All Forum Posts by: Kenneth Garrett

@Kyle Evans

Airbnb pays the state tax on your behalf, but not the county tax in Okaloosa.  

@Nathan Leger

New construction is not really a BRRRR. You're just buying a rental property. In general, a BRRRR is forcing equity through the rehab. That doesn't really happen in new construction. Most new construction is cost prohibitive as a rental. The construction cost are just to high, unless you're getting a smoking deal.

@Reginald R Cloutier Jr

In order to answer your question or to do the research you need to know specifically what jurisdiction the property is in. County and or city or both. Then you can go online or contact them for specific information. There is no state requirement other then paying STR/Hotel tax.

I listened to a couple podcast with Justin Stamper (Zombie House Flipping) on the A&E network and also Ken Corsini (Flip or Flop Atlanta) on HGTV.  They both acknowledge that when they put up the cost numbers; purchase, rehab and profit they are told to leave out the cost of money.  If they borrowed Hard Money or used Private Money or other costs those are not in the numbers.   

I don’t like the unrealistic portion of the numbers and length of time.  Sometimes you can figure the length of time when they show a beautiful sunny day on day 1 and a winters day on the open house day.  They did agree it’s a show and for the most part rehabbing is boring so they have to create drama to make it interesting for the average viewer.  I remember a Zombie show where they had all these snakes in the house that came in overnight.  Of course the window is left open or the alligator snapping turtle.  They need to create drama for the cameras.  Those of us who actually flip know the difference and it can be annoying. Lets face it, it’s the unreality of reality TV.

 Yes, this was in Florida and I was living in Illinois.

@Valentina El Frih

I used a second home/vacation home for my STR. 10% down. I had to agree to use it 14 days a year, which was no problem to enjoy family time there once or twice a year. I could not have a lease on the property (more then 30 days), but STR no problem as long as stays are less then 30 days, which typically is the case.

@Thomas O'Donnell

Refinancing is acquiring a new mortgage and the idea is at a lower rate. A $200,000, 30 year mortgage at 7% is a monthly payment of $1331, but at 5.5% it’s only $1136, that’s a $195 savings each month or $2,340 a year.  Yes, there is a cost to refinance, depends on the lender.  1% and some closing cost as an example.  The first year of savings might be washed away by cost, but after that you are saving money whereby your profit becomes larger with cash flow from rent.  While you are waiting to refinance in a year or two you are reducing your principle so when you do refinance it might be at $195,000 or $190,000 which will reduce your cost and Increase cashflow.  You definitely want to wait till the reduction in interest rate and terms are worth the refinance as there is a cost.

Years ago you might have gotten an interest rate at 8%.  You might have refinanced multiple times, by the time it came down to 3%. 

My Bentley’s in the shop otherwise, I would be driving it to all my rehabs.  It’s a little tight to load up 2x4, 2x6, 2x8, 2x10, etc., but that’s life as a rehabber.

Those shows are based on entertainment not reality.  I think the average flipper doesn’t make 100K or more per flip and of course the market went up while they are working on their project.  If I had to pick a show I prefer to see ones with small profit amounts it‘s much more realistic.  Good Bones shows very little profits for the most part, but they are in Indianapolis.

Let’s face it flipping houses is boring.  They have to create drama, which of course in the real world, there is no lack of drama when you work on projects.  I also like battle of the beaches where there are 3 or 4 teams competing on different same home layouts.  That’s good for different designs ideas of course it’s generally beach related.

@Kyle Curtin

Let me add some other resources.  

I like to go to the local hardware store in my area and find local contractors.  They are always willing to share there own experiences and I have had very good luck this way. You can also use the big box stores, like Home Depot, Lowe’s etc, but I’ve done better with the local hardware stores.  After you find one good contractor you can get referrals from them that is another great way.

Of course, word of mouth is the best as @Kyle Curtin had mentioned from other investors, if you can get them to share their contractors.

Attend local REIA meetings and seek out contractors and as always get referrals and always check those references. You would be surprised what people will say even if they are satisfied with someone.