All Forum Posts by: Robert Gilstrap

@Joe S. Many STR operators are in fact "tearing it up like they say" but that doesn't make them stupid. If you are selling money (and as a lender that is your product) then you need to be like any other competitor in the marketplace and be able to compete for that business. Have better terms, lower interest rate, easier to business with, faster funding, lower fees, etc.

You have to differentiate just like we all do. There are a million places to borrow money from right now and all at low interest rates. If you want to make money lending then figure out your niche. what can you do better, cheaper, faster than the other guy. 

Once you figure it out give me a call and I'll borrow from you (maybe). 

Well I'm actually not wrong; maybe we just differ in opinion as to what constitutes "commercial" or I wasn't clear enough in my statements. I never said you should keep a homeowners policy on a rental property (although there are instances where you would still be covered if you did) that's just common sense. I was saying you don't necessarily need specific short term rental insurance to be covered and that a normal landlord dwelling policy just like you have on a long term rental provides coverage. That being said, I agree that having a STR specific policy is much better because of the extra coverages offered that addresses things common to the STR industry such as: liquor liability, hot tubs, jet ski's, golf carts, etc.

@John Underwood   Not true at all that you need commercial insurance to be covered. Does a long term rental have to have commercial insurance? Nope. A rental is a rental and the type of policy required is underwritten primarily based on the activity happening on the property. Insurance companies would like you to think that so they can charge you higher premiums but it just ain't so.

I agree that some companies may give you **** about it and I think commercial insurance is better anyway but there's no law about it. Plus you also might pay hotel/motel taxes or own the property in an LLC name, or have other commercial obligations such as a business license BUT the courts covered that as well by saying those are obligations incident to owning property and still doesn't convert the actual activity being performed on the property to commercial activity. Sleeping, eating, paying bills, doing homework and watching TV are residential any way you look at it.

@John Underwood  The renting of property for residential use has been upheld in multiple courts as a noncommercial activity which makes complete sense if you think about it. People who go to an Airbnb sleep, take showers, watch TV, etc. All non commercial activities. On the other hand if you had business signage up at the house, a front desk manned by employees, a restaurant on site that served food, etc. that would be commercial activity. Don't fall for the ******** that city planners try in redefining zoning issues.

@Joe S. The first thing you should do is read Tarr vs. Timberwood Park Owners Association where the Texas Supreme Court ruled in favor of a homeowner who tried to rent his unit out in an HOA and he won. VERY important case for you.

Do not assume that any HOA automatically can restrict you; I have found almost no HOA has the right language in their covenants to stop you from doing short term rentals.

For instance you said:  

"The city said they are fine with short term rentals the home owners association of that particular property said no rentals less than 90 days."

So my response is NEVER go with what ANYBODY says. READ it for yourself, don't assume anything.  Do the covenants say no leases shorter than 90 days or does it say renting. How is renting/leasing defined?  The reason I say this is people have a very big misconception that allowing a guest stay at a home is somehow a sublease when it is not at all.

Leasing confers legal rights in the form of a leasehold interest and gives occupants certain rights under law.

When you do an Airbnb you are giving a "license" to occupy. Sounds minor but it's a MAJOR legal distinction. Persons granted a license can have that license revoked at will by the grantor for any or no reason. Hotel/Motel stays, campground stays, bed and breakfast, Airbnb, vacation home stays, having your sister stay at your house during thanksgiving; these are all examples of licenses being granted. 

I agree with others that HOA's are not my first choice but don't be automatically dissuaded just because someone says you cant do that.

When you say "legal owner" thats misleading since the legal owner is the owner not the PM. As far as listing sistes like Airbnb, etc. then its standard for the PM to be the one listed.

Outdoor cameras are common at short term rentals and we disclose they are there. Oddly enough indoor cameras are legal in many states as long as they are disclosed and in common areas. Airbnb doesn't allow them but others do. Kinda creepy to me so we don't ever do that.

@Connor Steck I never went to college but what I can tell you is that out of the hundreds of college graduates I have hired over the years only 2 actually worked in the field of their degree so that entire education was wasted in my opinion. People with law degrees who worked as property managers, sports medicine degrees who were salespeople, finance degrees who cleaned houses for me, etc. 

By the way did I mention they all worked for me, the guy who didn't go to college? I make FAR more $$ than they do because making money is not about degrees its about drive, perseverance, self education, taking risks, etc.

Nobody in the real world cares if you have a degree, an employer cares about what can you do to make/save him money, thats it.

@Ken LatchersThe very fact that you can use tubo tax to complete your tax returns speaks to what Wendy Schultz was saying. I have no idea about your personal finances or portfolio of properties but if you're using turbo tax I'm guessing it ain't' huge. Tech tools are wonderful and we should all use them but once I learned that paying experts to work for me actually made me money my life got vastly easier. 

Can you cut your own grass? Of course you can, but you can't do it as fast or as well or as cheaply as a professional. They have the $15K mower, they come with a crew of people who swarm in and get it done super fast, they have the experience of thousands of yards to know what works best, what mistakes to avoid and why. 

I'm a property manager but I don't even manage my own properties. A good PM will make or save you FAR more than what they charge you in management fees.

I'm always baffled at why people look for the cheapest PM they can find to manage one of their largest investments. You get what you pay for. You NEVER hire the cheapest attorney, or the cheapest CPA, or the cheapest Doctor, why in the world would you hire the cheapest PM?

@Amanda Swanson  Hi Amanda, I agree its smart to do all the exterior renovations and rehab now while you're still collecting rent so you less time on market when doing the interior. Plus doing anything major interior is just a waste while it's occupied. Better to have the tenant 100% out of your way so the work moves along quickly. 

As far as the PM involved; it sounds a little weird to me that they have nothing in writing (also illegal in GA) and they're already telling you what they're not going to do but still wanting a 12% premium mgmt fee for it?! Atlanta averages from 8%-10% for long term rentals but you get what you pay for. Is this person licensed? Do they do it full time or is it just a side gig? In my opinion you only want someone who does nothing but property management full time. We see a lot of agents who just do management on the side for extra money but they rarely do a good job.

I'm clearly biased but trying to manage property effectively from another state is not easy and a good PM will save you far more money than they ever charge in fees plus you make your money as an investor buying property not managing it.