All Forum Posts by: Kaloa Devine

@ Nancy Bachety I'm over 60 and really wanting to keep this property paid off. Personal preferance I guess. I am looking at a HELOC now and might do that if I can figure out how to pay it off ASAP. There's still a ton I dont know about this new property. The owner has this business commingled with her other business, so there's no real clear P&L on it and we still havent received the numbers we've requested. I havent given up but not holding my breath at this point.

Thanks seller financing isn't something I thought of (duh) I'm not sure it would be an option for the seller since we are solidly in a seller's market but I'll talk to the agent.

I need to learn about cost segregation too!

We found an Airbnb property that went on the market.  12.5 acres, a 4/2 home, and 4 cabins w/ kitchenettes and Bathrooms, and another outbuilding that has a laundry room and a full bathroom for guests (they also have some glamping type spots). asking is 925k   They are saying 109k gross income a year from the rentals (this looks to include renting the house on Airbnb), I'm still waiting on additional financials, so there's lots I don't know yet. 

We would love to add this property to our little vacation rental business. Currently, we own (and live in) a building with basically a mother-in-law apartment that we've been renting successfully for the past two years. We do not want to sell or even mortgage this building if we can help it. 

If we can make this happen, We'd like to live in the home on the new property and rent both the units out where we currently live. This would get us a larger home and office (we have 2 businesses we work from home and we need the space) and a total of 6 rental units plus the glamping spaces.  

So the question is.... what's the best way to finance this? what type of loan? commercial or residential or ??   And is there any way to do this without pulling downpayment funds out of our current home?  Or at least as little as possible, I'm over 60 now and would rather keep totally paid-off properties, paid off. TIA :)

Personally sharing space with strangers wasn't something we could do. So we started our STR by looking for a home with a Mother-in-law apartment in it. They can be tough to find so you can also look for a home with basement space or other space that can easily be segmented off, with a private entrance.

The reason is not just for your privacy but, because people pay more for a private apartment. 

So look for that VA house but look specifically for one that's already laid out so that with very little modifying you can have a 'private apartment' to rent out. Private rooms are rented cheap, private apartments go for lots more.

I stayed recently in a large daylight basement with a bedroom/bathroom and a bar sink with a coffee pot and a microwave. The door was locked from both sides to the upstairs. I would not have rented a single bedroom in a house, but a private apartment space in someone's basement I paid good money for.

You can do exactly what your planning, just pick wisely.  

I second the thought on researching the higher producing properties and just copy them. Airdna has that information, it's a paid-for service to get this information, but you can just do your research and cancel. I'd also look at adding hideabeds in the common areas. :) Our STR is small only one bedroom and we've got a queen in the room with 2 couches that both fold-out, technically we could get 6 in there but we'd have to rearrange furniture to do that LOL!..so we say 5.

We've decided it's time to set up some entities, and after lots of research, I believe we need to start with a WY LLC with an S-Corp designation. And then probably 1-3 local state LLCs.

I need referrals to law firms (I assume?), or perhaps other service companies that can do this, I'm completely out of my depth on this so totally unsure. I don't want to just pick someone off the internet because they've got a nice looking website. 

Any suggestions on how to go about choosing competent help with this?

I'm looking for a consult to get confirmation that my belief about structure(s) is/are correct and then help to properly set it all up. 

Also, I see costs on this all over the board. (39$ plus state fees to several thousand dollars) What is a realistic price range?  We've barely started making $ so it is a huge issue, right now just trying to insulate from self-employment taxes and Protect our one lone property. 

You said he's a tenant so he's just wanting permission to sublease for a short term while he's gone? Or is there 2 bedrooms and he'll rent the 2nd one? Or is this a deal where he's planning to not live there at all and just rent it out? This last one is the model we are trying to implement. We have been running a STR using a property we own for a year now. It's been great. Now, we are working on getting a rental to add another STR property, but we are not in a position to purchase another property yet.

So if I were you, I'd be asking about the correct insurance. STR insurance is not a normal animal, we get ours from 'Proper Insurance' they provide coverage through Lloyd's of London and they were the only ones who understood our situation where our primary residence is in the same building as our apartment rental. It's not cheap, but it's great coverage, they understand STR's and be sure you are on it as a beneficiary. Additionally, I'd have a month to month lease, or at the very least request to look at other STR listings to see his reviews. Does he have experience? Can he show you he knows what he's doing? According to the reviews, are his units clean and are his guests happy?

If all the above checks out, then I'd think about asking for profit sharing vs just getting the rent amount, profit sharing might just be much more lucrative depending on the property, but look at the seasonality of your area could it drop significantly in the offseason? Then maybe regular rent is the way to go. 

Given the above information, and my last year of experience with Airbnb I'd do it.