 vacation rentals in the area and self manage them all. I'm working with a local agent that has this as a pocket listing. Per listing agent, owners are selling this property in order to buyer a larger unit (more bedrooms). Listing agent specializes in vacation rentals and has contacts for cleaning and maintenance personnel. All yard maintenance is included in HOA to include shrubbery / tree trimming, snow removal, mulching etc.

It's a 4 Bed, 3 Bath unit, no garage just a parking slab (common for area), built in 2007, fully furnished, ask in $269.9K.   Walking distance to Table Rock Lake, short drive to all Branson area attractions.

Stated revenues per owners Sched E

2012 - $30K

2013 - $34K

Gross revenues do not include cleaning charges or taxes that are billed directly to guests.

On their Sched E the unit showed a loss of $1,600 in 2013, that's taking into account almost $9K in depreciation and a little over $3K in travel expenses (owners like the area and travel there quite often, writing off their expenses across the three properties they own there).

Any insight on how this looks from those that currently own or manage VRBO's would be appreciated.

Thanks,

Kevin

Edit to add: owners show $10K interest paid for 2013, so this is a financed unit for them.

This is a follow up post to a post I made almost 5 years ago about my first two investment properties, you can read that thread here:

http://www.biggerpockets.com/forums/223/topics/484...

I still have both those properties.

One my daughter and a friend are in right now.  She's in college and the house is close to where she goes to school, so it works well for her.   It's currently a loser rent wise, my choice though.  Market rent on that house is now in the $1700 range.  

The other house has had an excellent tenant in it that is in their 4th year.  She's currently paying $1455, and her rent goes to $1495 in July.   She's under market and I'm OK with it since she has been an absolute model tenant.

Both homes are now worth in the $200K range and both have market rents in the $1700+ range.   I wouldn't buy them today, way too much for the rent they bring in, but I'm in one @ $168K, the other @ $155K, so I'm OK with them both.  Payments on each of these houses are right at $470 a month.

I self manage, so no PM expenses.

Just thought I'd share to show that absolutely horrible investment choices (before I knew about BP) can work out in the end providing you have the stomach and funds to weather the storms.   Both of those houses have been trashed at least once by family and/or by regular tenants.   I've leaned a lot, I've dealt with a lot, but never gave up.  Both properties, while not ideal investments by any stretch, are now in position to cash flow quite nicely.

The hardest thing was getting off the fence.  I got off the fence, took my lumps - paid my dues I guess you could say.   

These properties were just awful investments, but they got me in the game and that's what really counts.   With what I've learned in the process, and all the wealth of knowledge available here on BP, I'm in a great position going forward.

Congratulations Glenn!

Total all in cost should be in the low 20's.

I've got it all in order now.  Have permit in hand from City for the work and have signed off with the steel guys giving them the go-ahead for the work.

Had to submit an engineer's drawing and statement that what I'm doing will have no impact on downstream properties.  Upstream will not be impacted since we will not be changing the course of the water nor restricting it, the wall we'll be putting up will follow the contour of the existing creek wall.

One company will be doing the steel work, setting the anchors into the creek bed and creek wall and installing all the steel mesh.  Second company will then come out and do the shotcrete.

I've already had several dead/dying trees removed from the creek wall to get it ready for the steel work.

We're tentatively scheduled to get started with the steel after the holidays, so early January.

I include appliances, but it states in the lease that they are only warranted for 30 days, after that, tenant is responsible for any repairs.

I've had a tenant replace both the washer and dryer with her own due to the ones supplied needing repair.  Tenant has been in the house for 3+ years.

When the appliances broke, I could have picked them up, but elected to just have them hauled off when the new ones ordered by the tenant were installed.  It just wasn't worth the bother to me to pick-up, then fix and/or store them.

I think it may help when leasing the house that it has the appliances, but at the same time, I don't want to be on the hook when one breaks down.  The 30 day warranty shows they are are in working order when tenant moves in, after that 30 day window, I'm off the hook.

If I wanted to keep the tenant, I'd spread it out over at least 3 years, if I didn't care if they moved or not, 2 years, if I rather they moved anyway - all at once.

Personally, for a long term tenant that has been easy to deal with, and has taken care of the house, I'm OK with rent sliding below market over time.

I have a tenant now that is in her 4th year, and last year was the first time I raised her rent.  She keeps the house immaculate and has never been a bother.   She's at least $150 under market, maybe $250, but I'm OK with it because she has been such a super tenant.  She is set to increase again next year, about 3%, but she'll still be under market.

When she moves I'll bring the place up to market, but until then, I'll enjoy no vacancies, a well kept house and a model tenant.  For a tenant of that caliber, being a little under market is fine by me - we both win.

I use Chase's Quick Pay as well - can't beat free.