All Forum Posts by: Jonathan Harms

Easiest, least creative solution would be to get a credit card.

You can also get an appointment/phone call with a business banker where you bank, and ask about obtaining a line of credit. They will tell you if you have the inputs to borrow on a line of credit for this project.

Rents are down everywhere nationwide, and from what I’m seeing, a result is that people are moving from place to place less.

That’s probably because renters aren’t chasing the place anymore and are content to wait in residence until they have a DP or another life event other than cheaper rent, to make them move.

It works out because there are less resources for an owner spent turning homes, which evens out the lower rents.

In my opinion, there isn’t much available in our area to invest in, because owners are sitting on their properties because of the high rates. Plus, competition has increased exponentially in the last decade.

I wish you the best! Sounds like a fun and good idea. Knowing you are in Custer, I can suggest Brian W. at KT as a CPA right there in Custer. We’ve been clients of his and still use his services from time to time. Originally we first got on his book because one of his specialties is real estate investments.

Good Luck!

@Erin Baumfalk Is this the place by Happy Holiday RV community and across from Reptile Gardens?

You asked about tax and legal. I give this advice to about anyone…Get a lawyer before you need one. Building that relationship and trust before a sticky situation arrives has huge value for a real estate professional. It’s worth the couple billable hours it incurs.

On tax strategies, learn your annual income and expenses as quickly as you can. At that point, you’ll be able to pretty accurately forecast some big dollar maintenance/repair/improvements so that you can spend your dollars on that stuff instead of on spending them paying taxes. Seems obvious, but there is some nuance and the simplest method is to know your revenue.

 "Sometimes you get shown the light in the strangest of places if you look at it right."

It's super competitive for STRs in the Black Hills. Not just for pricing, but for the level of hospitality required.

I've been in the game since at least 2015 and one thing I've learned is that STRs aren't just about providing a place to live. When vacationers show up and their accomodations don't meet their expecations, it could ruin their vacation. Which for many is the only one they get per year or every couple years.

My daycare provider's husband is the state inspector that approves and denies STRs out here for the Health Dept. and he said that there has been an explosion of noobs wanting to get in the game, so his denials have gone up quite a bit because they aren't in compliance. That's a tough blow when somebody's money is tied up in a piece of real estate they don't live in. But...this will be your primary since you travel a bunch (lucky!)

Realistically as an investor, we love the out of towners coming in and paying over retail for a shot at the STR money. If you know what you're doing, can build the network (cleaning, maintenance, etc) to operate the place, and can meet the minumums of good hospitality, you should do it!

But since you are asking advice, I would look in an area where the hospitality competition is lower.

Cool plan Wyatt! Have you spoken with a business banker yet? Or asked about portfolio lending? Sounds to me like you would want to lay your plan out to them. Getting on the portfolio will be a heavy lift for a new investor. Consider small local credit unions. They may be easier to get to do business with you.

1) Acquire a home that meets your (and the banker's) criteria.

1.1) Ask the banker to finance the first project for the time period until you can refi into Fannie and Freddie

1.2) Ask the banker if she/he has any pull with the mortgage department at the institution to ask if you can go on portfolio for a short season.

1.2.1) Bank earns in the short term on the portfolio loan, then when your timeline is realized, they earn on the origination and sale of your loan to Fannie and Freddie.

1.2.2) Alternatively, use hard money until you can get your refi. (I would advise against this until you get more experience)

2) Rehab property one

2.1) Get next property under contract

3) Get a renter for property one

4) Move into the next property and repeat.

I have recently earned some good insight by "vacationing" in Sioux Falls. I live in Rapid City, so I know the market here pretty well. I've just begun researching Sioux Falls to start investing there too. Here's my take...Both markets are growing with new communities of people moving to town.

In Rapid City, it's (mostly) retiring folks from Colorado (California too) moving in and paying cash over asking price. Our growth is lop-sided on the higher income end, so buy and hold leasing is kind of on pause here. Like @Vince Mathis said about Phoenix, Rapid City has slim buy options and tight margins...lot's of forced appreciation. Also, there are SO MANY real estate agents in Rapid City; only 6 houses sell for every agent in the business (2,265 houses sold, about 375 agents).

What I learned on my visit to Sioux Falls was that the growth occurring there has a more diverse base, not just retirees flush with cash. To me, that means healthy, sustainable growth with plenty of opportunity to find qualified renters for buy and hold. I like Sioux Falls a lot for investing.

Great post and you've got some great adventure in front of you! I'll echo @Bill B. on his fine point about income tax. Since you asked, I would suggest the Lake Tahoe are, living on the Nevada side. Incline Village is notoriously expensive, but if you are house hacking, you have a great chance to level up quickly in a first rate area.

I am also a big fan of Arizona because I love Tucson. Since you are looking for outdoor activities, I'd suggest Prescott or Flagstaff.

Hi @Macintyre Braun, DM me...Depending on what info you are looking for, I may be able to point you in the right direction. It’s been a couple years since I’ve flipped (I mostly buy, rehab and hold), but I live in Rapid City and can get you a general lay of the land for that world here.