All Forum Posts by: Sarah Kensinger

Just bought my first investment property and will be using it as an STR. I'm debating on creating an LLC when listing my rental. Has anybody else done this? I'm doing this to protect me if any accidents happen in/on the rental property and for end of year taxes. Or is this just a waste of time?

@Sarah Kensinger did you find something else to purchase? We have moved on from the condos but having a hard time finding a SFH in price range

@Sarah Kensinger - Ahhh! My apologies...sorry to hear about the deal falling apart!  If there's anything I can do to help as a fellow local investor, feel free to hit me up ~

 @Sarah Kensinger - Congrats on the recent closing!! Sandestin can perform well for sure -- I just never liked how some properties over there will have up to three different HOA assessments. Too many 'Bobs' in my book, lol.

The warrantability piece is always a sticking point.  We had plenty of lenders a year ago that would lend at 10% down on a non-warranatable condo, but they have all dried up at this point.  The best I have with my lenders currently is a 20% down payment option for nonwarrantable or condotels.   

I'll add to what @Kyle Momany mentioned - Creative financing is key in the interest rate environment that we're in. I really recommend that you continue to explore any seller financing, loan assumption, sub2, etc. deals that you can.  A lot of the deals that we closed recently have been exactly those. 

@Villy Ellinger - Can you elaborate on Gulf Terrace? I've sold over there as well, and I've never heard or seen any STR restrictions from the city or HOA level. Where are these restrictions coming from that you mentioned?

 I sold a condo in GT recently and their docs didn't seem to have anything different for me either. Although, the price on them doesn't exactly pencil out at this point. 

Where is Sandestin did you buy?

@Sarah Kensinger the gross rental revenue inland is definitely lower but so is the price per sq ft. So cash on cash return might be the same or even better. Considering the current post was asking about purchasing in a lower price range and with less $$ down, the higher priced properties near the beach will not be in that range and there is no reason why investors should be excluded from the STR market or have to wait years until they can "save up" for a large down payment. The best way to save that may be to start up a bit further from the beach, then capture growth through equity and 1031 into a larger beachfront property later. There is also better versatility of use in the non-condo properties and future resale is easier.

@Jamie Clayton I would suggest look into single family homes in Fort Walton Beach to use as vacation rental/STR. They can be very successful as vacation rentals. Here are the reasons why I would suggest that over other options in your case:

1) I agree with some of the advice above that finding a warrantable condo that also allows STR on the Panhandle will be really difficult if not impossible. The one complex someone mentioned above in Destin, Gulf Terrace Condos, technically does not allow STR. Yes, people break that rule, but you can get in trouble or worse, be stuck with a property that you cannon use as intended.

2) Yes, in PCB you will find properties more affordable. Yes, townhouses are a good option and there are more of those there. Do keep in mind that most townhouses in PCB are older, built in the 80s, etc. So while they may come with no HOAs and better financing options, they also come with more expensive maintenance requirements like having to replace roofs, dealing with plumbing issues, etc. With no HOA, all of these items fall on the owner. Also, single family homes and townhouses will have significantly more expensive insurance than a condo and may require flood insurance as well.

3) If you want to be under $400k and want to use the property as a vacation rental close to the beach, Fort Walton Beach can offer some very good options where you can use conventional financing with 10% down. You will still have to take care of ongoing maintenance expenses and insurance needs for the property. That will be the case in PCB or anywhere you choose to buy a townhouse or SFR. The reason I like Fort Walton better for using a single family home as vacation rental is because in Fort Walton THERE IS EASY ACCESS TO THE PUBPLIC BEACH WITH LOTS OF FREE PARKING. The is key when trying to attract guests to book a vacation rental that is not directly on the beach. In PCB the beach access points have no parking. So if you buy a SFR or townhouse that is not right by the beach your guests will have to do quite a lot of walking or have trouble finding parking to go to the beach. 30A is even worse. If you have ever tried any type of public parking or beach access at 30A you will know what I mean. There is better beach access in Destin and Miramar Beach, but there are rental restrictions for STRs in the residential areas there. So you are back to the non-warrantable condos and the 25% down.

If you need proof of what I wrote :-), go on Airbnb, look into vacation rental house in Fort Walton Beach that are further into town (not on Okaloosa Island) and read the guest reviews. You'll that if a rental is well managed tourists really like those :-).