All Forum Posts by: Mark Miles

When you're buying a house using an agent, and the purchase contract has an inspection contingency period, and some fairly sizable issues arise during the inspection, does your agent: a) try to convince you these items aren’t a big deal in order to get you to closing ASAP so they can get paid?, b) offer to help you get quotes on fixing these items?, or c) something else?

Yeah, it's tough right now - lot of issues going on, regulation and restriction of STR is one of them.

The below thread has basically become the default Poconos thread in this forum with valuable input from multiple experienced investors. be sure to read the thread all the way to the bottom to gain its full value (there’s quite a bit of info in there!):

https://www.biggerpockets.com/forums/530/topics/711235-vacation-rentals-in-the-poconos

Let's say you already own 2 houses that you use for STR. Has anyone been able to get a conventional mortgage on their 3rd STR house, with the lender accepting the STR income from the first 2 STR houses? If so, what type of conventional mortgage did you get on your 3rd house? Was it a "second home" conventional mortgage or an "investment property" conventional mortgage?

Hey Scott - per your comment above about having helped serveral clients in PA, I'm curious - did all of your clients pay the transfer tax when they transferred title to an LLC? This tax is particularly onerous in Pennsylvania, which charges a transfer tax of 2-4% of the property's value, depending on which PA jurisdiction (I believe this to be one of the heftiest transfer taxes in the nation).

There are a few cases in which you don't need to pay the transfer tax, but transferring title from personal name to LLC is NOT one of those exceptions. According to (c)(1) below, if you were transferring the property into a living trust (per the St Germain Act), the transfer WOULD be exempt from transfer tax IF you were PERSONALLY listed as the beneficiary. If, however, your LLC (which is of course a separate entity from you personally) is the beneficiary (which is what you need in order to gain the desired asset protection), then you must indeed pay the onerous transfer tax:

https://www.pacode.com/secure/data/061/chapter91/s91.156.html

I know a lot of people write on here about transferring title to an LLC after closing. I'm curious - is everyone paying the transfer tax when they do this? It's particularly onerous in Pennsylvania, which charges a transfer tax of 2-4% of the property's value, depending on which PA jurisdiction (I believe this to be one of the heftiest transfer taxes in the nation).

There are a few cases in which you don't need to pay the transfer tax, but transferring title from personal name to LLC is NOT one of those exceptions. According to (c)(1) below, if you were transferring the property into a living trust (per the St Germain Act), the transfer WOULD be exempt from transfer tax IF you were PERSONALLY listed as the beneficiary. If, however, your LLC (which is of course a separate entity from you personally) is the beneficiary (which is what you need in order to gain the desired asset protection), then you must indeed pay the transfer tax:

https://www.pacode.com/secure/data/061/chapter91/s91.156.html

We should also have a pinned thread for "new to STR"

When I look at financing options for an LLC, I see that rates tend to be a few percentage points higher. But I also see that LLC loans tend to require 20% or 25% down. Anyone know of LLC lenders (lenders who lend to LLCs) that will accept only 10% down or 15% down?

What kind of verifications do you require from your STR tenants before they stay? I'm talking about people who booked via Airbnb, VRBO, etc... Do you request that the tenants send you a copy of their driver's license? Do you request their email address and phone number? Do you require the tenants to sign a separate STR lease even if they booked via Airbnb, VRBO, etc?

So I know there's been some discussion here about whether or not Fannie Mae permits STR during year 1. Even if they now do, some lenders are still behind the times or, bottom line, lenders are still allowed to make their own rules so some lenders are not permitting STR during year 1 still. Anyway, when you obtain financing for a new purchase, you have to show proof of insurance in order to close on your loan. Many people here use Proper Insurance (or other STR-specific insurance).

I'm very hesitant to show my lender that Proper will be my insurance company for his house bc my lender has been quite adamant against me renting during Year 1. And if my lender sees Proper as my insurance, it will be quite evident what I'm doing as they specifically insure Airbnbs/STRs. So I'm considering carrying 2 insurance policies for year 1: getting a bare bones home insurance policy from a traditional insurance company (Allstate or State Farm, etc) and also getting a Proper Insurance policy over top of that to ensure I'm covered for STR-specific stuff. Then after 1 year, I can cancel the Allstate policy and keep only Proper Insurance.

Anyone else run into this and what did you do?

Hey, I'm considering buying a specific property that is being run currently as an STR. The Airbnb and VRBO listings have dozens of 5-star reviews and very high ratings. As part of my offer, I requested that they transfer those listings to me at closing.

When the sellers saw that request, they bumped up their asking price significantly. So I ask you this: what is the monetary value of buying great Airbnb and VRBO listings? How much extra would you pay for a house IF it comes with stellar Airbnb and VRBO listings?

These listings should significantly increase first year revenue, right? I mean, you should be able to get a lot of bookings from Day 1 compared to creating a listing from scratch. So seems like there’s quite a bit of value in buying these listings, even at a high price tag?

Like, a property that earns $50k per year might only earn $30k in year 1 if you have to delete and recreate the Airbnb and VRBO listings, right? In that case, the online listings are essentially worth $20k, right?