All Forum Posts by: David M Trapani

Electronic payments from NNN QSR commercial tenants. Airbnb electronic payments for STR's. When I had multi family, sfh or condo LTR's we did Zelle, Venmo, PayPal or tenant would deposit directly into my bank account at the branch. A few times had property managers collect and distribute rents in Sacramento area, but mostly self-manged.

Yes, Palm Springs, CA. Turn-key furnished down to linens & kitchenware. Beautiful property. Fun to visit & pays for itself year-round. Currently booked to March 2021.Appreciated nicely. Did cash-out refi with lower rate. Used proceeds to acquire STR nearby La Quinta (before current permit moratorium). Making double mortgage payments to build equity faster.

1. Enter the name of the city and state of interest into your search engine;

2. Type in ABC City, XYZ State followed by the words: "Short term rental ordinance";

3. This should bring up the local laws (if any) plus any news articles on STR rules in the area, which are often hot topics;

4. If nothing comes up, it's possible (especially in outlying areas or smaller towns) there are no regulations - which if that's the case you have Uber private property rights and can STR to your hearts content - zero regulation;

5. If the City and / or County has a permit application process read carefully (before investing) as to whats required; some are flexible (easy) others such as San Francisco or Nashville are extremely tough;

6. Read all news articles to see status of the STR laws - As Nathan points out, this can be a moving target and rules and laws can change;

7. If you're in an HOA or your sub-division has C, C & R's read all governing documents and C, C & R's; Generally prefer to avoid STR's in HOA's because they tend to outlaw them or over regulate them; exception may be an extremely high demand vacation or tourist destinations;

8. Last but not least - buy in a high demand / tourist destination with lots of community amenities; during Covid esp within 2-3 hours driving distance to major cities i.e. Palm Springs vis a vis Los Angeles or Pigeon Forge, Gatlinburg, Sieverville vis a vis Knoxville, Nashville, etc. Always have an exit strategy and viable alternative use such as LTR; moving in yourself; make quality desirable "hard" improvements (if within budget, due respect to reserves, pay extra principal on any mortgage each month) to force appreciation; be prepared to have the best, most desirable property in the hottest location in case you need to sell or 1031 out due to changes in laws or political climate.

Best wishes & good luck Joe! 

STR's I've done have been acquired with conventional mortgages or private money. As Lee mentions, you can sometimes purchase them with a conventional loan with as little as 10% down under second home underwriting criteria. Ask your individual lenders. Also have acquired properties using LLC's in the past usually for MF. However, it's often not worth the hassle with LLC's (depending on your jurisdiction) because they can run afoul of STR regulations (many municipalities do not allow LLC"s to have STR permits) and also due to lending / title standards. Often it's best to buy in your individual name or living trust and insure well with STR insurance for STR's as well as umbrella coverage of $1M or better.

Agree with the other folks here, get specialized STR insurance. You may wish to add an umbrella too. You can get $1M, $2M, $5M or more for relatively cheap. Can cover all your properties. They generally provide more liberal coverage than underlying liability policies. Ask your agent or broker. They often won't advertise them. Great peace of mind.

Yes, it’s theoretically possible. However, because sellers carrying 100% you’ll likely need to add some improvements, increase rents and market value in order to do a cash out refi. Most conventional lenders won’t go 100% finance, maybe 75% to 80% on cash out refi, unless it’s hard money.

Alternately, it may be better (if possible) to put some cash down on the deal so seller isn’t carrying 100%. May get you to your cash out refi goal faster.

Another option to consider if you get to that point of the cash out refi, is asking the seller to continue to work with you in moving the note to another property you may then acquire (hypothecation). You would get to keep the existing commercial property and also acquire another investment property as well. It’s perfectly legal (check with your CPA) and often preferable to the note holder as they may wish to defer capital gains, they enjoy getting a monthly check (often at above market interest only rates) and have collateral as security. These types of deals can be a true win-win and may afford you the ability to fast track your real estate portfolio.

Best wishes on a successful deal or deals!

Hey Bonnie! Thanks for the shout out ( : Blessed former (CA) client invited me to visit TN some 3.5 yrs ago. Wow! Love it. Moved several CA equities here. Hope to do more. Bonnie your absolutely right! Clarksville is up & coming, as per Fortune magazine August 2020 (lists Clarksville, TN top 10 US REI investment locales - link below). Love Franklin of course, but also outlying areas growing Columbia, Murfreesboro, etc. Properties on or near the water (TN has gorgeous lakes & rivers) are hot as people edge away from big city & Draconian Covid restrictive lifestyle. Cheers & carry on!

https://clarksvillenow.com/loc...

Tennessee

Unless you need "cash out" of the deal (taxable 'boot'), I'd say do the 1031. One of the last best ways to preserve & build wealth over the long haul.And, they may take away the 1031, so get while the getting is good ( :