All Forum Posts by: Ryan M.

I've wondered that myself. In our area (Asheville, NC) AirBnb is really not as popular at HomeAway/VRBO so Airdna doesn't have enough data to be accurate. 

One thing I have done is ask local vacation rental management companies for quotes. They tend to have quite a lot of data and will tell you how much revenue you can expect to make from a given property. Then you can do your own math depending on your own expenses to calculate what your return might be. You'll also learn a lot about what your competition is doing in the process. It's a rough estimate but better than just going by nightly rates and occupancy from HomeAway listings. 

@Jody Schnurrenberger Thanks for the moral support!

@Andrew Postell Thank you for that idea! I just wrote them to ask. I agree someone should have picked it up. Actually this same lender approved me for my last deal in April and the issue didn't come up then because that time the loan officer didn't submit the business returns and so they didn't ask for the transcript. Ugh. Fingers crossed.

Hi Y'all, We are trying to close our third deal. It's a cabin near Asheville, NC. We were supposed to close tomorrow, but the lender called last minute and said our business tax return transcript came back rejected. After hours (HOURS) on the phone with the IRS, we discovered our accountant, who we fired months ago, neglected to ever actually file them. 

So. 

We filed them today but they say it takes 6 to 8 weeks to get a transcript back. Our lender says it could take less time, but I think they are trying to guard against us going with someone else. We had bought flights to fly back there and work on it, and have a hot tub coming and a game barn ordered and have renters already signed up blah blah blah. The short of it is, if I wait 6 to 8 weeks, I'm out probably at least 3-5k. We've asked about owner financing and that was a no go. 

Should I shop around to other lenders that might overlook the lack of transcript? (the personal one went through fine, just not the business one, income isn't an issue) Or do I suck it up and just eat the lost money?

For our market Christmas and New Years are huge money makers, so it would really pain me to close the first week of January.  

FWIW, we're getting near 30% coc return for our first deal, another nearby cabin. The second is in the middle of rehab. This one we are expecting 20-25%. The prices here are pretty good for the rents you can charge. 

I'd really appreciate any advice anyone has to give. 

Hi NIcholas,

Thank you for your service! You've come to the right place. People around here are very friendly and have a lot of experience. 

I'm relatively new but I have a few years of vacation rental experience and I've looked into buying an investment property in Hawaii. There is a huge market for short term rentals there (AirBnB and HomeAway etc.). If you are willing to go the big island you can find a lot more affordable options that will still rent really well. Oahu is much more expensive unless you go to the leeward side which isn't as tourist friendly. If I were you I might look into a duplex or triplex in Kailua-Kona on the Big Island, living in one unit and short term renting the other units. Best of luck!

I'm new at this but if you look up Clint Coons on YouTube and Anderson Business Advisors they have a lot of info on this. You need to create a land trust, deed the property to the trust and place the trust in the LLC. Then the lender can't call the loan. If someone sues you they absolutely can get to everything you own. The point of the LLC is compartmentalize the risk. If they sue you they can only go after that LLC (if you've followed the LLC rules correctly) and not after your other LLCs or personal assets. And a lawyer is much less likely to pursue a case with very little available to go after.

Thank you for that correction! In my case I would have needed the 30 days this time because I'm waiting on funds from another closing out of state, but of course that makes sense that a shorter dd period would make a stronger offer. I'll add that to mix for next time. Are there traditional lenders in NC who will close that quick or would that need to be cash or private/hard money? Thanks for taking the time to help out a newbie...

UPDATE

The sellers accepted the other buyers offer. It must have been close to asking because we didn't even get a chance to outbid them. Good educational experience though! Here's the link to the actual listing in case you're interested... http://www.realtor.com/realestateandhomes-detail/4...

Well so much so trying to keep the property anonymous! A lesson for next time I guess ;)

Thanks for the input! I'm taking the repair and utility estimates directly from the last three years of schedule Es on the property. If it were me I would be taking every little deduction I could on the schedule E so I do think I can trust them. There are window units and baseboard heaters so I don't see huge capex issues there. Inspection would tell me more about roof etc. and I would adjust the offer at that point. But I could still be low on repairs, I'm not sure. I don't know about the water yet but I would definitely look into installing some kind of sub meter, though in this area it's common to have all utilities included.

Let's connect sometime- It looks like there's not too many BP people in the area and it would be great to stumble through with some other folks, even other newbs.

Hi Folks,

I'm a newbie and my few deals have been on the vacation rental side but my brother and I want to partner up for some buy and holds in the Winston Salem and Greensboro area of North Carolina. We've been looking for a while but haven't really found anything where the numbers worked. 

This quad came up a few days ago on the MLS. It's in excellent condition. I put some rehab costs in the calculator just in case but from a visual inspection it really doesn't need anything. The rents in that area for a 2 bedroom apt are usually more like 600-700 and three of these units are rented at 435 while the fourth is vacant. I think I'm being conservative by assuming we can bump those up to 500. Electric is paid by tenants, water/garbage by the owner.

The owner died last month and they want to get rid of it fast, but they already have an offer on the table. They didn't accept it immediately so I assume it's fairly low-ball. I think whoever offered is somewhat savvy because I had to do quite a lot of sleuthing to figure out the owner had died since it's actually owned by a trust. 

 They are asking 145k, we are putting in an offer of 120k but I know we will get a "give us your highest and best" next. My question is how high do we go? I'm thinking 130k since there's some uncertainty involved and I want to be conservative on our first deal. I should add that in NC a 30 day DD period is standard and during that time you can exit for any reason, so we have plenty of time to catch any mistakes.

Also there are almost no comps in the area so it's really hard to tell what its worth. And ideas on how to deal with that?

Here's the BP report. I took out some identifying information in case my competitor is lurking around here so don't pay attention to the address on there ;) https://www.biggerpockets.com/calculators/shared/7...

Thanks so much for your help, you all are amazing!

Ryan

Thanks Henry. Actually he has it set up so HomeAway handles all the money, so deposits have been collected by HomeAway, not the owner. So for me to keep all the bookings under his account I would have to trust him to pay me later. Or sign some kind of contract, but since we would be breaking the HomeAway rules I assume it wouldn't be legally binding. Such a hassle. You'd think HomeAway would have a better plan for this situation. I called and after being on hold for 45 minutes got someone who was totally unhelpful. No wonder AirBnB is taking over their market share.