All Forum Posts by: Garry C.

Congrats. Sounds like a great deal.

Always remember, you can have work done fast, cheap, and well, if you just pick two.
I can get all three by doing the work myself. But that probably wouldn't work for a 5 unit.

Thanks for the mention @Bill S.

@Jennifer Delmore, that Littleton meetup sounds like the one that @Bryan O. and I host. I hope to see you there. We can definitely talk more about it in person.

I would be careful of deals that aren't deals. Unless you're buying it for yourself regardless, and are just hoping to recoup some money in the meantime. But if you want it to be a viable investment, the numbers need to work. And you should have an exit strategy in case things change after you get into it.

My first one started out as an "I'm going to mostly use it myself, and retire there, but I'll make some money when I'm not there." I hardly ever use it myself though. I do, but it's not often. And even then it's usually during the week or slow season when it's not already rented.

If you can split it into two (physically and legally), why wouldn't you? It shouldn't be a 'permanent split'. If you have doors between that lock from both sides, now you've got two 2BR rentals and one 4BR. Obviously you can't always rent them at once... but I think you'll find the 2BRs to be more popular, with the occasional request for a 4BR. And then, you'll want to screen carefully. If it's not a large family, it's likely a group of party people.

@Bill S.

You can't 'fight' an HOA. They will win. Every time. In fact, you are part of the HOA, so you're fighting against yourself. Think about that.

What you can do is talk to the board. In most cases, that's all they want. They are community members just like you, who have volunteered time to help run the business of the community. Many times there is resentment there for community members that do not volunteer, or seem to even care, about the community rules and/or property values.

Take the time to go to a board meeting and explain your situation. Mea culpa, you didn't read the rules well enough, ask for extra time to figure out your exit strategy (which you really should have had figured out prior to buying the property). Get clarification on what is the minimum number of consecutive days approved for rental. If it's 30-90, you may very well be able to keep going as a corporate rental like Myka stated above. However, I wouldn't volunteer this information and I would keep the leases handy in case they again accuse you of violation of the rules. If they are not on board with STR or even Corporate/Nursing rentals, this is likely to considered a 'loophole' and they may attempt to close it by extending that out to minimum 6 or 12 month leases.

Don't let things get contentious when you meet with them. Again, this will not work. If anything, try to be friendly enough that they'll want to invite you to become a board member when a seat opens up. It will help if you start attending the monthly meetings. You'll likely be the only resident that does, except for the occasional person that shows up with a complaint. This will require about 1 hour of time per month, and the payback can be great.
Once you're on the board, you can convince them why this is good for the community, or at least why it's not a bad thing, and help to shape the rules to allow for STRs. In fact, if you're attending regularly, you may not even need to become a board member to get to that point. As long as you're attempting to work with them, not against them, you may get what you want.

After that, you'll just need to worry about the next step up in local government, and if your city/county/etc. plans to restrict STRs in any way in the future.

I use the erentallock system. They are based in Canada, and the lock will be about $350 shipped to your door. Set your master code, install the lock, and away you go. Start cranking out codes at their web site, from your computer or phone. It's a bit clunky, and there's no smartphone app (yet), but the best part is NO INTERNET required. This is great, as Internet may be spotty (outages or poor wireless), or your modem may occasionally hang, or perhaps guests disconnect it for some reason. Erentallock doesn't care. The programming is all in the guts. As long as you set the correct time when you setup your master code, you'll always be able to generate codes on the web site that match what's already 'stored' in the lock itself.

I use the erentallock system. You can do exactly what you want to do, make a code that lasts from a certain time/date and expires in the future, and you can do it without any type of connectivity. No bluetooth, no wi-fi, etc. You first setup the lock with a master code and that is used as a hash to generate future codes. You do need to be able to access their web site to generate the codes, but you can do this from anywhere. You don't need to be where the actual door lock is. The web site is a little bit clunky, but it works great and will do the email right from the app. Or, copy/paste the code into whatever you use for notifying guests.

I've been using this system for 5 years and I've continually compared it to the new ones on the market (igloohome, rentinglock, resortlock, lockitron, etc.). I believe erentallock is still the best bang for your buck.

