All Forum Posts by: William Salas

Hi, William. I can imagine and recognize you're navigating some deep emotions with the whole ordeal. I'd also like to thank you for posting about the lessons learned in you and your father's scenario. Recalling back to many of the nightmare stories guests have told on episodes of the podcast, you are certainly not alone and I believe you guys can make a successful recovery. 

wishing you and your father all the best.

@William Salas, you could do a 1031 when they exercise the option.  That's no problem at all.  You'll pay tax on the option money.  

I would not recommend any sort of reduction in principle in exchange for rent.  This creates a beneficial interest in the property for the tenant.  And if something goes wrong you now have to foreclose instead of evicting.

And it would also jeopardize your 1031.  Since the payments of principle could create a deemed sale.  which would keep you from 1031ing when you later sell the property.

Congratulations on the purchase. I have used lease options many times and your thought process is solid. I don't know the numbers involved like how much you owe, but I would look at the benefits of selling it outright now or doing a lease option. I like lease options because in many cases the person never actually buys the house and I get to keep the non-refundable option payment and do it all over again. 

As far as having part of their rent go towards the purchase price I always give the potential buyer the option to make that decision. I would give them two rent options a lower price and a higher price option. If they select the lower price option then none of the rent income goes toward the purchase. If they select the higher amount then part goes toward the purchase price. That gives them some flexibility if their monthly cash flow is a little tight right now. 

As far as making the deal contingent on an appraisal at the time they actually exercise their option...I never have. I have always agreed on the price at the time the lease option was signed. I always took into account what I expected the property to appreciate in the option period. If the property appraised 30,000 below your agreed price it would not be an issue if they already put down the 65,000 you referenced. 

As far as the amount you require for the lease option I would not limit yourself. Advertise the property as a lease option and gain as much interest as you can. Then I would show the property to everyone that is interested at the same open house time frame. I would have applications on hand for anyone that is interested. On that application it would have a blank space for the potential buyer to write in the amount they can put down and what they can pay a month. With everything else being equal I would than select the person that can put down the most money with the best monthly rent income. The key is to let everyone that is interested know that you fully expect the property to go fast and the option payment and rent income will be a major factor in your decision. 

If you get several offers, which I expect you would, you then have the name and contact information of other potential buyers. Not only do you have that but you also know how much they can put down, what they can afford a month, and what type of property they are looking for in what area. Then you just need to go find the next house to meet each of their needs.

Sorry for getting long winded...hopefully something I said will be of use to you my friend. 

I finally had a few minutes to look at your listing...It's a beautiful property with lovely design. If you would like to add some more bang on a budget, I would add some fun Florida style wallpaper that goes with the decor style you already have in the property. Add it behind the beds, behind the living room couch or even two walls in there, or pretty much anywhere it would be a focal point of the room. Also, for a Florida STR you should have at least one neon sign and make an "Instagram wall." You need the property to pop and pop well for an area that has thousands of STR to choose from.
Here are some inspo STR properties that could help you see what I'm suggesting. A big disclaimer before a moderator has a problem...I'm in no way affiliated or connected to this STR design company. They have no idea who I am or that I follow their work so closely, because I LOVE all the STR properties they have done! Also, unfortunately these properties are not mine.

These properties would be good inspo for the wallpaper ideas or maybe even a little paint to add color and catch people's eye. Also note the styling they did for the photos. Another marketing trick is making potential guests feel like they can see themselves at your property.....The Pink Flamingo and Cool Tropical

The backyard is beautiful, and I would love to hang out there! If you can, try to add some other outdoor amenities that could be showcased in your listing and be a draw for guests. Amenities are huge right now and sometimes it's the simplest things that can make the difference. For only two full bathrooms I think your guest count of 8 is good, a general rule is no more than 3-4 guests per shower. And if possible, maybe add some more photos of the property and what is there. The OTA loves lots of photos and your listing can be boosted higher if you have between 30-40 photos.

Hope that gives you some ideas. I feel like your property can do well if you give it that extra punch. It's already beautiful but just needs those extra details. 

I applaud your transparency and honesty.  We need more of that.  All too often, we only hear of the successes of investing, and much of that probably embellished.  Good luck with your investing future.  Admitting an error is the first step.  Like you, I paid way too much for a property about a year ago, and I am selling it at a loss right now because it's never going to perform as I need it to.  

@William Salas Glad you posted your listing! Looks very nice! I have couple things you might want to consider.

VRBO: I did pull up your listing at VRBO and while you do have dog friendly mentioned in your title, you didn't select "yes, pets allowed" on the back end of your dashboard so travelers will not see your listing if they are selecting for dogs. You'll want to change that right away.

Calendar: I noticed your calendar is not open for April 2024 and after.  If it's blocked, your listing ranking will drop. If you want to improve your algorithms on the OTA's, you will want to open it up more.

Photos: It would be fun to have a photo with floats inside the pool. Helps to stand out from the crowd as people are looking at all the different listing with pools. You want your pool to show the best right.

Guest Feedback: If you have e-mail addresses of past guests, maybe you want to ask them if there is anything you can improve on in the property. They already gave you nice reviews so this is just private feedback and helps since they already know your place. It's possible by reaching out they will plan another trip with you too. ;-)

Keep us posted how this goes, we're all rooting for you!

Hey @William Salas, that is a tough row to hoe my man. So if I am understanding...

It sounds like it is profitable but on the low side. Maybe 3% or whatever.

How much did you add in value by fixing up the place? What is it's value now?

Can you 1031 into another property and walk away with a bit of profit?

Is your dad moved down to FL now? Do you have a good agent who can help you find a better property?

@William Salas props for sharing your story. We learn the most after making mistakes, and this community is all about learning. We often just hear the success stories…

Glad it was cathartic for you. Onward!