All Forum Posts by: Leigh Ann Smith

We own and operate a choose & cut Christmas tree farm. It's set up as a sole proprietorship (no LLC). We set up a separate business for REI as an LLC, but I wonder if it would be better to roll the 2 businesses into one to facilitate obtaining credit for REI. The tree farm has been in business more than 10 years and shows a modest profit (a VERY modest profit).

But, it's a very different kind of business for tax purposes. For the farm, we use a Schedule F, which is for reporting farm income and expenses. For REI, we are starting out with a vacation rental, a tiny house which will be located on the farm property, but we hope to also move into buy & hold.

I am also concerned with asset protection for our land if someone were hurt here. The combination of hayrides, camp fires, and kids makes this a definite possibility. Should we get the farm and REI business into an entity which would lease the land from us to provide some degree of separation?

What kind of professional could advise us on this?  An accountant, attorney, other?  If an attorney, what specialty?

I appreciate your insights, @Nick Persico!  One thing we do have going for us is our farm.  It's a choose and cut Christmas tree farm, and we have 1,000+ families here every year who will see the tiny house. We can put up some signs or pass out flyers to them.  We also have about 2,000 Facebook fans, most of whom are local, so we could do Facebook advertising to them and to their friends. That would be very inexpensive.

I appreciate the MyVR recommendation. I'm new at this, and was only familiar with VRBO and AirBNB.  I'll check into that!

Hi, @Nick Persico! I'm not sure that Smarthost will be helpful for me, because it seems to me that there aren't any comps. We purchased a cute tiny house (sleeps 2) that we plan to set up as a rental at our Christmas tree farm in Manvel, TX.  There are tons of properties less than 20 miles from us, in Houston, but they are in the city and close to things.  We're in the country and close to nothing.  Because of this, we're unsure of pricing and what kind of occupancy to anticipate.  Help me understand how Smarthost could be helpful for a property like ours.

I looked up Smarthost after seeing it mentioned in another thread, but I can't find anything on their site about pricing.  Does anyone know what they charge?

@Brenda Logan, yep, that's us off Hwy 6!  If you come this year, be sure to look for me and say hello. Also look to see if we have that tiny house all set up by the pond!

@Joe Fairless, just comparing to 1 bedroom vacation rentals in the Houston area, I don't think we'd be able to charge more than $100/night and maybe not that much.  I hope I'm wrong about that, though!  The great thing about renting through these websites is that you can change your prices as you get a feel for what the market will bear.

@Brad Carrier, the septic system is expensive, we're thinking maybe $7K, but we had been considering adding one anyway.  We have portapotties for our tree farm customers to use, and people really hate portapotties.  So, we've been hoping to eventually put in restrooms.  That would also make us better equipped to host company picnics and other events.  If we can make that work for our cabin rentals also, we'll be spreading the cost around.

@John Underwood, how do you check the occupancy calendars of your competition? I think it was VRBO I was looking at that showed an availability calendar, but I wondered how far in advance you could look for helpful data. In other words, if a property comparable to mine only has 1 weekend booked for October so far, is it too soon to make any projections based on that?

Only realtors can access the MLS, @Account Closed, so if you want to know true comps you'll need to work with a realtor or become one yourself.

Yes, we did it.  Does that count as our first deal?  

The house is on a trailer and is 8' x 18'.  The guys who built it are going to add a covered porch onto if after we move it to our place.  Pictures are here if you're interested:  http://houston.craigslist.org/for/5149881504.html  There's some interior finishing up to do, but I think it's pretty cute.

Anyway, the plan is to set it up on our property, which is a Christmas tree farm just outside of Houston.  There isn't anything to offer here in terms of activities other than going for walks in the trees, but we plan to put a fire pit area outside and just make it into a quiet retreat kind of place.  Yes, I know that the rest of you Houston folks are laughing about how practical a fire pit is around here! A pool would be better, but alas, that's pretty pricey. 

We have a customer base from the tree farm (about 2,000 Facebook likes) and hope to start there with marketing and will list the property on AirBNB or HomeAway.  

We have some work to do before it will be ready to rent.  We have to do some leveling and put in a road, bring electric to the site, install a septic system, and beautify our pond with a waterfall and some landscaping.  We hope this rental will do well enough that we can add another one.  If so, all that site work will already be done, so we can spread the cost of it over the 2 units.  We hope to have it looking nice and ready to rent by Thanksgiving so that all of our Christmas tree customers will see it and think, "I want to stay there!"

@Charlton Thiede, using leverage can be very beneficial with interest rates as low as they are. You might consider buying properties with cash, then financing them, keeping a chunk of capital in reserve.  That way, if the real estate market turns south, you'll still be able to make your payments and won't lose everything like so many did in the last downturn.  You can ride that out until things pick up again.

@Account Closed is right about you being an easy target. Because we don't want to be targets, my husband and I have listened to tons of BP podcasts, done some reading, and used the spreadsheets offered on this site to develop our own spreadsheets to evaluate properties. When a wholesaler tells us how this property is going to make X% ROI, we put the numbers into our spreadsheet to see what it will really make. We don't take anybody's word for anything. We will not be investing in anyone else's project anytime soon, because we simply don't have enough experience to know if we're being scammed.

We're also looking at the real estate crowdfunding sites like RealtyShares.  We would not put a lot of money into those investments initially, but are planning to put a minimum investment on one of the projects to see how it performs.