All Forum Posts by: Glenna Wood

Cash flow is always property specific so as mentioned your location is a huge factor. Focus on your big picture. Buy a multi family property in a good school neighborhood and owner occupy it. Buy it with an easily assumable loan like FHA. Then you can pass it on to the next start up investor when your goals develop. The rents on the other units will cover your mortgage/personal housing costs which is a big boost. Overall always live below your means. Limit your $$ in depreciating assets like cars. Take advantage of a self employed retirement plan as soon as you can.

The key point to me is that if people and a supportive, control oriented local government are grumpy about STRs now, where are they headed in the future?? Why sign up for a long term fight? Stick to areas that appreciate and support  tourism. 1031 now while you can.

I completely agree with Anand S. If you aren't locked into OBX, I would buy in FL vs NC since it's a year round market. And I would choose the Gulf over the Atlantic because the beaches are nicer. Throw a dart. You could make money just about anywhere on the Florida coast.

Suggest you speak with property managers on the performance of the oceanfront mega houses with 6+ BRs. I don't own one and it's not a market I watch carefully. I own first tier Beach Rd. I have heard stories that the 8+ BR crowd gets more unrelated party groups vs families, hence, more wear and tear. Go out to some rental web sites and look up calendars on various sizes oceanfront houses. I believe you'll see many booked already in the $10-15k/week range. Do keep in mind that this is a heavily single season market. Few snowbirds like the southern market. 

Search the web site and you'll see that there are few oceanfront lots listed around $1M. Undeveloped parcels are pretty rare unless you go north to Corolla or head south of Nags Head. I don't think you can arm chair the build/no build or the 6 vs 10 BR decision w/o eyeballing specific properties and their actual performance numbers and then line that up with your objectives. At your price point you have many choices.  And do heed Herman Hall's statement above. Sellers will share gross rents but actual op expenses stay under the radar. It will be more than you think. The weather is brutal on houses. Good luck.

If you want a rental machine and can afford it, oceanfront is they way to go IMHO. Get the biggest house you can find with a pool, hot tub, game room, elevator, private bath/BR. A general rule I've heard for years is $10k gross/bedroom and as already stated more BRs spread the cost of the house systems. Once the house is 6 BR+ you have to double up on frigs, dishwashers, HVAC systems, etc. 

Beware of buying an oceanfront house w/o a pool with intent of adding it. Lot coverage restrictions in all three towns is very tight. Some get listed as "room for a pool" but once surveyed and a site plan is worked up, there is not enough SQ ft left or you end up with a bathtub pool and tiny pool deck. Newer construction  is better with Polywood or Azek decks and trim and Hardiplank siding.  But I wouldn't ignore a cedar shingled vintage Nags Head house that has already survived years of brutal weather. Lots of shoddily built 70-80's houses are out there. The building code is much tighter now as it should be. There are many quality builders just not many oceanfront lots left.

As far as a 6 BR oceanfront vs a 10 BR first tier, that's a house by house decision. Many first tier in KDH have large oceanfront hotels or condos in front of them with zip ocean views and access shared by too many people. With the big dunes in NH, only the top floor will have an ocean view. Plenty of good agents can help you with comps. REMAX Surfside has an excellent web site for research. 

I hate the traffic and one road access and so would not consider Duck or Corolla. Have friends who own and love it there and consider my KH to NH preference "slumming". Likewise Rodanthe south access is more vulnerable and too far from the amenities my family liked. If I was purely investing, I would consider those areas too. Good luck and enjoy the search!

No

You are considering a BIG stretch of coast and each will have its fans. I've had Panhandle beach property since '92. Key is what kind of beach experience do you want? They are not one size fits all and each will have it's strong points.  Do you want lots of typical developed beach activities (shopping, water parks, loads of restaurants) or quiet, laid back family  beaches and fishing? Destin and PCB have name recognition but east of Panama City is the "Forgotten Coast".  If you are set on a condo, check Panama City Beach. If you want quiet, uncrowded beaches, look east to Mexico Beach or St George Island. Mexico Beach was badly beaten up by Hurricane Michael in 2018 but there were very few condos to start with. Businesses have been slow to recover but prices have accelerated sharply since COVID.  St George Island is unique in that the center of the island was platted in the 60's with 10' public easements between each gulf front house. To me Destin is too much stucco and too south Florida and overpriced. You can drive for miles and not see the Gulf due to private developments and courtyard type walls.  So the first tier houses on St George have outstanding views and access. There is little commerical development and only a few condos. The rental market is solid. Apalachicola is a historic town that is very Old Florida and becoming a boutique destination. Again Mom and Pop businesses and a few condos redeveloped in the old waterfront buildings. Port St Joe is similar but also has a super marina with good charter fishing opportunities.

Factors to consider in all areas is the cost of flood and wind insurance and the age of the property. Salt air and hot sun are brutal on houses. And check property taxes. The more rural counties have less diverse economies and rely heavily on tourism so the beach areas can be taxed heavily. Franklin county is higher (SGI), Gulf (Port St Joe) and Bay (PCB) are lower.

Ideally plan a road trip and spend a day in each area to get a feel for which beach fits your needs. Several RE companies have good web sites that have loads of more specific details. PMs charge 15-20% in the smaller counties. Big condo developments in PCB will be more as prior posters have stated. With my job, I used PMs for years before STR was even a term and still have had my beach vacation rentals fund my now happy retirement.

I could natter on for pages. PM me if you wish. Good luck and have fun searching!

Both IRA types can be rolled into self directed IRAs but they cannot be combined unless you also do a conversion to a Roth at the same time. Set up a "checkbook control" LLC in your SDIRA if you are going to buy real estate with it. You can't do any self work on the properties since this would increase the value of your property via sweat equity so you will/may need a property manager for rentals (get advice). There are many SDIRA custodians online so take the time to research their fees and services to pick the best fit. Once your account is established then start the paperwork for the rollover from your current custodian. Make sure you understand the rules about self-dealing in SDIRAs and potential tax reporting situations like UBIT. Some planners advise against active rentals in SDIRAs.

Yep, Zinus or Spa Sensations on Walmart.com. These are a great buy. 12" for sure, skinnier for bunks.

Yes. The rates for loans on unimproved land will generally be higher with possibly shorter terms than for houses.