All Forum Posts by: Travis Main

Hi Charlice, 

Welcome to the community! As someone who recently completed my first fix-and-flip project, I can share a few challenges that took me by surprise:

Navigating the local permitting process was more complex and time-consuming than I anticipated. Inspections can also cause delays, especially if unexpected issues arise that need to be corrected before moving forward. I’ve learned to start the permitting process early and keep a close eye on inspection timelines to avoid bottlenecks.

It can be difficult to find contractors who are not only skilled but also reliable and available when you need them. I handled this by building a network of trusted professionals and always having backup options in case someone couldn’t deliver on time.

Striking the right balance between quality work and sticking to the budget is tough. There were moments when I had to decide whether to go for higher-end finishes or stick to more cost-effective options. My tip is to focus on what adds the most value to the property and the market you’re targeting.

No matter how thorough your initial budget, unexpected expenses are almost inevitable. From hidden structural issues to last-minute design changes, these can add up quickly. I recommend setting aside a contingency fund of at least 10-15% of your total budget to handle surprises without derailing your project.

Juggling multiple contractors and staying on schedule is tougher than it seems. Delays can happen due to material shortages, weather conditions, or scheduling conflicts. To stay on track, I suggest having a detailed project timeline and regularly checking in with your team to keep everyone aligned.

The real estate market can change quickly, impacting your projected sale price. Research your local market trends before starting, and have a plan B (like renting out the property) if the market shifts unexpectedly.

For anyone new to this, patience and flexibility are crucial. Things won’t always go as planned, but with the right mindset and preparation, you can navigate the challenges and come out successful! Good luck!

Hey Brent, 

Welcome to the BiggerPockets community! 

Transitioning from one field to another can be daunting, but you've come to the right place to learn, grow, and connect with like-minded people.

It's awesome that you've already dived into some real estate reading; that curiosity and willingness to absorb information will definitely help you as you figure out your next steps. Whether you end up pursuing fix-and-flips, rental properties, or another niche, this community is full of experienced investors who are more than happy to share advice and guidance.

Feel free to ask questions, join discussions, and network with others who have been where you are now. Wishing you the best of luck on this new chapter—you've got this!

Hey Hadar, 

Instead of focusing on established hot markets like DFW, you might want to explore emerging markets where property values are still reasonable, but there's potential for growth. Cities in the Midwest and Southeast, like Indianapolis, Kansas City, Birmingham, and parts of Ohio, are often mentioned as good BRRRR markets. These areas typically have lower property taxes and more favorable price-to-rent ratios.

Sometimes, the best deals are found outside of the major metro areas. Look for secondary or tertiary markets within a reasonable distance from larger cities. These areas often have less competition, lower prices, and better cash flow potential. For example, instead of Dallas or Fort Worth, you might look into cities like Waco, Tyler, or Sherman-Denison in Texas.

Best Regards, 

Hey Chuck, 

Your plan has a solid foundation and shows a clear strategy for leveraging your current home equity to grow your real estate business. However, there are a few considerations and potential challenges you might want to think about.

Renting the rehab property from your LLC and living in it while completing renovations can be a smart move, as it saves on living expenses. However, be aware that this might complicate things with the rehab and if you intend to claim tax benefits associated with rental properties. Living in the property may limit your ability to fully deduct expenses or claim depreciation on your taxes.

Ensure you fully understand the financing implications of moving into a property owned by your LLC. Some lenders may view this as a more complex scenario, especially if you plan to refinance later. It's important to confirm that your lender is aware of your plans and that it won't affect your ability to secure favorable terms.If you are planning on using hard money to finance the deal, please keep in mind that most hard money lenders out there have a hard stance against owner-occupancy. This strategy can limit the financing options out there for you.

Renting from your own LLC could have liability implications. Make sure that your LLC structure is solid, with proper insurance coverage in place, to protect your personal assets from any potential issues related to the rehab or the property itself. In this scenario you might need multiple policies in place to cover the rehab, tenant occupancy and your homeowners insurance. This could really inflate the insurance policy premium.

Your plan to either rent or flip the property depending on the market is flexible, which is great. However, market conditions can change quickly, so be sure to have a backup plan if the market isn’t favorable when you complete the rehab.

Reinvesting the $100k equity from your current home into your LLC to purchase additional properties for a BRRRR strategy is a strong approach for building your portfolio. Just make sure you keep enough cash reserves on hand to cover unexpected costs or market downturns.

Given the complexity of your plan, especially with the involvement of an LLC and potential rental income, it might be wise to consult with a tax professional. They can help you navigate any potential tax pitfalls and ensure that your strategy maximizes your benefits.

Overall, your plan is ambitious and well thought out, but it’s crucial to keep these factors in mind to ensure success. It might also be helpful to seek advice from a real estate attorney or accountant to make sure everything is structured properly.

