All Forum Posts by: Ryan Moyer

Expensify and Stessa.

Stessa will let you easy open a bunch of bank accounts now and do cash management directly.  And with 3.37% APY on a checking account too, which is pretty sweet.  And 1.10% rewards on the debit cards that of course tracks easily.

I was just checking out Baselane.  Haven't used it yet.  But similar to Stessa where it has the banks accounts and all the automatic reporting stuff.  Prettier interface than Stessa and lower APY on the bank account.

Quote from @Karah Kramer:

We're not opposed to talking to the existing PM, particularly since it would be smooth to keep the existing relationship in place, but we don't want to be locked in. 

This is something you need to decide ahead of time, so you can include language about it in your offer.  Most management companies have contracts that hold the owners by the balls, and canceling the bookings is going to mean a penalty will need to be paid to the PM.  You're going to want to make sure that is an expense for the seller who hired that PM (and it should be a drop in the bucket to them with the cash they're making on the sale if they didn't buy recently), not a liability of yours.

This is also a good lesson on why, when you do take over the place, you either self manage, look for a manager that is willing to do a co-hosting setup where you still own the bookings, or if you do decide to go the more traditional PM route, examine the part of the contract that covers these things when choosing the manager rather than focusing on just commission and skimming over the rest.

 A lot of management companies set up their contracts so it is as difficult and expensive as possible to leave them.  You want a manager that you stay with because you're happy with the job they're doing, not one that you stay with because it's too much of an expensive PITA to leave them.

Lol people here have such an over the top hatred for arbitrage.

Why would you need to charge a premium for arbitrage?  Most arbitragers cover maintenance issues while they're arbitraging it, and the place generally stays in MUCH better shape with cleaners in and out of the home several times every month to clean and check up on things.

I wouldn't need to charge a premium to not have a LTR tenant in there cash flowing $100/mo for two years just so they can leave the place with $2000 worth paint needed, $650 for carpet steaming, and another $2000 of surprise repairs at the end of their lease.

Quote from @Nathan Gesner:

Man, this is tough and one of the reasons I warn against investing in an HOA. My first investment ever was a little townhome in 2004 that I bought for $67,000. Three months after purchase I received a notice that my HOA special assessment of $4,000 was due. The HOA President showed proof that she had informed my agent several times of the special assessment coming up and even provided him a letter that he could share with me. He never told me about it.

Unfortunately, my agent was my father-in-law.

 Oh man that creates an awkward situation, lol.

Check the numbers more closely, but my impression owning and managing several properties in the market is that a pool in Orlando is like a hot tub in the Smokies.  It's a basic minimum necessity.

Quote from @Michael Baum:

Thanks @Jeremy H.. That does make sense. On the SP500 tracker, you mean like a mutual fund or something like that? I hadn't thought of that as a way to pay for upcoming expenses.

Yeah I'm assuming he just means you invest the capex in the SP500 while you wait for a repair/assessment instead of letting it sit in a bank account.

Not as awesome if your special assessment came right now while the market is down, though.

Quote from @Todd Chandler:

2.  For those who have clients who prefer that the payouts from the OTAs come to them and then they pay your management invoice at the end of the month, do you have your client directly pay the cleaner and handyman for their work or do you pay them and then invoice the client?

I just bill them for the cleaner and handyman costs when I send the invoice with my co-hosting fee.

Quote from @Collin Hays:

You will also lose a lot of money over the course of a year due to opportunities lost, and opportunities cost.  

Case in point:  We had a guest check in on Sunday to one of our cabins.  A weeklong stay.  But their modem went out which meant no internet or TV.  So the stay was in jeopardy.  First thing Monday a.m., our manager drove 120 miles round trip to Knoxville to the Xfinity store, and had everything up and running by about 2pm.  I am 1,100 miles away.  Had I been self managing, I would have lost the $1800 stay and been struggling to get a replacement modem installed.  That's big money to me.

A PM can fix things immediately that a self manager gets to fuss over remotely, while their rents are in jeopardy:  Refrigerator, oven, microwave, dishwasher repair, heating/air issues, rodent infestations, lock-outs, TV/internet, plumbing, septic, snake in the house, broken chair or table, tree fell over into the driveway, you name it.

Everyone wants to say "Gee I'm saving all of my PM fee by managing myself."  That may technically be true, but there is a lot more to that story.

She lives 30 minutes away so she could just as easily pick that modem up herself.

But that's not even necessary.  I live 2000 miles away from one of my rentals and I would've had this handled in 15 minutes.  Heck, it wasn't but a month ago that I replaced a fridge at 2:00am the same night for a guest that had a bunch of groceries and an ice cream cake for a 5 year old's birthday party that they didn't want to lose.  From 3 timezones away.

30% is a lot.  Though different depending on how much the revenue actually is.  Probably worth it to look at the actual dollar amount and figure out if that amount of work is worth it to you.

If it's doing $20,000 annually then maybe the $6,000 is worth it to you to have it be completely passive.  If it's doing $100,000 annually then paying $30,000 for something you could do yourself for a lot less than $30,000 worth of effort.

It sounds like you're planning on managing some other listings already anyway.  I don't think it makes sense to have 1 of multiple properties passive when the rest are going to be active anyway.  Especially for 30%.  The hard part is getting everything figured out.  Once you have that, adding another property isn't that much more work.  So if you're going to be doing the hard part anyway, why pay $30k/yr to avoid doing the easy part?

Maybe see how it goes with the new listings you're planning on doing and once you're into it, if you've decided it's not that bad to save an extra $30k or whatever it is, you could pull the trigger on this property at that point?

Quote from @Mark Miles:

Quote from @Wesley McDavid:

Good day everyone!

I wanted to run this creative deal by folks and get some input as to whether or not it seems fair for both sides.

A partner and I are going to invest in a short term rental together. We are looking for a property with a large house to be the rental as well a small unit for her to live in (adu, cottage, etc.).

She will live on the property keeping an eye on everything, as well as doing all the cleanings, assisting with check in/ check out if need be, and any light maintenance. Since this will be her primary residence we will utilize an FHA loan at 5% down.

I will be supplying the capital for all down payment, closing costs, furnishings, and reserves.

Instead of rent, she will pay me back for half of the down payment and closing costs over 2 years at 0% interest.

After 2 years we will both be 50% owners of the property.

With this arrangement, does it seem fair to split the profits of the rental 50/50?

Me: --All start up costs  --listing, web based messaging with guests  --good income and credit

Partner: --FHA loan --looking after property --cleaning --listing, web based messaging with guests

Of course there are many other factors to keep in mind but these seem like the major ones.

Thanks for any insight, advice, or concerns.

Stay Well

 No way. Would I give my cleaners & handyman 50% ownership of my properties? No way! Be the 100% owner & hire her or someone else to clean & fix stuff at a reasonable hourly rate!

 Well in this case the "cleaner/handyman" is also paying 50% of the price.