All Forum Posts by: Travers Xanthos

Hi all!

I recently learned about opportunity zones and realized that a property that I recently developed would qualify.  I bought an existing home in 2019 and made renovations + built two additional dwellings on the lot, these homes are located in an opportunity zone.  I plan on holding them for 10 years as well and would like to take advantage of the tax savings.

I was wondering if it is too late for me to create an opportunity zone fund since the project has already been completed.  Does anyone know if it's still possible for me to go through the process?

Thanks so much!

Hi all,

Long story short,I have a sublease tenant that I have a 4 month agreement with for a property that I rent with a master lease from the owner. Within a week of him moving in, we had numerous complaints from neighbors and the HOA about loud noises like domestic abuse, etc. I told him that my landlord was kicking me out and that he would need to move out but that I would give him a couple free days and he agreed.

A few days later, we found out that his fiance had listed all of my furniture for the apartment on FB Marketplace and the police told me that I couldn't do anything about it until they left and we found out that the items were actually missing (I can see through the window that the tv and all decorations are missing). Not surprisingly, since that time he has stopped paying rent and notified me that he will not be leaving and that we are unable to evict him due to the eviction moratorium.

I am going to go to the courthouse and try to have him evicted for criminal reasons tomorrow, but wanted to ask the group if they had any suggestions or recommendations on how I can get him out of the apartment. Any advice would be greatly appreciated!

Here are some points about the situation that may be relevant:

-Sold numerous pieces of my property from the unit, I have photos of the unit beforehand with items in place

-My original lease stipulates that I can sublease on Airbnb, but that any tenants for more than 30 days without landlord's consent designate a breach of the agreement. The landlord is ok with me doing this but this is what the original lease states.

-Current tenant does not have a copy of the sublease and I never actually signed it

-Tenant has had 2 additional people staying in the unit, which is against the lease-Tenant has a dog in the unit, which is against the lease-Leak caused from the refrigerator due to negligence by tenant has required damage to the unit and 2 downstairs neighbors (in August)

-Electricity and internet are in my name and no mention in sublease that it will be provided-Numerous complaints from neighbors and broken HOA rules

-15 days late on rent payment

Hi @Samantha Knoll!  Some good responses so far but I'm happy to add my 2 cents!

As @Sean McDonnell eluded to, one of the most important (if not the most important) factor for your evaluation should be understanding the potential revenue that a property can generate.  Just like in normal real estate, you need to find "comps" from other short term rentals performance in the area or in similar markets.

There are many ways to do this, some take more work that others, but I can explain the main way that I do it, and evaluating STR's for profitability is a major part of what I do for a living.

You can manually research listings on Airbnb and see how they are performing by looking at their calendars to determine their occupancy rates for the next 30-90 days.  Also, you'll want to check the pricing that they have set for different days of the week.  Based on that information you can create a loose estimate of what you can expect to bring in with the property...  To get a strong estimate, there are alot more details that you should consider and I can expand on that if you would like, but my favorite way for evaluating properties is by using Airdna.co. They aggregate actual data from Airbnb and Homeaway and put it into a useful format for investors.

I like to use a free tool that they have called the Rentalizer.  All you have to do is create a free account, type in your city into the Marketminder page and look for the Rentalizer tab on the left hand side of the page.  This allows you to input the address of a property that you're interested in, make sure that the information in the system is correct (# of bedrooms, baths, and max guests) and it will provide some useful estimates for you by comparing this property to the actual historical data from similar short term rentals nearby.

This can give you a great idea of what you can expect from a particular property!  The estimated are not always perfect, so you'll want to take a look at the listings that were used in the comparisons to see if there are any outliers (high or low) that may have skewed the data.

Good luck and let me know if I can do anything to help!

Hi all!

I have been planning on implementing the BRRRR strategy for some time now and am ready to get more serious in my search. I live in Nashville and was planning on investing in some more affordable markets ie Chattanooga or Birmingham, but I have recently gotten access to additional capital and am now considering doing my first renovation project closer to home.

I am fairly familiar with the Class A neighborhoods around downtown, but considering my budget, I wanted to poll the group and see what people's thoughts were for up and coming neighborhoods/suburbs near Nashville.  My all in budget, purchase price plus renovations, would be around $250k.

