All Forum Posts by: Eric A.

Michael, apparently Expedia is exploring options to spin off HomeAway. Nothing imminent but exploring options. I’m sure Airbnb offered a dirt cheap price. HomeAway was terribly run from the get go and now the warts and hairs are becoming evident. 

Airbnb handles all the taxes to municipalities depending on your locale which is a huge deal. It appears Airbnb is in talks to buy HomeAway (parent company of VRBO, HomeAway, vacation rentals.com) in the near future. If that happens you will see a much better run organization.

@Lisa Graesser if you are renting through Air BnB you are paying double the taxes. If you notice the state is not enforcing the guidelines or penalizing people because they are making money hand over fist from Air BnB which they never thought they could regulate. It will be interesting.

@Elisha Cram I own vacation rentals in Maine and you have been given so much bad information it’s mind boggling. Send me a PM and I can help you out.

I would immediately find a wealthy mentor and ask them what they think. In my life I never got financial advice from people who are not wealthy. When I sit down with wealthy mentors I have never once heard them talk about a leased car or an owned car. Raise your sights and you won’t waste your time with these crazy conversations. Just my two cents.

I think people get very caught up in minutia that doesn’t need to occur. If it’s 3 people looking to buy a piece of real estate and it’s only one property then all the gyrations with an LLC and possible 1031 is a waste of time. If you are purchasing with a bank mortgage someone personally will need to sign for the loan, unless you have a long standing bank relationship and have done this before. If it’s a private lender there will obviously be more flexibility. I would spend time with someone who has actually performed several of these transactions and have them mentor you. It seems like you have done some research, which is great, but I never met a book at the closing. Book info vs real life is very different. Good luck and I wish you the best!

Sorry about the realtor comment. You caught me at a time when I’ve had a realtor almost screw up a deal. If the owner is elderly and out of town they most likely will take the realtor’s direction. It sounds like they may have some prior experience which is great. Seeing it’s a condo I would do your due diligence on assessments, repairs, property tax increase when purchased, etc. Personally, I don’t have any condos any more but that’s me. Sounds like you could put together a heck of a deal. If you get it make sure you have right of first refusal to purchase the note. You will make so much money over your career with that simple clause.

The next thing you do is start asking questions. Are you talking to the owner directly? If you are going through a realtor ask to sit down with the realtor and the owner. 99 out of 100 realtors have no idea about financing or terms. I actually had a moron tell the seller that they had to have a down payment, it was a government law. Complete idiot! Following questions to the owner: 1. How much monthly are you looking to receive for your equity? Not lend you!!! They are not lending you a dime, big difference! 2. Once they have thrown out some terms, do a quick analysis, and if it’s a steal write up the contract. If not, ask to go over everything and get back to them. If they can’t sell it now it’s not going any where fast. 3. Owners who have not done owner financing before focus on the price. Who cares what the price is. What if the property was worth $400,000 and you agreed to buy it for $600,000 at $2,000 per month for 300 months with nothing down and cleared $1000 a month. I would call that a homerun. So, don’t worry about the price your job is to get the best terms. 4. If you do get everything right and buy it, get a right of first refusal in the note if the note is sold. This allows you to buy it if another note buyer comes to the seller and buys it. Also, call the note holder every year and offer 57% of face value for all cash right then. Trust me, it works! Hope some of those pointers help. Let me know if you have any other questions. “Great deals aren’t found they are made.”

Over the years I have spoken to several very wealthy individuals about this topic. Not one of them even knew what leasing was when they started out, and looked horrified when I mentioned payments. Now, the funny thing is that one of them now owns several dealerships and leases to people all the time. He drives a Ferrari which he pays cash for. My mantra over the years has always been to get my info from wealthy people and not ones who are justifying their lease. No offense.

Yes, we have several short term rentals and we absorb the cost. Your lender will make you take on the additional cost if you are in certain coastal zones. I’m assuming you are inland because of the low cost of your quotes. It’s really not a lot when you spread the cost through the cleaning charge and raising rates minimally throughout guests’ stays. Take care.