Now if only I could find a lockbox that does the same thing...

I know Brandon keeps saying to stay out of Bitcoin, but I've been into cryptocurrency for a while. There's tons of innovation going on, and while it's volatile at the moment, I also believe it's going nowhere but up in the mid/long term. Although with BTC specifically it will be interesting to see what happens with the Segwit2x hard fork later this month. Again, volatility is the name of the game at the moment, but not much came of the last two forks, so I'm optimistic that relative stability will continue in the short term.

I've been thinking about what can be done to incorporate the blockchain with other industries. Like you, I come from IT and I'm moving to RE, so obviously I'm thinking first about how the RE world can benefit from crypto and vice versa. In addition, I've researched the quad cities a bit in the past, for out of state RE investment opportunities.

I'm definitely interested in hearing more details about your ideas, as well as seeing what ideas/help I can offer.

Where I buy, in the mountains of Colorado (ski resort towns), properties are bought and sold already furnished. So there really aren't many acquisition costs for FFE.

However, I often want to upgrade to fit my style/brand. Things like kitchen appliances/dishes/flatware, brass light/plumbing fixtures, plain white switch plates, wall paint, etc. I generally figure about $500/bedroom for these things.
Obviously this is much more shoot from the hip than what Paul uses, but I guess that's because it's variable in my case, due to the fact that rental properties come ready to rent.
I therefore try to hit the ground running with a rental and then work on updates over the shoulder/mud seasons (May and October).

I guess my point is that your calculator sounds interesting, and looking to include FFE calculations is probably a good idea, but make sure it's optional for cases where it's not necessary.

@Erin Spradlin, can you explain what you mean about higher 'management fees' with VRBO? Are you referring to using their commission based services as opposed to the annual fee? In this case, it can be quite high, although it probably doesn't make sense to go commission based unless you're doing less than $4k/year in bookings.

AirBNB charges service fees between 3-5% to the host, depending upon your cancellation policy (I'm currently being charged 3.8%). For the guests, the service fees are as high as 5-15%, and I've found it difficult for a host to determine what these are.

VRBO service fees are 5-12% for guests (potentially lower than AirBNB). Host Fees are 3% for credit card processing, and the annual listing fee of $399. If you're grossing $30k in rental income annually, the listing fee works out to be about 1.33%.

In my mind, the only leg up that AirBNB has on VRBO is the fact that they collect and remit taxes for me (they may not do this in every state). However, with VRBO becoming more like AirBNB every day, the differences in the platforms are much less than they once were, which is not necessarily a good thing for VRBO.

No matter where you are, you'll want to use both. It took me a while to realize this, and I hid my AirBNB listings for a while before finally bringing them back on full time.
My properties are in the mountains, at or near ski resorts, and 90% of my bookings are currently from VRBO. I hope someday to have them 90% from my own web site and 10% from these two listing sites.

Some say the site that will work better for you depends upon your area, or your property type. I believe it depends on the people. I find that those using VRBO are looking to 'vacation'. They are usually families, looking for something memorable and comfortable. AirBNB users tend to be younger, couples or groups of friends, looking for something convenient and less expensive.

I've never had any of the issues that you hear horror stories about, raging parties, etc. However, I do feel that in general the VRBO guests take better care of my properties. They also plan ahead, whereas the AirBNB guests are usually last minute (on the rare occasions when I have last minute availability).

Over the past year VRBO has been trying to become more like AirBNB, which is annoying to me. So, the differences are less and less every day. The exception to this is the fees, in that VRBO has more, for both guests and hosts. They are also both making it more difficult to market your own brand, which means this needs to be moved down to the physical layer, in your properties.

I BRRRR'd my first vacation rental property and used the equity to purchase another STR and a traditional rental.

I think your friend is talking to the wrong bank(s). Have them find a good mortgage broker that deals with lots of banks/lenders. Ask an agent that you trust for a referral. Brokers have a good idea of which lenders do what types of loans and can help you to cut through a lot of the research. Naturally, there is going to be a bit of an upcharge there, but you're paying for a service so it might make sense initially.

Look for portfolio lenders, smaller banks that aren't going to sell your loan to someone else. They can be less restrictive on things like this.