All Forum Posts by: Kevin Luttrell

 Ya, "race to the bottom" is exactly what I'm playing these days. I don't like this game. 

Ya, like Ben Vorspan mentioned, AvantStay has moved away from their "master lease" arbitrage model. They switched us to a normal PM structure after 2 years with them on the master lease. It's been quite a poor experience for many of the same reasons mentioned above and we're firing them after 1 year as our PM. 

They take good care of the properties, but there's not enough attention given to pricing strategy and they spend money like nobody's business (not a problem when they were spending their own money on the master lease model, but a BIG problem when they were suddenly spending OUR money as the PM). It's no wonder they ditched the master lease structure - easy to see now how they were losing money on it. 

If you're signed with AvantStay on the master lease and the numbers work out for you, I'd say ride it out for as long as possible. It was a really good gig for us. If they try switching you to a regular PM structure or you're considering them for PM, run for the hills. 

Thank you very much for the thoughtful response Dennis! I really appreciate it. TrueDoor appears to have a great reputation online, I'll be giving them a call.

Hi All,

Does anyone have a good PM company they've used or are using in or around OC that you would recommend? I'd appreciate the insight. 

Thanks! 

John must have lucked out. I had a similar experience to you Josh and my management company said all of their other owners are experiencing the same. The fire inspectors couldn't care less about your bookings and are taking their jobs VERY seriously. 

Had my inspections done a month or two ago and they checked about a dozen items per property that had to be corrected and told us the properties were deemed "uninhabitable" until then and no one could stay in them. We cancelled our bookings for the next week while completing the work as quickly as possible, since as John mentioned they have the power to permanently pull your permit so you cannot rent at all. Once the work was completed we alerted the inspector and tried to get him back out ASAP to verify, but he wouldn't get back to us. They're extremely busy with all the inspections and permits they have to get done in the area. We did not continue to cancel our bookings after that - I decided that it was worth the risk since we did what was asked of us and wouldn't be fair for us to have to wait for him to have time to come back. 

So long story short I don't think it's likely they'll come back and check on your property to make sure you're not renting prior to sprinkler installation, but they can if they want to and if they find renters they can permanently pull your permit. Up to you on whether or not it's worth the risk. 

 As a mortgage broker I can tell you this is underwriter discretion. Some underwriters may not care or ask, while others may scrutinize the situation. That's why you're getting different answers/experiences in this post. 

Fannie Mae's definition for second home properties includes "must be occupied by the borrower for some portion of the year". An underwriter more heavily scrutinizing the situation might think it's unlikely you'll be vacationing to 2 different homes in the same area each year. 

Generally speaking, I have not seen underwriters look too deep into occupancy concerns related to second home vs investment property since Fannie/Freddie installed new LLPAs a couple years ago that make the pricing for each aligned in most cases. There is now essentially no benefit to obtaining a second home loan over an investment property loan, except for the ability to do 10% down rather than 15% (minimum for investment properties).

This info is all related to Conventional mortgage financing. If you work with a local community bank or credit union or some lender that doesn't sell to Fannie/Freddie in the secondary market, their guidelines and pricing could be different on this matter. 

I have LLCs set up in the state my properties are in, but if I could do it again I'd probably just do one for my home state because you have to pay business tax in CA if you live here even for out of state LLCs. So now I'm paying business taxes and renewal fees in both CA and TN...

If you don't have that problem with your home state, it's probably more about preference. 

 There we go! That's exactly the kind of alternative solution I was looking for. Thank you very much for sharing Wayde! 

 Very interesting. Do you run into issues with cleaner retention when reducing their pay? 

You have a separate individual inspect the quality of the clean for each turn? How much do you pay them? 

Thanks all. Looks like a good number of you pay monthly, which would be most ideal for me as well. Going to see if my cleaner will accept that. If not, I'll likely have to stick with Turo for the convenience.