All Forum Posts by: Timothy Gleason

Amil D. Let me rephrase your post for you: Greetings BP, I'm looking at getting started and I've got some clear advantages that I'm looking for help in how to exploit to my max benefit. Advice appreciated: 1. I've got a steady job. I've got a steady income that I believe will help me out during the loan underwriting process. 2. I have odd hours. I don't need to report until 10AM each morning, so I can conduct phone business in the AM hours while my competitors are already busy punching their W2 clock. 3. I have some Fridays off. With a professionals approach, I anticipate being able to plan my property viewings, closings and other items to get me access to the best real estate talent without consuming their precious weekend time. ------ My point- change your perspective. There are many who would envy your present position. Now get out there and take action!

Options: 

- Put a fence up around the unused areas and market it as RV/Boat storage.

- (Already mentioned) Car port or equivalent, charge supplemental rent to existing tenants for the dedicated spot(s)

- Run utilities and pour a pad, turn it into an RV spot & charge by the night.

- Site a tiny house or (2) and rent it AirBnB

- Lease the land to a billboard company

- Lease the land to a satellite or antenna company where they can put antenna's on your yard.

- Coordinate with neighbor for their potential needs (direct lease to them)

- Coordinate with neighbor for access to improve market value of your dog-leg parcel

- Donate the land to the local garden club to improve the aesthetics and drive higher rents.  Or get free veggies

Personally, I'd feel out the neighbor first.  You've got an asset that he may pay a premium for (over a 3rd party) due to proximity.  If he won't pay for any of it, see if you can get additional access from his property - even with a fee to him for compensation.  That gives you maximum freedom to exploit your property value.  The storage options are easiest and likely most profitable in the end.

Love this discussion.  Like many here, my story is similar:  young kids, +50hr work weeks, 1hr commute each way, etc.  I'm at (1) VR, (2) SFRs, (1) Triplex in 3 yrs.  Here's my strategy:

- Don't give away your 'POWER HOUR'.  We all have a time each day where we're most efficient.  Mine is 5:30-6:30AM.  That hour is goal hour and dedicated to my real estate pursuits.  I won't give away my power-hour to a W2 job.  Find your power hour and take custody.

- Develop a metric for return on time, RoT.  I went into the short-term rental game with big eyes.  It's my most profitable property, but also my biggest time suck and I'm currently looking to transition out of the game.

- Scale up. I've already realized the disparity of my properties causes headaches for maintenance & CAPEX. I'm heading to MFH so I can buy the 'same kitchen' over and over without having to re-measure, re-bid, etc.

- Make it a game. Additional to the "1 property per year", I also make it a goal to shield all of my W2 income with my REI each year. This generally means I pick up a property and put some rehab $$ into it. Usually between closing costs and repair expenses, I zero out my W2 tax liability which really feels like WINNING.

- I also use a full PM for my SFH & Triplex. I self-manage my VR and it's burning me out quickly. I don't sweat the PM fees. If I tip my waiter 20%, I shouldn't moan about the steward of my properties earning ~13%.

I had the same issue when trying to get an LLC registered that happened to be "owned" by another LLC. In my research, it seemed that if you registered the EIN for the parent LLC online, you couldn't register 'child' LLCs online as well. I ended up sending in the form by mail and waiting 45-60 days (by my recollection).

Derek Pigulski Lots to iron out here. First up is to get PRO photos. Easiest way to distance yourself from the non-pro's out there. Second is to build a quality listing. I like VRBO, but there are others as well. Have your listing 'live' before Thanksgiving. The holidays have a way of spawning discussion for that next summer VACAY. In line with #2, pay diligent attention to your rates. This is more than just price, it also includes turnover days and minimum stay lengths. Once you start booking, your revenue is locked in. Shoot too high, and you miss the post-Holiday booking rush. Adjust both during the booking season to balance revenue and vacancy. Fourth- reserve your own dates. For your first year, is block some maintenance days into your calendar. It's very hard to do more than basic repairs on a single-turnover day. Five- control your reviews. Anyone CAN review, but if I know they had a good time and no issues, I 'push' a review request to them. If a marginal stay, I stay silent on topic. And if things are headed sideways during the visit, take as many steps to right the wrong as you can afford. In your first year, your online credibility base is everything. You can call me for more, but that's the basics.

