All Forum Posts by: J.C. Martel

@Joshua Seeley, thanks for that reference. I'm holding my rentals in my S corp too because as a real estate licensee my rental income is considered active, not passive. Just adding another point to this discussion that tax status is really dependent on your individual situation. If I weren't a licensee then my rentals might be passive income, if I weren't actively managing them, and then they'd be better off in an LLC.

@Roshael Reece, I have the same question. I have an S corp holding two properties and thinking of going back to the more common LLC structure for any future properties that I buy. I realize that I can move my properties from S corp to LLC within triggering a sale in the eyes of the IRS. Not sure if I should just keep moving forward as an S corp for this reason.

@Cliff T., I also have S corp tax status. How are you doing with your S corp? Are you holding rentals in the name of the S corp? I have 2 properties in the name of my S corp and wondering if that is a good approach. A few posts here say not to do that, but don't say why. My attorney & CPA advised me to use the LLC business structure with S corp tax status for lowest tax rates & maximum pass-through losses.

@Alex Olson these things make sense as one of many strategies to scale. 

Personally I have my own house for my family, 3 LTRs, hard money lending, and now I’m planning to bring on 2-3 STRs in places where I personally spend $2500-5k per year to vacation. Owning STRs makes sense for where I’m at, but I definately hear your points. 

@Matt Nico are those cash flow numbers with a 10% down or 20% down note? I imagine when you bought, the price was a lot lower too. So my cash flow would be lower if I entered the market now, and having only 10 or 20% down. 

@Alex Olson I would think STR would allow you to scale faster because they tend to have higher cash flow.

Curious if anyone has experience with short term rentals in central Massachusetts. I am from Worcester and want to buy a place there or nearby that I can use when I visit a few times a year and rent out short term otherwise. I currently have an LTR in Worcester but the HOA doesn't allow STR.

My issue is that Worcester is not a destination city. There's no beach or mountains or attractive metro area. So at face value, it doesn't seem like it would be a great STR market.

However, it has some decent colleges (WPI, Holy Cross, Clark, Anna Maria, Becker, Worcester State) and has a decent hospital (UMass) that might attract people to STRs. 

Does anyone have perspective to share on STRs in the Worc area? Any realtors who know the investment market in central Mass, particularly STR?

I am from there, so realize that some areas are pretty distressed. Lake Quinsigamond is decent; that’s one area that I’ve been tracking. I’ve also thought of going north to NH, east to the coast, or south to providence. Any advice?

@Alex Olson, curious what you’re seeing for returns on STRs in Kansas City. I was thinking of investing on the east coast but the prices are so high, I may just turn to KC. 

@David A Lisowski, who is the lender? I’m interested 

@Pat Chamara, I’m in a similar boat. I’m looking at New England (central Mass, Boston area, north shore, cape, or Conway NH area). My budget is the same - around $400-500k. I’d love to jump on a call and chat about what we are seeing if you’re available.

I may be approaching analysis paralysis to some extent. I'm a bit nervous about jumping in right now because it's such a sellers market and prices have skyrocketed since COVID. I question if the cash flow is still there given the higher prices. Also concerned about new STR regulations that pop up.