Best Regards, 

Hey Rob, 

It's completely normal to feel anxious when making a big financial decision, especially when you're looking to scale up your real estate investments. You've got an impressive track record with rentals and have already completed a flip, even if it didn’t go perfectly. That experience is invaluable, and you’ve clearly learned a lot from it. Remember, even breaking even or taking a small loss is better than many first-time flippers experience, and it’s a great learning opportunity. Before pulling the trigger, take a step back and reassess your long-term goals. If building a LTR portfolio is your ultimate aim, consider how each potential flip will help you get there. Knowing your “why” can help reduce anxiety by aligning your actions with your long-term objectives. Since you're feeling some anxiety, maybe consider starting with a smaller, less risky flip. This could help you build confidence and add to your capital without the pressure of a larger, more complex project.

You’re right that the Nashville/Central TN market has been hot, and while it’s cooling, rates are favorable. This might actually be a good time to find deals as some sellers might be more motivated. That said, make sure you’re comfortable with the comps and the exit strategy, whether that’s selling quickly or holding for a bit if the market doesn’t rebound immediately.

To overcome analysis paralysis, try setting a deadline for making a decision. Sometimes, giving yourself a firm timeline to either move forward or reassess can help break the cycle of overthinking. Consider ways to mitigate the risks that are causing you anxiety. For example, build a buffer into your timeline and budget based on your previous experience with contractors, or seek out properties where the rehab is more cosmetic than structural to reduce the complexity.

 You’ve got the experience, the resources, and a solid understanding of the market. Trust your instincts and remember that every investment comes with some risk, but you’re in a strong position to manage that risk. Ultimately, the decision is yours, but it seems like you’ve got a solid foundation and just need to take that next step with confidence. Whether you choose to flip or explore other creative ways to build your portfolio, trust in your skills and knowledge—you’ve got this!

Hey Mik, 

I have a condo as well and have thought about converting it into a MTR or STR but the restrictions by the condo association completely prevent this. I have looked for a way to get this done which seems like it's impossible. You're best bet is to talk to management and see if there is an exception that can be made based on your plan. Chances are they still wont allow it but it's worth the shot.

Best Regards, 

Hey Shalonda, 

When renting out a property for mid-term stays, typically defined as stays longer than 30 days but less than six months, the tax situation can be a bit complex. Here's how it generally works in Florida, specifically in Pinellas County. In Florida, short-term rentals (under 6 months) are subject to a 6% state sales tax and a 6% Pinellas County Tourist Development Tax (also known as the "bed tax"). Since your rentals are around 60 days, these taxes do apply.

Yes, you should include these taxes in the charges to your tenants. You can either clearly list the 6% state sales tax and the 6% county tax separately in your rental agreement or invoice. Or you can also include the taxes in the overall rental rate and indicate in the agreement that the total includes applicable taxes.

If you’re managing the property yourself, you'll need to collect these taxes from your tenants and remit them to the state and county. Some platforms, like Airbnb or VRBO, may handle the collection and remittance for you, but it's important to verify this.

Make sure to register with the Florida Department of Revenue and Pinellas County to file and pay these taxes. Filing can be done monthly, quarterly, or annually, depending on your total rental income.

If you’re unsure or want to ensure compliance, it might be wise to consult with a tax professional familiar with Florida's rental laws. This will help you avoid any legal issues and ensure that you’re correctly handling the taxes.

Best Regards, 

Hey David, 

Congratulations on being so close to closing on your first rental property! That's an exciting milestone. As you prepare to rent it out, it’s great that you’re thinking ahead about the legal and paperwork aspects. For your insurance, you will want to make sure you have landlord insurance policy in place. This is different from homeowner’s insurance and will cover things like property damage, liability, and loss of rental income. You will also want to draft a comprehensive lease agreement that outlines terms such as rent amount, due dates, security deposit, maintenance responsibilities, and any house rules. It's worth consulting a local attorney or using a reliable legal service to ensure it complies with state and local laws. You will also want to develop a tenant screening process that includes credit checks, background checks, employment verification, and references from previous landlords. This helps mitigate the risk of renting to unreliable tenants. I would also try to familiarize yourself with local landlord-tenant laws, including fair housing regulations, security deposit limits, and notice requirements for entering the property or terminating a lease.

Prior to renting, conduct a thorough inspection of the property before the tenant moves in, and document the condition with photos or a video walkthrough. Have the tenant sign off on a move-in checklist to avoid disputes later.

If your not using a property management company, you will also want to establish a plan for handling maintenance requests and emergencies. You might want to set up a dedicated email or phone number for tenants to reach you or your property manager.

Set up a system for tracking income and expenses related to the property. This will be important for tax purposes and overall financial management.

If you're feeling overwhelmed at the end of all this, consider hiring a property manager or consulting with a real estate attorney who can guide you through the process and handle any legal concerns.

Hey Kelly, 

I'm a member/vendor of the NCREIA. We have our monthly meeting happening in Charlotte on Wednesday July 17th at 6pm-9pm. NCREIA is North Carolina's leading Real Estate Investing association, offering hands-on training with industry experts and a thriving community for networking and growth. We cater to all experience levels with multiple educational opportunities each week and provide access to regular off-market deals. I think this would be a great opportunity for you to attend and see if it's something you might be interested in. If so, send me a DM and I can give you further details. 

Hey Sherri, 

Welcome to the BP community. Headed to the NCREIA Wilmington event on July 18th. If you would like to network with like minded individuals in your local community come on out. If you want more information, send me a DM. I'll give you all the details.