All Forum Posts by: Greg Teplansky

So my wife and I just landed a nightly rental approved condo in a resort area. We’re trying to figure out what to expect cost-wise for furnishings and interior design. I was wondering if anybody has any resources in this area and experience in how to do it and not break the bank. I’m not creative when it comes to interior design and wondered if I should bite the bullet and hire a professional to establish our interior design theme. And all info appreciated!

So I am thinking about selling shares (in the future) of a vacation rental property I intend to buy very soon. I am wondering what the tax implications of this are? I intend to hold it in an LLC in the first place and then make the fractional buyers proportionate members/beneficiaries of the LLC. I think this would eliminate the possibility of triggering a "due on sale" issue because the property is already in an LLC and I am only selling interest in the LLC. Either way, would I be taxed at the normal capital gains rate (for me it's 15%) for each share that sells? Would myself and the other owners be able to utilize the STR loophole if it is used as a nightly rental? I would use a company versed in this process to manage the operations of the LLC and collect the rents/operating costs for the owners. I'd love to get schooled on this a bit if I'm totally outta my mind with this plan, but if there aren't a bunch of tax or legal roadblocks, I'm thinking it can work. I like the idea of selling shares to pay down the mortgage I'd have on it or use it for the next purchase, maybe a 1031. Please chime in and let me know what you all think. Thank you guys!

Fantastic information thank you so much ! I love this forum!

Thank you!

So I'm pretty no to REI and I'm hedging on starting an LLC to put my first STR into. When you start reading about this and searching the internet one thing I find is true... there are many LLC formation services that claim to do a bunch of stuff, several of them sell expensive "education" packages which just get a foot in the door to sell more services, and other do-it-yourselfers (legal zoom)ut. I'm looking for some guidance on this. I'd love to have a service that does all the heavy lifting stuff for me at a decent price and also one that I can be relatively assured is backed or supported by an attorney. Or should I just bite the bullet and look to pay an attorney. I want to ensure I am not over structuring and getting hit with a bunch of state fees. I am reading about Wyoming LLC's being best for anonymity, but I want the most protection with the least complication! My property is in Utah and I unfortunately live in California. Any suggestions, warnings, or references of service providers would be great!

The tough balance is that the management companies charge 20-30% which will severely limit the positive cash flow. However, they perform all of the concierge services including advertising and booking. So I had to look at it as kind of walking into a ready-made business in a sense and the challenge is more so getting a steady stream of bookings after the builder/renter is out.

The leaseback was mandatory as this is their first model of their development. That is really what got me interested in this at the price point of the unit. My unit will be one of five units in the same building and the builder will be building around 60-80 units. This is a sub-development of the larger development/neighborhood area which is basically built to be STR friendly because it is built around a large 2.5 acre man made pool/lagoon. The overall development is a mix of various builders of condos, townhomes, and SFRs. Most of the areas around the lagoon and pool area are zoned for nightly rentals while the remaining areas a little further away are not. This development is only about three years old so the projections are still subjective. The two on-site hoa approved rental management companies (which must be used if you do STRs with your unit) project around 60% occupancy. I think 40-50% is conservative but somewhere in the neighborhood.

Thanks for the response. Yes the leaseback will cover the loan and fees for the duration…if we don’t break even, we may have a tiny cash flow.the builder is using it as a model until they sell the remaining units they will build over the next couple years. The leaseback will be $5500/mo… I’m estimating the mortgage around $4700 and they are paying the hoa’s while they’re in.

So we bit off a big one for a first investment! Wife and I just went to contract with a builder on a 2k sqft 4/3 townhome in a resort development in southern Utah. The deal is the builder will lease my unit for at least two years. I think we are overpaying a little bit but it is zoned for nightly rentals and may payoff in the long run. We will finance the 25% down with a loan at 3% from a life insurance policy loan and hope for the best on the conventional investor loan we will have for the purchase money. We plan to try it as a short term rental after the builder is out. Question one is, does this sound like an inherently bad idea to anyone? Question two: I know I should get this put into an entity like an LLC, maybe even Wyoming LLC, but should I spend the money to set this up before I complete the purchase? Obviously, we need to maximize our tax effectiveness in the situation and the monthly is going to be huge, especially if we can't get the rents to cover the mortgage. I considered one exit strategy if this doesn't work after a couple years, which would involve selling fractional shares of the unit while keeping half of them myself in hopes, the sale of the fractional shares would offset the existing mortgage and maybe put us in a winning position. Looking for opinions and input since I'm relatively inexperienced. Thanks.