All Forum Posts by: Tom Shaw

Unfortunately not. The Florida State Legislature is considering a pair of companion bills in the House and Senate that are intended to, amongst other things, preempt the regulation of vacation rentals to the state, but even if they were to pass, preemption would only apply to municipalities that did not have their own vacation rental regulations in place prior to June 1, 2011. Madeira Beach enacted their vacation rental ordinance in 2006. :(  

We just purchased a four-unit apartment building in Madeira Beach. A city representative told me that the property may be "grandfathered" for short-term rentals (less than 3 months) since their records indicate that the previous owners did things on a month-to-month basis. We're looking for an attorney that can help us sort out whether we would be limited to monthly rentals or if we could possibly do shorter, AirBnB-type rentals in some or all of the units. Any ideas?  

Thanks, @James Stinnett and @Jason DiClemente!

To James, we could go either way with regard to making the largest unit of the 4-plex our primary residence. It would be smaller than what we're used to, but it's a great location and the current tenants seem like a good bunch. If it goes through, we'd start an LLC to manage the place, so if we do move in and pay rent to our own company, we'd actually be paying ourselves, right? I guess in a way, we'd be doing that in any home we're paying for, but we'd also be getting paid by the LLC to manage the other rentals, so it would reduce our living expenses even further. We're obviously not CPAs either, because the $500K exclusion from long-term capital gains taxation hadn't even occurred to us. So yeah, if you're right, I think we could tough it out for a couple of years! :) And yes, we would be doing some rehabbing along the way. Thanks for the thought, though, we'll definitely be looking into that!

And to Jason, I get what you're saying about maximizing cash flow vs aspirations to scale up quickly. Both options sound pretty good, but we'll have some additional funds down the road to scale up with some cheap SF flips. First, we need to get where the action is so that we can keep an eye on the area and move quickly when opportunities present themselves. We've got a good contractor willing to work with us, so look out, Pinellas County! Thanks again, guys!   

My wife and I are pretty much total newbs to the REI world, so forgive me for the potentially stupid question. There are probably a number of reasons why we shouldn't house hack a full cash purchase on a 4-plex in Pinellas County, Florida, even if we can get a 5% or better ROI. Why wouldn't you, or why would you?

Hi all, we're in the process of starting our first multi-family house hack with a duplex in Gulfport, FL, and although we don't have any real world experience yet, we're learning fast. We also had our eye on a quad in Madeira Beach, but the additional cost and need for some financing steered us back to the duplex. You probably already know that it makes sense to start an LLC before proceeding (which is what we're doing), and if so, I'd like to point out one thing I think is worth considering. If you're doing property/investment analyses beforehand (and you should be), factor in that you will be paying rent (and possibly some or all of the utilities) to the LLC, and that the LLC should be paying you for managing the property. I know this might seem redundant, since it's all your money anyway, but it gives you a clearer picture of the LLC's actual profit and reduces your personal tax burden (disclaimer...not a CPA!). I put together an Excel analysis spreadsheet that adds those factors to the calculations, so if you'd like a copy, I'd be happy to send it to you. Best of luck, and if anyone else would like to weigh in on this strategy, feel free!

@Nick C., I should have refined my competitive comparison to specific locations, but according to Redfin's new Compete Score, competition in Lakeland (where we live) is marginally higher than the areas we're looking at in Pinellas (Gulfport and the beaches). The scores for each area are developed using statistics for the past three month for the number of competing offers, the number of waived contingencies, the sale-to-list price ratio and the number of days on the market. On the whole, in a county to county comparison, I'm sure you're right, though.

After revisiting the rental option, we might be able to cover the mortgage and property management, but the minimal profit doesn't appear to be worth the trouble. We appreciate the insights that you and Kristin Kiddy shared. We're getting a second opinion from a C21 realtor later this week, so we'll see how that pans out. The good news is, our offer on a duplex in Gulfport has just been accepted, so we're off to the races! Thanks again!

Hi all, thanks in advance for sharing your thoughts. We're about to come into some money and get started with our first house hack, flip and/or multi-unit rental in St. Pete. Although prices are higher in Pinellas, our house is in Polk where, supposedly, the market is more competitive. It's a work in progress, but according to comps and a prospective listing agent, we should be able to get about twice the remainder of our mortgage (~$170K vs $87K) just by finishing up a few small projects we're working on. I'm wondering if she wasn't just telling us what we wanted to here so that we'd sign on with her. IMO, there's quite a bit that still needs to be done (mostly exterior, but also in the kitchen) to bump up the curb appeal and get it sold quickly, but what do I know? Is there any rationale for doing anything beyond the few small things we're wrapping up? Everything I've read lately says no, you won't get a positive return on any remodeling done to make things look better. Theoretically, we could rent it out instead, but I don't see the rent covering our mortgage and a property manager's fee, which would probably be necessary since we'll be over an hour away. We could also go the FSBO route, but you never know how that's going to go. Your comments are welcome and appreciated!

Thanks, Racheli Vidal! The area that you're working in Miami has great potential. Best of luck to you as well!

Thanks for the input, Tom Parris. We're just getting into this, but if the scenario you mentioned is correct, that would be great! We'll have to delve into the regulations and try to get some clarification. The beach communities all have their own ordinances and land development codes that vary quite a bit.

My wife and I want ease into the St. Pete Beach multi-family market by living in and rehabbing a two to four-unit property. Our current thoughts are to pay cash or do minimal financing (to bypass flood insurance ASAP) on a two to four-unit fixer upper and live in one or two units while we rehab the others. When it's done and fully rented, we would then buy a single-family home nearby and continue to manage the property. We might also consider doing short-term rentals in one unit, although we've seen a lot of controversy about this topic. If this is something you've had experience with, here or elsewhere, we'd appreciate any ideas, tips or warnings to help us get started. Thanks!