📌 Yes: You can still close an STR and Cost Seg for 2025. Here is how...

[AJ Wong]

We're working on our 15th+ STR closing for the year - with several clients still hoping to invest AND materially participate this year!?

With just six weeks to go (including holidays!) here are some sure fire tips to ensure the desired outcome is achieved:

- Zoning. Zoning. Zoning. The best bet is a short term rental that is licensed, operating and the permit or license is transferrable. Many areas that do not allow for an actual transfer of usages and need a re-application (even if just a formality) will be cutting it VERY Close. At this stage in the game our advice would be to focus on STRs that operations can continue upon closing. 

- Timing. You'll need to be in contract within days..literally. Typical closings are 30-ish days. That's from executed contract, not including visits, tours, negotiations and holidays. Thanksgiving and Xmas tend to kill momentum...people are out of town, banks, lenders and title companies are closed. Same goes for cleaners, photographers and the supporting operations cast. To pull off a smart and efficient closing, you'll need to have a tight closing and launch sequence. 

- To expound a bit on the above, schedule inspections, appraisals and post closing requirements as quickly and as far in advance as possible. If you need to make some design improvements - have the furniture ordered the day or closing and the photographer soon thereafter. Same goes for repairs, design elements like painting or upgrades. Keep in mind - the listing doesn't need to be the final product! If the property is not your final vision at launch - that's ok. Better to qualify, participate and get bookings and come back when there is less pressure to perform.

- Team work = Dream work. The emphasis on working with professionals that operate in a high intensity, fast-paced space - consistently is paramount. From an STR focused broker familiar with regulations and getting properties launched, top-tier investment focused lender, responsive title agent and capacity for boots on the ground (especially if out of state) any one of which can be the difference in succesful execution.

What to watch for:

- Delays in ordering property inspections or appraisals. For example: If you're in contract this week but cannot get an inspection or appraisal ordered before Thanksgiving, chances are you're getting them (and any issues) back with just a week or two to close - and a week or two to launch and get bookings. That's a tall task for any buyer or investor. Try and get both ordered or confirmed within 24 hours of execution - if they can't schedule ASAP, find another reputable option. 

- Re-confirmation of STR permit or license-ability within 72 hours of executed agreement. Although an experienced STR broker will ensure investors are focused on eligible properties, all buyers should verify with the city, county or jurisdiction directly and ideally - as soon as possible. Investors should be familiar with the process and procedure and better yet...complete the application (even if it cannot be submitted until recording) prior to the expiration of their due diligence period. When possible - buyers should re-verify prior to closing.

- Gut instincts. If it doesn't feel right at any point - abandon ship and get better prepared for next year. I like to say tax incentives are not a reason to invest but they are a great reason. However - no amount of savings (for something you really would be paying otherwise) is worth the aggravation of a failed real estate investment. Due diligence should (always) be prioritized - especially with a discretionary investment that technically does not HAVE to be made. 

Good luck! 

[Andrew Steffens]

@Trent Reeve the hours are prorated so EOY is best/easiest as there is still considerable time on the front end of things getting it up and running.  If you close 12/15 for example you'd only need about 25 total hours.

I have a lot of clients pushing the limits too to get closed, just make sure its a cash flowing solid (and legally zoned!) asset, don't let the tail wag the dog!