All Forum Posts by: Wendy Vaidic

If you are going to buy wood frame make sure you’re paying less.  In Brevard County FL it’s about a 10k difference.  If I can get a block home for a comparatively equal price I would choose block over wood frame.  However, I would not pass up a home solely because it’s wood frame.   

We purchased a home under our LLC with the intention of flipping it.

However, we have begun to toy with the idea of keeping it as a short-term rental instead.

I know it can't remain in our flip LLC if we decide to do this or it will negatively affect the taxes & liability protection.

However, I am wondering if it would be better to :

1. Rehab it with the flip LLC and then sell it to the long-term business for a profit.

2. Rehab it with the flip LLC and sell it to the long-term business at the break-even.

or 

3. Transfer it to the long-term hold business immediately and rehab it under that business (we'd have to buy a new title policy doing this).  

Some aspects I'm considering:

A. If we fix it under the long-term LLC will it make segregating the different aspects of the house for accelerated depreciation easier because the company just replaced those items, and if so, would cost segregation be cheaper than the new title policy ($900.00)?

B. If we sell it for break-even will it be creating a situation where a lawyer could make a case that the two businesses are related and go the assets from both if there was ever a lawsuit?

Any input would be greatly appreciated!

Hello.  

We are working on a joint venture with a homeowner to flip his home in Florida.

As part of the agreement, he would receive a set amount for his home along with a monthly holding fee until it is sold to the end buyer.  

We would be paying the payments on a small mortgage he currently has on the property.  Also, we would be funding all of the repairs and improvements and would receive all funds above his agreed-upon set amount.

Since he would be the owner of record when we sell it to the end buyer, would he be hit with a larger tax bill because of the money we make on the house or would we each be responsible for taxes on our portion of the proceeds?

Have you ever worked under an agreement similar to this, and if so, how did it work out?

Anything I need to look out for when setting up the agreement?
Thanks!

Hi @Kerry Baird!  I hope you're doing well.  I use Federated National.  My house is just under 1700 sq. ft though, so that's probably some of the difference.

Hi Curtis. 

Vacation rental restrictions in Brevard County are different for each city.  

For Melbourne Beach and Indian Harbor Beach, and Cocoa Beach they are allowed because they did not have rules on the books prohibiting them prior to June 1st, 2011.  Each city has different rules about registration, inspections, etc.

They are not allowed in most areas of Satellite Beach, Indialantic (only in the tourist district on the East side of A1A), or unincorporated Brevard County. 

Satellite Beach and Indialantic actively crackdown on illegal rentals.  

As far as I know, unincorporated Brevard only shuts you down if there's a complaint. They are, however, currently working to re-write the zoning so it is more STR friendly, so this may open up more possible areas in the future.

The state of Florida has tried to eliminate the exemption for cities that had STR rules on the books prior to June 1st, 2011 but so far they have been unsuccessful in passing it.

You do need to register with the state and pay tourist taxes on the income.  

As far as insurance, live a block from the beach and I pay $2776  a year.  

Your taxes will be higher than a resident's because you won't have the homestead exemption. 

If you have any other questions feel free to reach out. 

It looks as if the cabinets are laminate, is that correct?  

What I would do with the cabinets would depend if they are wood or laminate. I tried painting laminate years ago and I swore I'd never do it again. That being said, there wasn't chalk paint and the other great products we have now. Perhaps someone has found a good product that works well on laminate cabinets. If so, I'd paint them. 

I'd replace the kitchen counters with granite, but I know that might be out of budget.  I am a big believer in granite both for aesthetics and for endurance. 

For the bathroom, I would have the tub and surround sprayed to update the color.  I would get a granite remnant for the vanity top & paint the vanity with the same caveat as above. 

I would tile the floor or lay a waterproof laminate in both areas.  

@Jacob D Adamczak Thank you so much for your helpful reply. It was exactly the information I was looking for. I'm leaning away from this route since I'm assuming they'll crack down on STR in N. Charleston sooner rather than later since it's already illegal. The idea of Corporate rentals is interesting, but I need to be able to use it on certain weekends until my son graduates, and I would not be able to do so using that strategy.

Thanks!

@John Underwood That's super helpful!  Thank you.

@John Underwood Thanks for the input!  Yes, we'd definitely want to be able to rent it post-graduation for the maximum profit.  I was thinking close to the base might be good for visiting Navy families & perhaps my son and some roommates could rent it during power school, but I guess close to the beach would be good for all families.  It looks like Charelston itself is way too expensive for us but the beach area might be in reach.  

Hi BP!

My son has just begun his 2-year journey training as a Navy Nuke in Goose Creek SC.  I am considering buying a place we can rent out either on AirBnB or to other Navy families visiting their students when we are not visiting.   I'd like to keep the purchase around $150,000.00 for a condo or single-family home but would raise the budget for a good cash flowing multi-family.

1. Where would you recommend buying to get the best cash flow that is STR friendly? By the beach, Goose Creek, North Charleston or other?

2. Who is a local Real Estate agent that knows the ins and outs of STR in the area?

3. Are there any local taxes or laws that I should be aware of with STR?

4. Who are some good wholesalers in the area that might have a property available?

Thanks for any suggestions!