All Forum Posts by: Justin Anderson

Yeah, you'll have a really hard time buying in an LLC if you want to try that way, especially if it is a company with no history. Transferring title to the LLC later can happen in a month or three after servicing the note has transferred. Technically lenders don't like that and can call the note, but that basically never happens as long as the bill is getting paid. You can definitely search through here to read up on that as there are entire threads about it.

Your partnership agreement would outline what share of the house you possess but the money partner just keeps it in his name until you're ready to quit claim it over.

In the situation I was referring to, the partner bringing the money has title in his name alone.  The other partner buys in over time through sweat equity (and cash, as available) until he reaches 50/50.  The partnership agreement outlines how buy in occurs, roles and responsibilites, etc.

Property management can run from 10% on up.  (A buddy of mine has a hill country house where the manager charges 40%!)

As you go through the process of interviewing STR managers, I'd just ask them "How much to help me decorate it out?" I wouldn't be surprised if some didn't do it for free or super cheap just to win your business. Of course if you have to FULLY furnish it, that would be more involved and probably cost you a bit.

I don't think it's overly hard or time consuming to do that, though.  Why not take the first pass at furniture yourself over a weekend?  Just hit up a cheapish place like Rooms to Go and then Target for some random accent pieces.

You can just do an LLC with 2 members where 1 has the 'capital contribution' (and presumably the note in his name). You just need to spell out who gets what from whom, what the equity split is, roles and responsibilities, decision making, buyout options, capital calls, etc.

Any lawyer will be able to write this up for you so everyone is covered.  Just agree in principle before you go to the lawyer so you hit him with a handful of bullets to draw up the paperwork.  Otherwise you'll end up paying a lot more money than you need to as he pulls those bullets out of you.

EDIT:  To more directly answer your question.  It's really up to you how it's structured and there isn't necessarily a right way.  I've seen one where one partner gets 100% of the profits while the other partner 'buys in' with a management fee that 'buys in' over time.  Or another where partner number 2 buys in right away with cash after closing that couldn't otherwise be touched.  It's really what works best for you all.

I don't have a subscription but have looked at the data for Pigeon Forge (where I own/manage several cabins).  The data there is horribly inaccurate and not indicative of the results I'm seeing.  As in I make 50% more than airdna shows.

Looking at it logically, airdna aggregates data from all owners including those that are doing a bad job.  So I think it may be good at comparing overall markets with each other, but I wouldn't look to it for specific revenue number guidance.  Talk to local operators for their results and estimate on the high end from the airdna reports if you think you'd do a half decent job.

I agree with basically everything said so far...  Not starting sooner, making the numbers work, etc.

For me personally, it's tough knowing the difference between what "I" want versus what the renter expects/wants.  

Let me explain...  I have several cabins in Pigeon Forge.  The style there is definitely not my style.  Lots of shiny pine wood, no sheet rock inside, bear decor everywhere.  When I think of cabin, I think Colorado lodge style and that's what I want.  A bit more upscale.

Well, the renters expect the pine walls and log exterior.  And that pine I don't like that much puts up with the abuse that the guests dish out.  If I were to put in all the little design touches to make it more to my liking, the guests would destroy it in under a month.

Said another way, don't spend your money putting quartz counters and custom tile showers in a class C/D apartments.


So it goes back to know your area, know the amenities that people expect, and don't overspend getting your STR/LTR online.

I've bed bugs in one of my long term rentals.  Lucas is spot on with everything he said, but let me share a couple of things I learned and a funny story...

- Chemical treatments don't kill all phases of the bed bugs.  Only heat will kill them throughout their life cycle.  (Plus chemicals doesn't easy get behind an outlet face plate or down in a groove in the wood floors where they may hide)

- I don't worry about it at all because it's outside of my control. But I've had rentals for over 10 years and STR for a few years and only had that one case.

Ok... Fun story time from a local Pigeon Forge friend that I'll call A.

They get a call from a guest "Karen" a few days into their vacation...  

Karen: "OMG I can't believe it.  It's SOOOO horrible.  There are bedbugs here and they bit granny.  She's itching and red and it's horrible!  You've got to get me out of here ASAP."

A: "I'm so sorry about that, Karen.  I'd be frustrated if I found bedbugs too.  I'm so sorry you've gone through this and let me make it right."

Karen: "Damn right, and thank you.  You better not try and make me pay after this nasty experience."

A: "Will you be at the cabin for a bit so I can send someone to go check on this?"

Karen: "I don't know why but I guess so."

Proceeds to call the exterminator to explain the situation.  The exterminator plus bed bug dog meets the cabin manager at the cabin an hour or so later...

Karen: "About dang time you showed up!  Where are you moving us?"

A: "I brought the exterminator so he can help me find the bed bugs so we can get you moved. The dog is good at finding them and he'll let us know where they are."

Karen: "Hang on, let me grab my suitcases out of there before you go in."

A:  "No, maam.  I need you to stay out here so we can do our job.  It will only take 5 minutes."

Karen then gets mighty fidgety as A goes into the cabin.  Wonder what has her worried??

Well, the dog proceeds to sound on the garbage in the kitchen.  Odd, right?  Well it turns out there was an mailing envelope and an empty vial label bedbugs, purchased online.

And in an effort to be thorough, the exterminator goes through the rest of the cabin and the dog sounds on the suitcase.  He brings it outside to Karen and asks her to unzip the pocket.  After a bit of back and forth, she unzips it to show a second vial that has bedbugs still inside.  

You see, Karen had a buddy that was staying a few cabins down the road and the expectation is that she was going to share her 'FREE VACATION!' method if it worked.

Scammers are out there and they usually don't go to these lengths... But it's possible!

All great advice so far.  I'd add two other bullets...

- Someone above said price for profits and not occupancy, but recognize they are intertwined.  If you get $110/night instead of $100 but you now have a few vacant days, there goes your upside.  Just recognize you need to raise prices in peak times and lower them to get butts in beds.  Your inventory is perishable, so slash prices last minute to get something instead of nothing.

- Customer service is huge and you'll live and die on your five star reviews.  I straight up ask guests if there is anything I can do to make their stay 'five star amazing' before they stay and then offer up a good review for them if they leave me one too after they leave.  I've got 4.9* across multiple properties and hundreds of stays.

A few other random lessons learned I didnt see above...

- Anything above a 1 bedroom has minimum age of 25 for me. That keeps out the parties as best we can.. just know that some here dont agree with it (and check that it's ok in your city)

- verify STRs are legal where you are and get the necessary permits and licenses

- read a lot here on tips and tricks.  You'll need to learn everything from how to file a damage claim to win to correctly answering questions on pets/service animals to refund policies on the sites.

- pick good cleaners.  It's way more challenging to get 5* when a guest walks in to a dirty sink or stained bed.  They also let you know about maintenance issues.

It's a fun journey and get ready for the ride!