All Forum Posts by: David M Trapani

Unless it's a major city with a huge draw (i.e. San Francisco), I avoid HOA and gated communities for Airbnb purposes. Why? They tend to have C, C & R's that strictly limit or prevent Airbnb. Or, they can change the rules mid-stream. It's enough to deal with applicable City, County or State Airbnb regs without adding HOA rules to the mix. That said, HOA condos and townhomes can serve as awesome foundation for general real estate investment.

Excellent option. Have your agent scout out "free & clear" properties in your target market. Start writing offers. Avoid pre-pay penalties. Buy & hold or advance when ready by hypothecating ("walking the note") to acquire new and different properties. Amazing opportunities and doors will open. Highly recommend as another tool along with conventional finance, all-cash purchases, lease with option to buy, etc. 

Tom, 

Thanks for raising this
topic. Fascinating and little known financing technique. Used it successfully some 6-7 times to acquire single family homes in and around various states. Working with private lenders - two of whom I met when they carried the first mortgage on properties purchased from them. Amazing opportunities when you have someone who understands capital gains taxes or how to defer them (as the lender) and the flexibility & power behind hypothecation or “walking the note” to finance acquisition of various real estate assets (as the borrower).

Might be fun to compare notes offline sometime.

Cheers & have a great week,

David

Hi Michelle!

As Mark mentions, LQ is not issuing any new STR permits. Existing are grandfathered. Doing very well far exceeding mortgage costs on existing LQ STR. As John said, Cat City is a no go. I'd avoid Palm Desert or any gated communities or HOA's. My advice, although it'll cost more (but worth it) - Palm Springs. Palm Springs doing very well & better than existing LQ STR. Yes, my experience has been 10% down for "second home", 20% for investment or if owner occupied you might get lower than 10% down. Cheers & best wishes.

Umbrella policy. LLC is often frowned upon (or complicated by) lenders, title companies and also cities (municipalities) who regulate STR's. Umbrella policy keeps it simple.

Some of my current favorites -

Palm Springs, CA

Franklin, TN

Smoky Mountains, TN (Pigeon Forge, Sevierville, Gatlinburg)

Clarksville, TN

Sacramento, CA

San Francisco, CA

Beautiful! Love your story!!!

Excellent work! How much did you put into it?

PS - Cap rates vary, but I would say try for at least 4.5% up to say around 6.5%. Your commercial broker will assist you with the types of questions to ask and should be able to guide your search based on your parameters. 

Hi Carrie,

Good questions. Made a similar transition nearly 4 years ago. One of the best things I've ever done. Started with one NNN QSR, now have 3 in 3 different states. In contract now to acquire my 4th.

How to get there? Find yourself a seasoned commercial real estate broker to assist your search for suitable properties and with your financing. Use the websites such as Loopnet to search on your own for properties in your price range. Share that info with your broker. If you will be using existing assets or equities, form a relationship with a seasoned 1031 tax-free exchange specialist. Read every book and forum post and any information you can get your hands on regarding NNN investing analyzing, acquiring, financing, managing, trading etc.

Hope this helps. Have a great weekend!