All Forum Posts by: Peter R.

If you're interested in Florida Direct Beachfront Property in Brevard County / Space Coast Area let me know.

Looking to sell one or more of a portfolio of properties.  All are 5 Star Airbnb/VRBO listed with a large book of business and repeat renters.  Airbnb Superhost status and ground team in place for turns/maintenance.

All new interiors, new Roof, updated electrical and plumbing, new Deck and Dune Crossover w/ Stairs to the beach. All furnishings, appliances, electronics and future rental income already booked conveys with the property.

3 Unit (2bed/1bath each) on 1/3 Acre.

4 Unit (1bed/1bath each) on 4/5 Acre.

3 Unit (3bed/2bath, Two 1bed/1bath) on 1/3 Acre.

Each property owned by a separate LLC and currently operating as a fully licensed Vacation Rental with Brevard County and the State of Florida.

@Wendy Vaidic is correct about Melbourne Beach and Indiatlantic.  

Melbourne Beach is very STR friendly, as is unicorporated Brevard County. Essentially anything in that tax zone rather than a city is STR friendly because Brevard County is friendly.

You'll still need to pay taxes to Brevard and to Tallahassee, of course.  Plus you'll need an operating permit from the Florida Department of Professional Regulation.  And, depending on your water source, a well permit and quarterly testing for the Brevard Health Department.

All the permits total around $500/year.

I own several units in the Melbourne Beach/Space Coast area so I'm familiar with the local laws if you need some more info.  But you can just write off Indiatlantic, Cocoa, Cocoa Beach, Satellite Beach and a few others, you'll never get approval and they do check occasionally.  But make sure before you dismiss a property that it's actually in that taxing area, many times it isn't, even if the address is in that city. 

Is anyone doing STR on boats at all? This is somewhat of a small subset of the STR business, just wondering if someone here has had any experience or success doing this. Mainly interested in docked boats, not anything where the guests would have access to actually attempt to move the boat.

Thanks!

I'd be very interested if you would expand your thoughts on how the 4 Hour Work Week is helping you cut down on your daily tasks @Shawn Ward

I've not found outsourcing helpful in the long run, thus far anyway, looking for insight.

I posted this elsewhere, please forgive the copy/paste!

TL;DR: Low level card tester for a local stolen card ring decides to take a mini staycation, gets the fraud ring busted. Her dogs pissed everywhere, we’re out about $6k.

This was an experience with VRBOHomeaway. I personally think Airbnb’s fraud detection measures are quite a bit better as they seem to have more insight into payments.

We had a guest, let’s call her Parys because her fake identity first name that she used is an equally big city just as misspelled.

Parys booked a three day weekend into the unit and everything seemed fine, she was in the area trying to find a long term place and wanted to experience the area, not totally unusual.

On the second day she sent a message through the platform asking to extend for a full two weeks, which, ok, nice!

She asked to pay with a different credit card than the one on file with VRBO but whatever, that’s VRBO’s problem to deal with, we told her to call them up and ask to switch it out and she did.

Payment goes through, we get notified, all seems great.

Nope.

Five days into her stay we get automated notifications from VRBO that the payment had been reversed and they took the money out of our account.

Card was stolen.

Called up VRBO and they are less than helpful, point us to their third party somewhat shady payment processor. Processor says, “Yep, card’s stolen, you should escort her out.” No help beyond that, we’re on the hook for everything.

I should mention this was quite a few years ago and Airbnb has since forced VRBO to step up their host support game via Airbnb’s host guarantees and whatnot.

Anyway, we contact our lawyer and he walks us through how to get access to the property and abide by state law regarding transient housing as this was not a tenant but a guest and the laws of the state are quite landlord friendly in that case.

Local property manager gains access, she’s not there. In plain view on the dining room table was a notebook full of credit card numbers.

Manager nope'd the hell out of there and calls the Sheriff.

They show up and ask permission to enter the property, we grant it immediately and they go about collecting everything that is evidence of her crimes.

Manager snaps a photo of one of the notebooks full of card numbers on the way out before the Sheriff arrives. Full of card numbers and crossed out card numbers with notes like “Declined at Panera 10/6, and Declined at WalMart 10/14, etc.”

Turns out she was a card tester for a local stolen card ring and apparently she just decided to use one of the stolen cards for a mini staycation.

She shows up while the Sheriff is collecting evidence, gets arrested. It becomes a black hole of a case but the Sheriff’s Office says they got quite a bit to move up the line on her theft ring.

The DA declined to prosecute her on charges of Defrauding an Innkeeper which, surprisingly, has quite a hefty fine attached. We'd have never seen the money anyway even if we'd won but I'm still salty about that.

