All Forum Posts by: Alan Hernandez

@Ian P. Great info. I've been trying to get solid answers on the STR rules in Chatt for a couple of weeks. I've been traveling full time for 6 years with one LTR self managed. I think I'd like a US base again so looking to do a house hack similar to what I stayed in, in East Brainard for a month in 2020; Upstairs 3/2 operating as STRs with a downstairs acting as a 1/1 for me when in town. It would be my primary residence so I thought I was good-to-go but I have been reading that it still is not a certainty on STR legality. I haven't been able to find details on the Chattanooga gov site either now. Do you know a good up to date resource?
I'm also thinking of visiting Chatt again between Christmas and MLK day since I'll be in the US. I'd love to buy lunch for any property managers working in STR.

Quote from @Ian P.:

@Kwambe Smith - absolutely! Simple short answer, here in Chattanooga, the city defines a short term rental as any rental where the length of stay is 30 days or less. The owner (if non-owner occupied) is required to have a business license, an STR license and is responsible for collecting and remitting occupancy and sales taxes among other requirements. However, we can still rent the property for any stay greater than 30 days without the required STR license and there is plenty of demand for these types of stays, call it corporate housing, housing for traveling nurses, mid term stays, doesn't matter the concept is the same. We are taking a potential or denied STR and converting to a fully furnished rental that we advertise on multiple distribution channels and still collect and remit the required taxes.

@Eamonn McElroy thanks. This is actually a great response. It illustrates what I was telling him that “There are many possible ways to handle this but you should talk with an expert lawyer and/or accountant”.

I think as he picks a direction this will help him see why he should get an expert rather than just assume the only option is for him to just send money & transfer deed.

Thanks.

@Mindy Jensen 

1. This is weird to get your reply while listening to the podcast with Jordan.

2. Yes agree as I stated in the post “He and I agreed this is a bad idea and he will do a more official purchase agreement that will ultimately be seller financing.” he will do an official agreement.

The question is if there are crafty tax efficient ways to transfer the property. I mentioned caution on quick deeds because of title insurance. I mentioned there are tricks within llc’s to more efficiently transfer to children... but I was just asking if there are techniques beyond just doing a standard purchase that may benefit since this has the special case of being in family. For example if she holds it and wills it to him, he faces estate taxes.

So asking about tax efficient methods for property to go from mom to son... if any

Thanks, @Eamonn McElroy. This just and to him this week but yes, he does need to decide a direction and is currently debating. 

The mom is very flexible (even willing to just give it to him) but while he could easily set up either payments or a lump sum to her (through a loan). The main question was if there is an ideal method in the realm of taxes. 

I am asking this for a friend in Kentucky that is now interested in starting in real estate. My default answer was "Talk to an accountant or attorney that specializes in real estate."
That said, his mom moved from Alabama to Kentucky to be near them. Now she realizes it is cold and just wants to uproot and travel for her remaining years. She has a house loosely estimated as 70k with 30k estimated repairs to bring it in line with other comps of ARV $150+. It also appears it could rent for approximately $1000 - $1200. She owns it outright.
The mom is pretty loose with it saying "Just take the house and pay me some money over time." He and I agreed this is a bad idea and he will do a more official purchase agreement that will ultimately be seller financing.
But I thought I would ask for him and for my education if there are any recommendations on tax efficient ways for him to acquire the house since it is in the family. He is not sure yet if he wants to go flip or rental with it. Thanks in advance for input.

@Cam Jimmy awesome post. Way to close out the year.

@Julian Mcclurkin I went to COREE’s meeting when I was in Ohio in October and met some good people. I’m coming back to Ohio in December for a month ir two to network and look at local opportunities. I’ll be hitting all the networking opportunities possible.