All Forum Posts by: Cody L.

As an owner I can tell you what I don't like: Please don't ask if you allow "corporate leasing". To me that reeks of someone that wants to do STR (which you do), but is trying to hid that fact behind a term that doesn't indicate what's being requested.

To me, a "corporate lease" would mean someone wants to lease a unit for their business and put it under a company name, and not someone that's trying to lease to STR visitors.

I need to make a cut-and-paste reply to this question like that dude who literally replies with a mile long message to everyone that asks about LLC. But the short answer is this: You're on the right path. You want to make a pitch you can send to owners. But you're going to have to offer something in return. A larger refundable deposit? Take care of work requests under $x? Slightly larger rent payment? Longer lease term? Take over new units at the building as they come up (if a multifamily). Otherwise they'll think "Eh, why not lease it to a 'normal' tenant?"

The best advice though?  It's a numbers game.  When you get an owner that replies, FOLLOW UP.  I can't tell you how many people have asked me about STR in Houston (could be units we actually ALREADY ALLOW STR at) and when my team says "yeah, we can do it", we never hear back.  I always wondered why that would be.  If you're sending 10000 emails, hoping to get 1% reply.  Of those 1% actually work out, etc.  You need to attack each positive reply you get at each stage of the funnel. 

Good luck...

I assume this is the Pitner deal?  What's your relation to this property?  I know the full story on it. 

 I was born and raised in Escondido (Orange Glen HS) and my parents still live in my childhood home.

Not to get into an argument but that's not true. Any time I'm buying a rental property, my bank is going to look at the DSCR. I just bought a triplex next to some properties of mine (just so I could have the extra land) and my bank financed based on 70% of the appraised value, or a 1.25x DSCR -- whichever was less. It could be a single family or a triplex.

The main difference you see between 4 and 5 units is the type of financing.  It's easier to get vanilla Freddie 'quicken loans' type financing on 1-4 family where 5+ will normally require a local bank or lender who holds the debt (vs. just originating the loan and selling it off)

 If you're doing it in Houston, it takes 10 min.  No need to hire an attorney.

First you have to get your certificate of formation / filing from Texas Secretary of State...

1) Go to http://www.sos.state.tx.us/
2) Go to "Business Filings -> SISDirect - Online Searching and Filing. Login (via new account or previous. Either way you'll likely need to put in a CC# before proceeding)
3) Go to "Business Organizations', then under "Web Filings" choose "Domestic Limited Liability Company (LLC)" (or different, if applicable)
4) Filing type -> Certificate of Formation (should be the only one)
5) Fill out your info.

The cost should be $300. Make sure forms they give you are saved as PDF to your machine

Next you have to get your EIN from the IRS. That's easy and free. Google "IRS EIN" for the link or go to https://sa.www4.irs.gov/modiein/individual/index.jsp (current link today) Remember that every year you have to file a "no tax due" or your account becomes in bad standing (as what happens to me all time since I just forget). That's done here: http://comptroller.texas.gov/taxinfo/franchise/webfile_franchise.html 

IMPORTANT: To do it online you'll need your taxpayer number (which is public and will be on the forms you've got from the steps above), BUT ALSO YOUR WEBFILE NUMBER. That number is ONLY mailed to you (paper mail, like the 1800's). So when I get them I have a database of all my LLCs, what their taxpayer numbers are, and then wen I get that letter I add the webfile number and recycle the paper. But make sure that webfile number is saved. If you lose it you have to call them (sucks) and ask them to mail it to you (1800's style)

IMO
#1:  77006 (only place I'd live)
#2:  77019
#3:  77098
#4:  77004 (some pockets, better if west of 288)
#5:  77002

After that it drops off quite a bit IOM.  77021, 77007, 77017 are acceptable class C spots. 

Hi John, always happy to help if you have any questions.  Just PM me here.  I don't log in super often but try to reply to as many questions as I have when I do. 

We have lots of people that lease single units of ours for STR. But they have to be at buildings we have that we've decided we're going to allow STR.

That comment is for our properties of ours that DON'T allow STR.  For those properties, if someone wants to do STR, they'd have to agree to basically take over the property or a building of units (i..e, if we have a 20 unit that's made up of 2x 10 unit buildings, we'd want someone to take on a whole 10 unit building vs. 1 unit in the building).   And yes, if someone is going to do that we have to make sure they're well capitalized and know what they're doing as we're allowing them to take on the responsibility of paying rent for a full property.

What we don't allow is, say, in a 20 unit building filled with long term tenants, to have someone rent a single unit in there for STR. It's unfair to our long term tenants and provides only negatives for us.

But again, if someone wants to rent just a single building in one of our properties that allow STR -- go for it. 

 I'm not sure what you mean.  I help people all the time here.  I just didn't want to share a link to my company's list of STRs as it could be viewed as 'advertising' and I don't use the site to advertise and don't want to be accused of that.

But I've sent it via PM.

I couldn't PM the person that asked as their account had been closed.

Unless you're talking about something else? 

I tried to buy their ~200 unit deal on Hackett earlier this year.  They couldn't have been less interested.  So if there is distress in their operations, they're not showing it.