All Forum Posts by: Timothy Church

I was thinking about next weekend either meeting at DTO or even just outside Maceo's. Does anyone have preferences on day and time?

@Christina Johnson

Yes ma'am I do have some experience with STRs. I personally have 4 vacation rentals and am furnishing two more. I also manage a dozen for other clients with two more onboarding next month. Out of those 5 are condos.

I was just offering my opinion on condos versus single-family homes from my experience with them. Both options have their pros and cons. It comes down to what an individual investor is comfortable with and the level of control they wish to have.

@Louis Barkhuizen

Either way, I hope you do well! Whatever you decide make sure to create a post after a few months of running to let us know how it went. I'm curious to know how the Port A market does. I eventually need to invest outside the Galveston market so not all my eggs are in one basket!

There are a few reasons I typically advocate for an SFR over a condo.

In most condo complexes in a tourist town that allow for vacation rentals, there are a lot of them that are vacation rentals. While that gives you a margin of safety that the HOA won't change suddenly and stop allowing vacation rentals, it does mean that you have a large amount of direct competition. You have countless other units with the same size and floor plan. While you can do certain things to try to make your unit stand out, overall your income is going to be capped by the availability of alternatives right in your building.

Another point, HOA costs and assessment for repairs can seriously eat into your bottom line. While insurances can do the same thing for a single-family residence (I live in Galveston so I understand your pain of having liability, windstorm, & flood), you at least have the ability to lessen or remove insurance once the property is paid off. Plus you can plan out your capex on an SFR instead of having it blindside you with a condo HOA.

Overall though, if you are willing to deal with things like this and the property offers better returns, go for the condo. It might not be the perfect option but it gets the ball rolling. Plus not having to deal with the maintenance yourself takes a load off your plate. Either way, pick an avenue, pull the trigger, and do the best you can with it. Vacation rentals are a fun market once you're in it!

@Christina Johnson

I'm not looking to argue here but simply state the facts. 

The only thing the title company discloses is public documents such as the deed. If the purchase is a cash purchase, typically the simply write "$10 and other valuable consideration" so the amount isn't disclosed on the deed. On any financed deal, they put the amount of the purchase that was financed but not the total. While you can guess the downpayment was a standard amount, you have no way of knowing therefore it isn't disclosed.

Agents do disclose the purchase price back to the MLS as that is part of our MLS agreement. While the tax office tries to find ways to obtain the MLS information through third parties, they aren't supposed to have access.

Most commonly the way they get the sales price is by sending an official letter to the property saying for you to disclose the amount. In Texas (as well as 11 other states), you are not required to answer that letter or disclose it to anyone.

While the data is available on the MLS for agents, it is not out as public information. It is the reason when you pull up a sold listing on the public side of HAR it gives you a range it could have sold in. Once you log in as an agent, it gives you the exact amount.

Just stating this for public record in case anyone reads through this thread while looking up information about Texas and non-disclosure.

@Christina Johnson

What he means by non-disclosure is that the county that controls property taxes (ie the government) isn't given the details of the sale of a property. Therefore they cannot use those details to raise your property taxes as they do in other states. It isn't to do with agents not disclosing information about a property. It is that the title company isn't going to give the county the sales info and if a tax assessor comes to the door and asks what you paid, you are not required to tell them.

@Benjamin Torres

Overall, Texas is great for investment as it tends to be a state that leans towards the landlord side of things. This does, however, differ a bit from JP to JP. I know I have a couple of properties in a different district that the JP is more tenant-friendly but thankfully I haven't had to follow through with any evictions there. Always good to see how the JP leans just in case you do have an eviction.

Another good place to look in Texas is the tax auctions if you have the capital to buy in cash. There is a two year redemption period in which the first year the owner can buy back for what you paid plus 25% and the second year plus 50%. As long as you keep repairs below those marks and rent them out, it can be lucrative. I know here in Galveston not a tremendous amount make it to the auction as we have lots of door knockers that will go to houses as soon as the list is posted to try to scoop it up beforehand but you might have great luck in the other areas.

The only other point that pops into my head is to look at the market expansion rates. I know in the Harris market rental rates can be interesting as Houston is constantly expanding with new construction going up every which way. Galveston on the other hand is completely landlocked into the number of homes we can have. Watching the new construction and subsequent rental availability is definitely something to keep an eye on.

Best of luck with investing! Hope y'all are able to build up a solid pipeline!

I work as a realtor and vacation rental property manager in Galveston and I still recommend to most of my clients to self manage if they can. If you are able to get systems in place, it can be rather streamlined and can obviously add to your bottom line. Here are a few main things I'd recommend.

