All Forum Posts by: Todd Chandler

Good morning,

My wife and I are investors as well as licensed Realtors here in Northeast Georgia.   We have completed two fix and flip projects and currently have two more nearing completion.  We have a really solid private money guy who has been wonderful to work with, however he typically can only fund two of our projects at a time.   We have opportunities for additional fix and flip projects and are seeking to partner with additional private money lenders so that we can scale our business.

We are exploring several avenues to scale including using equity in our existing properties and hard money loans, but we prefer working with private money because we can negotiate terms that create a win-win for us and the lender.

We are looking to build a long-term relationship with additional private money lenders to do multiple projects.   We have an immediate opportunity that would require $175K with the project running roughly six months from start to finish.   If you are a private money lender who is looking for investment opportunities, we'd love to connect.

 Milena, the beauty of private money loans is that you can negotiate whatever terms make sense for you and the partner.   I have a partner that I have done several deals with and he is good with a fixed return on his investment.   The newer investor that I'm partnering with is more interested in a percentage.   Every situation and investor is different in my experience.

Thanks Brian!

There will be no lender or loan involved in this deal.  Our partners will be bringing cash for the entire deal.

My wife and I are Realtors and have completed two fix and flips and are about to start on our third.

We have an investor and his wife who want to fund a fix and flip as silent partners and split the profits from the project while my wife and I will provide the sweat equity.

Our investor and his wife have a new LLC that they intend to run their real estate investments through, and my wife and I have an LLC that we run our real estate business through.

We have never done a partnership deal like this and have a few questions:

1. Would the best practice be to form a new LLC where all four of us are managing members?

2. Should we open a new bank account in the name of the LLC that the other partners would fund?

3.   Should the purchase of the property be made with funds from the new LLCs bank account along with all other expenses?

4. Once the property is renovated and sells, do the proceeds come back into the new LLC and then are distributed from there to each couple's existing LLC?

I know that this is a lot, so please let me know if I need to clarify anything.  I am looking for best practices both from a legal protection standpoint and from a tax advantage standpoint.

I read J Scott’s “Estimating Rehab Costs” book and I am about to read through it again.   Is there an updated version planned or a comparable book with updated numbers available?

 Paul, we self manage our properties and we understand that technical parts of it.   Things are different when you manage for someone else.  There are questions about fee structure, expectations of management company and owner, insurance implications, etc.   I have to respectfully disagree that you just "pretend it is your own".   There is a lot more to consider when doing it as a business in my humble opinion.

Thanks for the feedback Luke. We are finding that most of the STR management companies in our local area frankly do a terrible job and most of their clients are not particularly happy with them. We are trying to avoid green light syndrome that Avery describes in her book and not overstep our abilities or get in over our heads, but I'd be lying if I said I don't see opportunity and want to learn more.

Do we have any STR property management business owners here who would be willing to connect and allow me to pick your brain on the ins and outs of the business? My wife and I are Realtors and STR owners who self-manage and would like to know more about the property management business. Thanks!

My wife and I own two short term rentals here in Georgia and manage them ourselves. We been very successful in doing so. We have been approached by a fellow STR owner about co-hosting a single property for them. We are confident in our ability to handle the tasks and have the systems in place, but we do have a few best practice questions.

1.   They have asked us if we have any type of insurance that would cover any incident if my wife and I or any cleaner or handyman that we hire were to be injured on the property.   This frankly didn't even cross my mind.  What are guys who are co-hosting and managing STRs doing for this?  I am assuming that the best bet is to hire an insured cleaner and handyman so that they cover themselves or have them sign some type of waiver relieving the owner of any responsibility, but I want to hear your thoughts.

2.  For those who have clients who prefer that the payouts from the OTAs come to them and then they pay your management invoice at the end of the month, do you have your client directly pay the cleaner and handyman for their work or do you pay them and then invoice the client?

We have an STR in Northeast GA that is currently listed on AirBnB and VRBO. I'm using Guesty for Hosts and I'm playing around with the website builder and I'm strongly considering also offering a direct booking option. I know that AirBnB and VRBO collect and remit the taxes for me on those platforms, but that burden would obviously shift to me for the direct bookings. It is my understanding that I have to collect and remit the following:

7% Georgia Sales Tax

8% Occupancy Tax (This is what the county that we operate in requires. I realize that this number can be different depending on the county)

$5 Per Night Georgia Innkeeper Fee

Is there anything I'm missing or overlooking?