All Forum Posts by: Bill B.

That’s probably true, if you consider the bank as the “buyer”. After all in 80+% of the purchases they are putting up 80+% of the funds. They are definitely the ones that determine the price. It doesn’t matter one bit what the “person” who wants to eventually own the property after they pay off the lender wants to pay. If the man with the gold says no, it’s no. If the “buyer” with no money and no credit offers more than it’s worth he doesn’t get it. If the buyer with good credit and money offers half and doesn’t get it. He didn’t determine the value of the home, much less the price. 

I guess the easy example would be a slow motion auction with a reserve. The bidders can determine “their price” for the property but not THE price. Unless the seller agrees. 

Ps. This totally ignores the seller that lists a property under market (on purpose or by lack of knowledge.) and accepts the first offer. They obviously set the price as other buyers would have offered more. 

Pps. Realtors/zillow the seller and so on also do a lot of price anchoring. 90% of “buyers” would have no clue what they “want” to pay without a listing price. If they see a property listed for $800k they might offer $790k. But if it was listed for $600k they wouldn’t even think about offering $750k for the same property. Even if they knew there were multiple offers. (Of course the bank might stop them, or the appraiser.)

I would guess any easy way to find out if you have a chance is to try to hire a lawyer who only gets paid if you win. If zero lawyers say yes, your odds aren’t good. If a good lawyer says yes, then it doesn’t cost you anything. 

Is your lawsuit going to say the HOA should have forced owners to do the repairs? Maybe you should be suing the other owners instead? Most HOAs can't undertake major repairs without owner's input as they will be asked to kick in extra assessments.

Anyway. Step 1 with the lawyers should answer all your questions about viability. 

I don’t think you’re going to find any tenants willing to lock in a 60 day move in date. Most start looking the last month of their current lease. So they need somewhere to live in 3-4 weeks or less. 

Since you plan on living somewhere else in between. Why not advertise it for immediate move in and start moving your stuff to this alternative place?

I guess you got lucky and they only added a $275/yr fee and 21% tax on STRs instead of outlawing them. And didn't do a minimum space between units law. Or you'd have had 50 vacancies instantly with no notice. Nice to have enough demand that when the government adds 21% and now Airbnb adds 13% they can still find demand… (They collect 34% of the income for allowing you to operate. Good gig if you can get it. ) I don't know if you can be held financially responsible if your tenants "forget" to register, pay the taxes, or fail inspections but with the 5 figure fines handed out in Vegas per unit, I'd make sure of course I'd also make sure both you and they have STR landlord insurance policies instead of regular ones, hate to lose everything to a drinking minor. It's not for me but as long as you're collecting far over market rent more power to you. Maybe you could help the OP find a place there

Houston has updated its short-term rental (STR) regulations, effective August 1, 2025, requiring hosts to register their properties annually with a $275 fee and comply with safety standards like smoke and carbon monoxide detectors. Hosts are also obligated to collect hotel occupancy taxes (totalling 13%) and pay applicable sales taxes. The city is in the process of launching the online registration system for these new rules, which were implemented to address concerns about safety and neighborhood impact. Key Rules and Requirements

• Annual Registration:Hosts must register their short-term rentals with the city annually.
• Registration Fee:A $275 annual registration fee is required.
• Safety Standards:Properties must meet certain safety standards, including functioning smoke detectors, carbon monoxide detectors, and clear exit paths.
• Occupancy Limits:The number of occupants per rental is limited to ensure safety and prevent overcrowding.
• Tax Obligations:
  • Hotel Occupancy Tax: You must collect and remit the 13% hotel occupancy tax from guests (6% state tax + 7% local tax).
  • Sales Tax: An 8.25% sales tax also applies to the rental income.

$10-20k non-refundable deposit (goes towards the purchase price if sale goes through.) gives them the option to buy the property for “X” dollars any time up to 60 or 90 days after certification of occupancy is issued.  

Don't forget. Cost segregation and bonus depreciation aren't creating new expenses/tax deductions. You're reducing your future tax deductions by taking them today. So unless you plan to be unemployed or in a lower tax bracket soon. You're not making money or saving money by losing money on an STR.

If you’re going to make a good return on your cash invested great, otherwise just payoff some debt or put it in a high yielding bank account instead  losing $10k to save $3k in taxes isn’t “winning”  

TLDR: Google: Seinfeld -> Kramer explains write offs

So. They have to live on $800/mo.  Assuming their income is low enough they don’t have to pay any state or federal taxes…

Assuming they don’t have a car as the payment and insurance would pry be $800/mo.

Assuming they don’t have to pay any utilities as that would probably be $300-$400

Assuming all their food is provided by the school or that would be $300-400 minimum

Assuming school is costing them nothing out of pocket. Then probably not. Living on $25/day in California seems tough. 

Do they have a parent/parents that makes 3 x the rent AFTER paying their own expenses? Do you have no good applicants? Have you considered a PM? (For better screening, advertising, pricing, etc etc.). Is the property going to be expensive to repair if they skip out on rent and trash the place or is it more of a crash pad?

It’s your property, if you can afford to take the risk or have no other choice you get to make the call. But remember. Don’t go turning down a future applicant that only makes 1.47 times rent or you’ll be guilty of fair housing violations. As I’m sure  your written down qualifications say right in them 1.47x rent in income. Because if they say 3X, or they’re just in your head, that’s not legal to change the rules based on the applicant. Your PM would have told you this for free. :-) Good luck. 

Come on guys. 

I was going to say why only charge $300 over market rent? Why not charge $3,000/month? Make some real money  

Now it just feels like piling on. 

Rent it by the room. Move in and rent a few rooms to friends/relative/co-workers? 

What if rent was $100/month higher and over your mortgage payment? Would you suddenly be happy with your return generating $240/year if everything goes perfect? You would have made more just putting your money in a bank CD. 

If you need this property to cashflow, you need to sell. If you realize positive $100/mo and negative $100/mo are the “same” (They are.) then just carry on. Good luck. 

@Marcus Auerbach post about getting out of a city proper brought up another thought. Doing a 1031 to get out of a state with state income tax in to a state without. Or a state that decides it hates landlords. You could be escaping Florida’s escalating insurance, or Texas’ property tax. The neighborhood is doing whatever the opposite of “up and coming” is. Or the it has “up and come” and your ROE is ridiculously low because the value’s have skyrockets. Maybe it’s time to try the USVI?  I THINK California is the only one that will chase you down for their cut of your eventual sale. 

Ps. After hitting post I went for a walk and the first and only thing I thought of the entire way…

Too bad I didn't know ahead of time or figure out sooner that it would make a bad LTR. I could have tried a furnished STR or MTR the last 6-12 months. Filled the house with high end beds/furniture/linens/kitchen appliances and so on. Then if that didn't work out I could just sell/donate everything in my primary and move straight in. Live and learn.