I believe that Nashville will continue to expand over the next 10-15 years, which areas do you see as probable for expansion and development over that time frame?  I am interested in neighborhoods near downtown, for example Bordeaux and Woodbine, or suburbs within 30-45 minutes of Nashville.  

I'm interested to hear the group's thoughts!  Thanks in advance!

Hi Joseph, I tend to disagree with most of the replies to your post. There is can certainly be an opportunity for you if you educate yourself before purchasing the property. #1 make sure that there are no short term regulations or HOA rules that would prohibit you from operating an STR.

If you find one that makes sense for you, I would recommend using the "Rentalizer" tool on at Airdna.co, it's a free tool that allows you to estimate the potential revenue that a property could generate.  It can be high or low, depending on the comparable listings, but it will give you a general idea.  You can use this link to go directly to the tool for Phoenix, no need to create an account:  https://www.airdna.co/vacation-rental-data/app/us/arizona/phoenix/rentalizer

If you are planning on living there for the first year, there are a few benefits, but I would recommend thinking about "house hacking" to get a good idea of whether you'd like to continue on as an STR or a LTR when you decide to move out. You could rent out an extra bedroom OR configure your property in a way that you can rent the entire place out for a weekend or two every month (lock on your closet door, lock on your pantry, etc.).

This is a house hacking strategy that I have been doing for years.  I rent out my house for 1-2 weekends a month and stay with a friend or take a weekend trip out of town, and the payouts usually cover my mortgage/expenses plus some!

Anyway, might be a good idea for you to try out to get your feet wet. Don't be scared off by people in this thread telling you not to mess around with STR's if you don't have experience... The only way to gain experience is to take action! You'll learn as you go. I was in your shoes 4 years ago, with no STR experience at all, now I have almost 30 of my own properties and an internal team built up to manage them for me. If I had listened to the naysayers, I would still be working for someone else!

I say educate yourself, put together a plan, and execute!  Best of luck!

@Kevin Romines Great, thanks so much for the help!

@Kevin Romines

So if that’s the case, I wouldn’t even need to show a lease or several months of rental income. As soon as the rehab is done and the appraisal has been completed, I could refinance based off of the rental value that the appraiser states?

It seems like everywhere I have read, people talk about having to wait a few months after leasing the property before they can refinance...

Hi all,

There are businesses out there that do rental arbitrage, where they sign master leases on properties and then operate short term rentals out of the units.

In that case, since there is a signed lease and the property owner is receiving a fixed amount of rental income, I believe that lenders would look at that as long term rental income for the owner, correct?

I actually have a rental arbitrage business with 20 properties. I am looking to start implementing the BRRRR strategy but would like to maximize my cash flow by running a STR instead of a LTR. I understand that it is difficult to find a lender that will consider STR income when qualifying for a refinance without having to wait a year or two.

Would it be possible for me to create a separate LLC that leases the property from me and makes monthly rent payments so that I could qualify to refinance the property? It seems like this would work, in theory, but I wanted to get some feedback from the forum before I solidify this as my plan.

Thanks in advance!

@Kevin Romines

Ok, that makes sense. So if the bank counts the rental income immediately, then it would actually help my debt to income ratio, if profitable enough. Am I understanding that right?

The problem is, I am planning on renting the homes out as short term rentals. I have a rental arbitrage business that signs master leases with buildings and runs Airbnb’s in the units. I was wondering if I would be able to get through the refinance by leasing the units from myself (separate llc) so the lender’s would look at them as leased/ long term rentals. Do you think that would fly?

Hi all!

I have a question about financing that I was hoping to get some guidance on.

I am currently working on a development project and once it is done, my debt to income ratio will be at about 40%. I would like to continue growing my real estate portfolio and am trying to find creative ways to continue leveraging.

I have an investor who has agreed to put up the money for some BRRRR projects and he has a very high annual income (over $1M a year) and only $5k a month in debt. I would find the deals, manage the rehab, and manage operations of the property and we would split the deals 50/50.

Is there a way that we could refinance the properties without them effecting my debt to income ratio?

Thanks in advance for the help!