All Forum Posts by: Account Closed

Is there a good App/software free or paid that I can use to neatly track all my mortgages and property performance metrics? Looking for something that shows me how much loan remains to be paid, equity etc

Thanks in advance!

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Hi All!

I am buying an Airbnb investment property with a friend in a State neither of us live in. We are placing 50-50 capital and will be 50-50 split in profits and losses. I will be 100% the decision making partner of the two with my friend being completely passive. Will be spelled out in Operating Agreement.

I am planning to run this by an attorney but wanted to get some advice from some of the experienced people on here first.

Do I need to form an LLC or just spelling everything out in an Operating Agreement will suffice? The property is a SFH so bank will not allow it to be held under an LLC and will go under both of our names. Operating agreement will be setup TIC. In this scenario, is formation of an LLC necessary? (besides the liability protection benefit- which is big. But putting that aside). Is it absolutely necessary for tax purposes etc? Any input appreciated before I get attorneys and accountants involved.

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Originally posted by @Joey Morea:

@Mohammed F.

Is that with furniture expenses built into your numbers . If you are buying new construction you will have to fully furnish so that will be another 50-75k at a minimum. Really 75-100k if you want to do it right and get the style and theme the way it needs to be. 67% will be a high occupancy with an averaged furnished house. Again it all comes down to theming and cool factor. Look on VRBO and see how many homes are for rent to get an idea. There are a lot of options for resale that will save you at least 100k and if your renting who cares if it’s new or used it will be used the first time someone rents it!

Hey Joey - this includes the cost of full furnishing. $58K. Very professional furniture with high end Disney and universal themes.

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Originally posted by @Todd Goedeke:

@Account Closed is the property management company in any way financially related to the construction company or listing RE company? Would the PM agree to lease the property from you via a master lease?

At 65% occupancy using comparable nightly/weekly rates in that area,what would your net return be before subtracting any mortgage costs?

@Todd Goedeke - the Realtor involved is going to be the property manager as well and has a company that operates successfully in that particular STR community. He owns several of these buildings as an investor as well and has shown me evidence of excellent occupancy rates so far for all his managed properties there despite Covid. I am not sure I understand the master lease idea you are suggesting - can you please elaborate?

At 65% occupancy rate my NOI would be +$26,400/yr (Positive). The net cash flow after mortgage and all expense payment would be -$3400/yr (Negative)

I start getting positive net cash flow after 67% occupancy rate.

How does the 67% occupancy number sound and compare to your experiences? Please advise- I’m under some time constraints.

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Originally posted by @Michael Baum:

Hey @Account Closed, is this community setup for vacation rentals? If not, does the HOA allow STRs?

Yes - this is geared specifically for STR. Zoned for it. 100% legal. I confirmed.

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Originally posted by @Jon Crosby:

@Account Closed Always have exit paths available, it's great if it cash flows as an STR (on paper) but the true test is if it will still break even as a long term rental if you have to convert for some reason (COVID, STR regulations, etc.). Additionally, make sure you don't over-leverage and put yourself underwater if you have to sell as another exit plan.

Also remember, new construction always costs twice as much and takes twice as long in reality versus on paper. ;)

Best of luck to you and stay safe and healthy!

All good points. Thank you.

For clarification - These new construction buildings are in a development Close to Disney with a resort like community with a HOA. The construction is already completed and should be up and running soon after purchase. I did some shopping around the development and see resale properties at the same price as the new construction properties (they are all cookie cutter). Does that change anything for you guys?

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Hi everyone,

I am considering buying a new construction short term rental zoned 9 bedroom property in Kissimmee, FL. On paper the numbers I'm being shown look good despite Covid (management company is great!) What are people's thoughts on this given the negative impact of Covid-19 on the international destination Air BnB properties? I have heard that domestic STR are doing well during Covid but International Tourism based STR are hurting - like Orlando/NYC/SF etc.

I just want to know if I am making a bad investment and should look elsewhere. I’m considering it because they are giving incentives on the new construction purchase with discounts given Covid. It would be a property around $600K. The solid property management company work leads to excellent returns based on nearly 90% occupancy despite Covid but I wonder what would happen if that PM company goes under or changes management or whatever. Will I be stuck with a low performing 9 BR Orlando high tourism based property hurt by Covid? Any thoughts on this matter is appreciated.

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I am finding Neal Bawas material to be extremely helpful so far. Very impressive.

Thank you everyone for your input above!

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Originally posted by @Bryan Hancock:

What is your motivation for buying more units? Is it ego? If so reassess your strategy and your reason why you're doing what you do. The goal is NOT the optimize the number of units. Your goal is to optimize the after-tax profits net of risk AND net of time you have to impute into your so-called "return" metrics. If you invest 100 hours in pursuit costs and 10 hours a month managing something actively in semi-perpetuity that's not the same thing as investing passively, collecting checks, and doing something else of value with your time.

You first need to get clear on your goals and then you can figure out the optimal path. There are literally thousands of tradeoffs between something "large" and something small that you can more actively control without undue influence from outside partners. The more investors you involve the more complexity you'll have and the more likely it will be for you to have conflict with them in some fashion when life unfolds in a manner different than what you expected when you signed the LLC docs. This need not be intentional either....life has a way of deviated from plans.

Hi Bryan,
Goal is to build a large portfolio to create ancillary income at retirement when they are all paid off in 25-30 years. Additionally to shelter current income from taxes.

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Are most people syndicating deals ultimately selling the property for the profit immediately after stabilization or are groups of investors on here holding these assets for the long term?

I ask because my goal is the latter and I wonder if most people on here are in it for the former and would be looking to keep their money rolling from deal to deal.
Long term buy and hold must have a lot of challenges if multiple investors are involved in a big property

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All Forum Posts by: Account Closed

Account Closed has started 8 posts and replied 16 times.

Post: Software/App to track RE portfolio?

Post: Co-buying investment property: Is LLC necessary?

Post: Buying STR New Construction during Covid?

Post: Buying STR New Construction during Covid?

Post: Buying STR New Construction during Covid?

Post: Buying STR New Construction during Covid?

Post: Buying STR New Construction during Covid?

Post: Multifamily Courses - Brad Sumrok or Neal Bawa?

Post: Joint Venture (More Units) vs Solo (Less Units) advice

Post: Joint Venture (More Units) vs Solo (Less Units) advice