In the mean time, her dogs (we’re a pet friendly rental) have totally destroyed the place even beyond the quite nasty conditions she was living in, even after she had been living only a week in the unit so far.

Two urine soaked mattresses, a destroyed couch, hopelessly soiled rugs and towels, broken plates, furniture, etc, etc.

Between the damage and the lost income we’re out about $6k, not enough to file an insurance claim and make it worth the possible rate increase after the deductible.

Unit was out of service for 3 days just to clean and replace items.

VRBO’s response? ¯\(ツ)/¯

Sadly though, we’re still using VRBO, they make up the bulk of longer term older guests who like to stay for weeks at a time. Airbnb is very much the younger, more last minute crowd.

I agree with others, I think that if you don't already have smart themostats it would be a good investment @Kevin Boyd but I somewhat disagree with @Mike Anderson we still have Nest in some units but overall, Ecobee has proven a better experience, for us anyway. 

The Ecobee lite has all the Nest features and fewer drawbacks just in our experience. I'm sure others prefer Nest over Ecobee.

They also make devices that can be wired to shut off the HVAC when certain doors are opened. That may be something worth looking into.  We don't have them but I've seen them implemented, particularly on sliding glass doors.

I follow a minor variation of what was suggested by above by @Paul Sandhu in that I don't do deposits and I charge a combined cleaning and damage waiver for all guests.  

For a $250 fee I cover cleaning and damages for each reservation.  The vast majority of times our guests damage nothing and cleaning is routine.  For a vanishingly few stays we have to do a deep clean or replace linens, or something like a folding chair or portable dinner stand.  Things that a person who has had too much to drink would break, for example. It is a Vacation, after all. :)

Overall, however, we find that guest prefer to pay up-front for all of this rather than have to go through the pay/refund cycle or the hassle of 3rd party insurance offered by Airbnb/VRBOHA. After implementing this change we cut our 2nd line questions in half, meaning that after an inquiry we had at least half of the guests asking if the deposits were non-refundable or not, now we just book, no 2nd line questions about that at all, they get it.  I think it's due to the familiarity of people with damage waivers on car rentals, for example, same concept. 

Added to that, it's pure revenue to us, we're way ahead on this deal as we rarely have damage. I hope that helps @Jessica Smith

As others have said, usually this is a limitation of VRBO, Airbnb gives it on booking and is pretty up front about it.  

Do you have a "trade name" for your STR by chance @Nancy Bachety ?

If you do, and the guest still can't find you, it may be a sign you aren't showing up on things like google maps.  I've found that making sure we show up for our name on google is very effective in putting guests at ease and marketing to new guests.

When it comes to most fees to sell the property, I've never encountered a situation where the buyer paid them @Anthony Wick

Agent commissions are the seller's responsibility, if it's 5% split, for example, it should be a line item on your closing statement paid from the seller.  In my experience it should never be sourced from either earnest money or down payment.

I pay my own lawyer fees, seller pays his.  You could include this at closing or just do a direct bill for yours, up to you.

Out of pocket for you should be minimal, inspection fees, doc stamps, taxes (prorated) and perhaps a survey fee or other misc costs. 

Overall it sounds like the terms are a good deal, I'm not a huge fan of a 5 year balloon but if you've already got a lender willing to take out the previous owner I wouldn't be too concerned with that balloon timeframe.  4% is lower than most commercial lending rates.

We've done several, we usually approach it by asking if they are willing to owner finance and then get them to give us intial terms.  

We always push back on those terms but I won't go too much into detail except to say don't ever pay more than retail rates commercially available, even then I wouldn't necessarily consider it a good deal but no sense paying more than you would at a bank unless the purchase price is just insane in a good way.

Sometimes we personally guarantee, sometimes we don't, depends if the seller's agent/lawyer catches it or not, we never offer.  1 of 4 deals we've done are guaranteed personally.

If I can get away with it I always use a contract drafted by my lawyer, if I can't, I'll use the standard FARBAR (Florida Association of Realtors/Bar Association of Florida) contract.  I am the one buying, I get to draft the contract and if they object to that, we use an off the shelf, they don't get to draft one.

Terms vary but usually we do NN years with a balloon at year N.  Depending on the situation of the seller they usually don't really care what the amortization is, all of our deals are amortized over 30 years.  I highly, highly suggest your minimum balloon is at 7 years, 10 is super nice, 15 is amazing.  If you can get someone to do a full 30 year?  Incredible!

I get to choose the closing agent.  I dislike closers I don't know, this is mostly a personal thing.

Down payment varies wildly.  I've done as low as 10% and as high as 25%.  I've heard tales of people doing 5% but have yet to reach that.

And always, if something pops up, it NEVER hurts to ask about owner financing.