All Forum Posts by: Timothy Church

I've been wanting to start a real estate meet up here on the island for quite some time. Though honestly with working in real estate and now having two kids under two, the idea of taking on setting things up and finding speakers is more than I need to put on my plate. I was wondering if there was any interest in just a casual meet up. No speeches or sales of any kind. Just a couple of investors grabbing a beer and talking about real estate and whatever else comes up. I know bars are closed so that would be a no go for a while but thought I'd see if there was any interest.

@Nathaniel Walker

Honestly with Covid, missed dates, and other issues, it has been more of that really bad season that every show has!! Things are still moving forward but have been rather slow going. Thankfully we are to the tail end of things. All the painting, flooring, and electrical work has been done. We just need to install all the cabinetry, countertops, and final plumbing to get everything wrapped up. The goal is to try to finish up this month barring any other issues arising. 

It has been a long road and while I know it will be worth it, I'm so ready for it to be done!

Good evening! 

STRs down here can be a blast when they are done right. I personally have a handful and manage 13 for other investors. 

Judging by the way you described the property it will be investment with some personal use. This honestly is the best fit for a property like this. At that price point, it wouldnt be the best return on your money but if it is above break even and you get to use it whenever then it is perfect!

If you'd like to double check performance numbers, I can send you over an Airdna report on it. Just to give you some more informed numbers.

Hope you invest down here! Always good to get on island time. Let me know if you have any specific questions.

The contractor says 2 months so I'm picturing 3 months. If you ask my wife, she'll say 2021... She's going a bit stir crazy living among boxes in the downstairs apartment. I just really want things wrapped up for this summer so I can get the two airbnbs up and running.

After 4 months of back and forth, having to add fire sprinklers to the budget, and adjusting things down to the finest detail, I have my final building permit! It is the prettiest piece of blue paper I've ever seen! We will finally be able to get the ball rolling on the upstairs build-out. Hopefully, a lot more photos coming over the next couple of months!

@George Pauley

That definitely makes sense! While I do want to re-leverage with LOCs, I will go through a period where I'm continually decreasing my return. 

I'm beginning to lean towards putting the money into Vanguard until it reaches a point that a loan can be paid off in full. During which time I can do some short term investments such as hard money. Once it is paid off, open a LOC to have access to that equity and repeat it. That way I can slowly lower my debt for my peace of mine but have funds accessible at all times.

The main reason for the LOCs is a desire to purchase properties, rehab them, and then refinance them with some debt. Being a realtor, I've seen far too many times that a bank delays closing or costs a deal due to not meeting deadlines. I prefer the ability to purchase and then refi on my schedule.

@Christina Johnson

The Park Board states,

"Reports are due by the 20th of the month following the reporting period. Properties which do not generate more than $500 per month in taxes or $1,500 per quarter in taxes can report on a quarterly basis. Those due dates are April 20th, July 20th, October 20th, and January 20th."

Reference: https://www.galvestonparkboard.org/174/Hotel-Occupancy-Tax

It isn't $500/month in income. It is less than $500/month in taxes. At a 9% HOT, that means all properties making less than $5,555.56 in a given month or $16,666.67 a quarter can pay quarterly. If everyone you know is making $67k a year off all their properties, hats off to them but not all properties make that much. Just making sure the correct information is presented.

@Joseph Cacciapaglia

There aren't any prepayment penalties on any but the Freddie Mac. I've thought about refinancing at least the Comm 4 over to a residential loan. The issue is that all (excluding Freddie) are personally guaranteed so I don't know how many I'd be able to refinance back to back. The other issue I've found with refinancing the commercial is that they are in an awkward loan amount being that they are sub $1M loans. Only banks I have that will do it charge a premium.

Currently, they are all cash flowing well so I could just let them be. Just trying to figure out the best space to put future income.

I do want to invest outside Galveston soon! If I get one paid off, I'm thinking of using the LOC to buy something across the pond! That's still a bit down the road.

@Christina Johnson

Any property owing less than $500/month in HOT to Galveston (income of less than $5500/month), can pay quarterly. While you can definitely beat that with certain properties, I wouldn't say very few qualify. The average 3-bedroom in 77550 grosses around $40k/year based on Airdna data.

I do believe there is a cap coming as the amount of STRs begins to cause rental prices to decrease but as that comes, properties that aren't managed well will come back on the market for people to own as primary residences and second homes. Our surge in appreciation over the last 5 years has finally slowed down and as home prices stabilize plenty of people will be moving to the island. We just have an overall change in demographics happening.