All Forum Posts by: Kevin Luttrell

Temple View Capital will lend on STRs with no rent history, based on Airdna projections. DSCR financing.

They're not the easiest to work with, but they're an option for you.

 I use Chase for banking and I live in CA and operate the business from CA, so I know I'm normally responsible for the CA $800 business tax. Thanks for sending that article though, I didn't know the tax is waived the 1st year the company is in business! My CPA didn't know either, passing this info on to him. 

Are there any tax professionals here who can confirm if the form 568 and CA franchise tax are still required, even if I have a single member LLC in another state with no income or expenses?

Hi BP,

I have a single member LLC in Indiana with no property or income in CA, but still have to pay the $800 tax since I'm the managing member living in CA. The LLC only owns 1 rental property and cash flow is pretty minimal, so this $800 tax hurts a lot more. I'm thinking about deeding the property out of the LLC into my personal name to avoid the CA tax. I'd like to keep the LLC open though just in case I need it for something in the future.

My question is, if I keep the LLC open, do I still have to file form 568 and pay the CA tax even if the LLC has no income or expenses?

@Julie Chai like Chris said, there are usually hotel/lodging taxes and local state and county taxes for STRs. Also, many states treat the operation of a STR as a business rather than a rental property, so you have to pay different types of business taxes as well. It can be complicated - in TN where my STR is we have to remit lodging taxes from guests to both the state and the county (for bookings that are not through Airbnb/VRBO), file monthly state tax returns, and file and pay annual state business tax. There is also a franchise and excise tax we pay at the end of the year since the property is in an LLC in addition to normal income tax.

I recommend paying the $27/mo for MyLodgeTax - they handle all of this for you. 

@Julie Chai @Dan Francis

We were about to sign up with Evolve when we bought our STR and last minute decided to try and rent ourselves first to see how it went. Best decision we ever made. I won't bash Evolve too much because it could be a good option for some people, but there are definitely some downsides. I've seen many reports of poor customer service and guests not being able to reach them when needed. The liability coverage they offer is paid for by guests and built in to the cleaning fee, which is a turn-off for guests (Evolve properties charge $200-$300 cleaning fees in our STR area while other comparable properties charge $70-$100). And when it comes down to it, you can do almost everything they do yourself without a 10% cut taken out. Takes more time up front getting it all set up, but I think most investors here who manage their STRs themselves will tell you it's really not that much work once you get going and have your processes in place.

Here are some softwares we use to automate and streamline our STR business:

Channel manager - Guesty For Hosts

Dynamic pricing engine - Wheelhouse

Cleaners - Turnoverbnb

Taxes, licensing, compliance - Avalara/MyLodgeTax (we don't use this anymore but I'd recommend it for 1st time STR investors)

@Erich Wolff

As you can see you’ll get a lot of different opinions on VRBO vs Airbnb. I personally much prefer Airbnb over VRBO – I’ve had several issues with VRBO not correctly updating my calendar and pricing. VRBO also accounts for only 1% or 2% of my bookings – apparently it’s not popular in my area.

Jonathan nailed it. I also use Guesty – I pay $18/mo for it and it syncs all my calendars and rates across my different OTAs. No double bookings. One of the big benefits is that you can set it up to add a % to your rates for OTAs with higher commissions. Ex: Airbnb charges hosts 3% while VRBO charges 8%. I have Guesty set up to add 5% on top of my normal rates for VRBO so the payout is about the same as Airbnb.

By the way @Jonathan Avellaneda what other platforms have you had success with besides Airbnb, VRBO and Booking.com? 

@Farhan Javed I also recommend taking a crash course

@Rahil Jain Fannie Mae and Freddie Mac will not permit a cash out refinance to close while listed on the market or pending sale. So if this were a 1st lien conventional loan transaction it would be an issue. Again in your case since it's a HELOC it will be bank specific. Many banks model their HELOC guidelines on Fannie and Freddie guides though.

That being said, I'm not aware of any law requiring you to disclose the upcoming sale on a HELOC application unless it's specifically asked about.

@Rahil Jain that’ll probably be bank specific. Can’t speak for myself since we don’t do HELOCs, but I can see a lender being ok with this since 8-10 months is still a ways out.

It’s hard to find banks willing to offer HELOCs for investment properties in general though.

@Randall Alan On peerspace you can choose what kind of events you permit at your property. We will not be allowing parties, just things like photo shoots and small events. Haven't had any bookings through this yet but it looks like it could be a very profitable way to fill some gaps in our STR reservations. Other comparable properties in our area are charging $100-$200 per hour for peerspace bookings.