BeyondPricing/Wheelhouse - They are great dynamic pricing tools with some customizability. Once you have them set up, simply log in once a week or so and adjust your base price based on your occupancy. This will insure high occupancy and maximize income. For my market, I shoot to stay in the 50-60% range for the next 30 days with last minute guest filling in the gaps but every market is different. Costs 1% of booking price

Turnoverbnb - This is a great tool for coordinating with cleaners. Simply sync up your calendars from every site you are using for bookings. It will automatically email the cleaners when there is a booking, give them updates if dates change, and even cancel the cleaning if you get a cancelation. Obviously finding reliable cleaners are a must have as they are your eyes for the property. Make sure they offer laundry services and will put out any paper goods. Cost is $8 per property

Amazon - Create a cart with everything you use in your property from paper goods to soap to linens. Anytime your cleaners warn you that you are getting low, simply order it and have it shipped to the house itself or to the cleaners. I let the guest know if I have supplies coming in and simply ask them to set them inside for the cleaners. This way if say two coffee mugs break you can order a brand new set of the same type and have them there within a day or two. 

Smart lock - Always use a smart lock! It makes a world of difference. If you feel like you'd like to change the code often, get one with the ability to connect to the wifi so you can do so remotely. Even if you are using a smart lock, put two wall mounted lockboxes on the property somewhere out of the way. The first one will be the guest back up in case there is any issue with the smart lock. The second is the back up of the back up that's yours as an owner. I had one time the smart lock went out on a property due to extreme humidity getting in and frying the board (Yay Galveston weather!). I was out of town at a wedding so I gave the guest the code for the back up key and made a note to change out the lock. The next day I get a call that they lost the key at the beach!! I had them take the back up back up key and make a copy and lock it back up. Saved me from having to get a locksmith out while I was 6 hours away.

Really all you are left with after these tools is guest communication and any maintenance. If you want to automate further there are tools to automate a few messages to make sure guest get information. Any maintenance comes down to finding reliable people who are willing to send you photos before and after to show you the work completed.

With a newly done unit, hopefully you won't have too many issues! It is definitely worth trying out just to get a feel for it. If it isn't your cup of tea you can always call a management company but you won't know unless you try!

I'm thinking about starting up a casual meet up here in Galveston. No speeches or sales. Just investors relaxing together and discussing real estate and strategies. Don't have anything set up yet but hopefully put one together next month. I'd be happy to message you or anyone else interested when I do.

Christina is right. Overall our demographic in Galveston is families and couples traveling together. There were a few issues right after the lockdown lifted of parties but overall it is extremely rare! Overall it is really more dependant on the property that you have and how you manage it. I manage some great properties in Pirates Beach and never have an issue. At the same time, there is one house there that advertises they sleep 30! Guess which house has all the neighbors pissed.

I can't speak to the other markets but Galveston has been a fun market. If you have any questions about here, feel free to post them and I'd be happy to share what I know.

Great! Honestly, I'm thinking I'd just have it at the downstairs of my house once I finish a few things. I have beer and a pool table! Figure that is about as casual as it gets.

I don't know how your saving currently looks but if you could come up with the $40k difference between your 401k payout and your current primary residence, a good option could be the HELOC route.

With your primary residence being valued at $450k, at 75% you could have a HELOC of $337k. What this will do is immediately lower your current cost of living as mortgages typically account for about 25-33% of most people's cost of living. This would make the option of quitting in a couple of years much more comfortable.

Since a HELOC, only charges for what you are currently using you'd have the flexibility to control what your payments would be. You also have instant access to this cash so it would allow you to purchase properties quickly. Simply use the HELOC to purchase and rehab the property. Once it is finished, you can sell it, pay down the HELOC, and set aside the funds for the next project so you have to use less of the HELOC on the next one. Alternatively, rent out the property. While it varies on the lender, I've worked with banks that if there is a year lease in place and a trailing 3 months of performance they can offer refinances. Since the HELOC is secured against your personal residence, the investment property technically has no debt and is owned outright. You could refinance at the amount of the HELOC or fully leverage it at 75-80% (depending on the bank) and set aside the excess funds as previously mentioned.

I've always leaned towards the long term play but if you are looking to quit your job, flipping a handful to build up a good amount of working capital could be the better option. There are a bunch of little things you could do to tweak this and make it your own. My biggest thing has always been the minimalizing of my big-ticket costs on my budget so I have the ability to do more with my life. This way allows you that freedom now instead of waiting 20+ years for your mortgage to be paid off.

Just my thoughts and ramblings!