All Forum Posts by: Matthew Malley

@Brian Gerlach Great question. I don't know what the next move would be. If I were to sell I'd probably have to look into new areas to STR. The area I'm currently in is overpriced and going through a ton of regulation/ordinance changes so a 1031 would be very difficult.

This definitely helps put things into perspective.

@David Vélez great advice David, thanks. My issue is in more rational times, people will not be willing to pay these amounts for my unit. But the cashflow is good.

@Brian Gerlach thanks for the response and lol to the barber reference! She actually sounded hesitant since I brought it to her.

There is very limited inventory in the communities that we want and the prices have sky rocketed due to the demand from NYC and Philly people looking for vacation homes. The numbers don’t make sense right now for another place IMO.

Debating on the best course of action regarding the current place.

@Vincent Chen We’re in the Poconos Mountains in Pennsylvania.

My STR market has appreciated significantly due to Covid and I am trying to evaluate the best way to move forward. I bought a STR in January 2020 for $170k. Since Covid, the area has exploded in STR rentals and home values since it close to several major cities. We did $60k in revenue in the first year and are happy with the monthly cashflow. Our goal was to continue to save to purchase another one in the community, but not at these current market top prices. Since it is more of a vacation area, the prices have sky rocketed (bidding wars,etc) and units identical to mine (townhouses all connected) have been selling around $350k - my realtor thinks we might be able to push it to $400k. I'm a bit torn because these prices are unsustainable, but I don't know what the next move should be. Take the money and wait/go to another area or stick with the cashflow and see the prices come back closer to value.

Any input is appreciated! 

I recently started a STR business with two other partners and was looking for advice on how to structure the business. I've done a lot of reading into this and have seen the topic has been covered but I'm still looking for some clarity. One of my partners already has a primary residence and rental property but I personally still do not have a primary residence. If all three of us were on the mortgage, how would this affect my ability to get a favorable mortgage on my primary residence in the future? Between three people it seems like the DTI would be low but it would essentially eliminate me from obtaining first time buyer rates/mortgages. The partner who already has his primary residence seems to be okay with putting, at least the first property, under his name and having a separate legal agreement with us. But moving forward, it seems like inevitably I will have to be on a mortgage if we move forward with other purchases.

We plan on purchasing several properties over time but I'm unsure of the best way of starting the business from a structural standpoint. The other alternative seems to be putting the business under an LLC but some have said it might be best to start as a 2nd home and then form an LLC later and deed it over to the LLC. But doesn't that trigger certain clauses and taxes later on?

I've been reaching out to attorneys in an attempt to get more information on this, as well as drafting an operating agreement for us but I haven't gotten any response yet. We're in a bit of a time crunch and I've seen some solid information on BP so figured I'd put it on here to have a better understanding myself prior to speaking with the professionals. 

Thanks in advance to any insight. 

@Account Closed 

Thanks, Daria! That definitely seems like the move for SE Florida. I am going to have to take a look and see if I can find similar properties to the one you mentioned. I’m not to familiar with the area and it seems some have pretty high crime so trying to steer clear of those. 

Thanks @Pavan Mediratta and @Emanuele Pani! Very helpful information. I think I definitely have some more research to do. Maybe Florida, in my current economic state, isn’t the right move for me. The regulations and cost might not be the ideal situation for my Airbnb. I’m in this in between of do I keep saving and get a nicer place ($300k) or do I jump in another area ($200k- maybe Carolinas?) with the money I have and get started? 

Thank you guys! I'll definitely take a look into the HOA laws to see if I can get more clarity

Hi everyone, 

I’ve been looking to get into vacation rentals and would like to hear from some people that might have had similar experiences. I’m from NYC so I was looking to go to Florida where the market is a bit more accommodating! I have a little bit of money saved up and after doing reasearch on various areas in the state, I’ve narrowed it down to Fort Lauderdale/Hollywood/West Palm Beach - in that order.                           In terms of my location in the NE, the SE area of Florida makes the most sense - although the emerald coast was extremely tempting. Looking for anyone that has experience in those areas especially from a legality standpoint. It seems as if Fort Laud might be the most accomadating legally and since the demand looks better for smaller places. I’d be looking at 1 BR with some sort of water view unless someone has positive experiences without a water view. Are there any areas that I should stay away from? Really trying to narrow down the areas and see what work numbers work best. I’d be mainly using it as a VR but also will like to use it for myself on occasion. Any and all feedback would be greatly appreciated! 

Thanks,

Matt