@Jay Helms, make sure there isn't a mixup here with polybutylene vs. PEX. There shouldn't be any insurance penalty for PEX, it is the current gold standard and code compliant. 

Polybutylene on the other hand is a plumbing time bomb. 

I'd get another insurance quote to confirm the discount before proceeding. Also, be aware that there may be several other smart upgrades while you're doing the plumbing that are worthwhile, but more disruptive to tenants. (Scope creep)

@Doug Spence Welcome!  There's a healthy group of A/D military folks investing in the area.  Come on out to PIG next Tuesday night, 6:30pm @ the Civic Center (Pensacola Investor's Guild, PIG monthly meeting.)

Send me a note if you're coming, I'll keep an eye out for you.

@Shane Kelley VRs are definitely a niche strategy. I think many people start as they would in standard SFR's - at the lower end and then work their way up. In the VR market, this equates to condos.

I would urge anyone to take a hard look at the numbers of condos (Hint: HOA fees) and recognize that it's difficult to build up a loyal customer base as a condo VR owner since most travelers have an affinity for the community itself - not your individual unit. I think partnering on a larger primo beach-front VR is a better choice, over picking up a condo only to break even indefinitely.

I have an SFH that we use as a VR. It cashflows on par with an SFR, but I would argue there's far more appreciation potential. The tradeoffs for this advantage are:

1) Involvement. It's far less passive than a standard SFR. I liken my position to one part landlord, one part tour guide/insider, one part concierge service.

2) Risk.  It's a feast or famine niche.  The next storm, economic downturn, oil spill, or Zikapocolypse will signal a steep decline in VR demand.  That downtick could be short or prolonged, localized or global.

3.  Expenses.  VRs are more expensive to operate.  People expect a perfect house - spick and span without any loose doorknobs, creeky doors, stained carpet or any other ideosyncracies.  Additionally, there are many more items requiring maintenance: full furnishings, appliances, amenities, etc.  Don't forget utilities, including cable.  I did a lengthy post on expenses a bit ago that provides some insight.

Bottom line:  If you're a straight cash-flow investor, VRs aren't likely a magic investment.  If you're after appreciation, they likely have an edge.

I personally enjoy it, but that's because I enjoy the tourism market.  (But there are weeks like the one I'm having:  Current tenant overflowed the upstairs bathtub.  I've got ~30 hours after they vacate to sheetrock, tape & repaint my living room ceiling before a wedding party checks in!)

@Cory Capps I applaud your desire to take more control over your financial future. 

VRs are an interesting niche. The income is pretty easy to forecast based on the comps on VRBO/AirBNB. Check the rates and watch your competition's calendar to get an idea for the gross income. Expenses are a little different, but still forecastable.  I did a lengthy post about VR expenses about a year ago that could give you some insight. 

One of your biggest expenses are HOA fees. They will eat you alive in the condo arena. I would personally shift your strategy from multiple condos to a smaller number of well-located single family's. Another condo detraction is that repeat guests will feel loyalty to the condo community - but not your unit.

You've also got to watch your management fees. 100% management (20% of gross), 80/20 loan, and high HOA fees will be a break even cash-flow environment at best.

PM or call me if you want more info

I agree with all of the above. I've got one in Pensacola and it does very well. A strong management team is a must, both for the marketing/booking and the control/flow of the property.  I'm in the middle of transitioning to self-management, but I'm a local. 

Just like other REI strategies, you have to know your market. I would not be comfortable owning/operating in unfamiliar territory.

Example: Pensacola has a Blue Angels Airshow each summer.  That week can go +20% over standard peak summer rate.  Also, our schools return in early August, so our August is always slow, but picks back up again in September.  Exploiting these subtleties is where the profits are made.