All Forum Posts by: Dom Radcliffe

I have ben told to apply for and obtain Florida state business license/permit and a county business license/permit to operate STR in Polk county, FL. Can anyone already in this area help with advising if I need anything else? Thank you!

Hey @Laura Sima

Congratulations on taking the first step!

1. I do not think LLC is necessary for just one STR property. IRS treats a person/LLC the same, so if you are looking at tax benefits, then there is no difference IMO. You might have difficulty finding a good lender or better terms on your mortgage if you buy the property under LLC instead of person.

2. Your homeowners insurance should either have a short term rental rider or there are specialized STR homeowners insurance (like Proper) which should be adequate for mortgage purposes. Also, your lender might be able to point you in the right direction because they need proof of homeowners insurance before approving your loan.

3. I am not proficient to advise on this matter. Hopefully someone will chime in.

good luck 

My 2 cents: If numbers are looking good then don't wait and buy, instead buy and wait. At most, price drop would be about 10-20% max. We possibly won't see "crash" like in '08 because housing market is not the reason for inflation/recession in 22. I wish we had a magic ball to predict what will happen, but we can be certain that long term, these properties will hold their value and definitely appreciate. If COC/Cashflow fits your criteria, then as the old saying goes - "Some money is better than no money" :-)

No. You may use it for analysis to zone in on your intended market.

 How about credit card/debit card payments?

Do we need our cleaners to complete W9 if they are independent contractors and prefer payment electronically via Venmo or Paypal? I read that for payments processed electronically (credit cards, bank transfers), we do not need them to fill a W9, and it is only required if we are paying via checks or cash. Hoping someone can clear this confusion. Thank you.

Thank you all for providing invaluable advice and suggestions. 

Definitely going to talk to a RE CPA (I must admit, this is expensive, considering I just have one investment property as of now.)

I am recalculating and break-even point would be $250 nightly rate at 65% occupancy. How does that look? Attainable? This property is 2BR themed and rest are neutral. Not tier 3 theming, I would say somewhere between Tier 1 and 2. 

Thank you again.

Hello everyone,

I purchased a 5BR/5BA townhome with private pool in Davenport resort community for STR use and occasional personal vacation use. I am looking to self manage with a local team for ops/cleaning and some automation. I am assuming 75% occupancy at Average nightly rate of $275. I am getting a close to $1200 cash flow with 22% COC after accounting for fees and expenses. On a slightly conservative side, 70% occupancy at rate of $250 would produce a close to $450 cash flow per month with 8% COC. Using Pricelabs Comps and enemy method for 30 properties around, I have noticed similar rentals averaging $280-$300 per night (median, rather than mean) with 70-80% occupancy.

If it helps, my goal is to generate enough income so that property pays for itself. I am not looking to make a profit utilizing cashflow. I am buying and holding. 

I have two questions, and please feel free to ask any further questions regarding this situation. I can be specific with more details too.

1. Is this a reasonable strategy and do the numbers look okay?

2. Tax question: Assuming that annual gross revenue generated is $70,000. Annual expenses including mortgage/interest/op expenses is $60,000. When its time to file federal taxes, I am assuming I need to pay Uncle Sam around 20-30% of annual gross revenue, right? That is about $20,000 in taxes. So, effectively, I am actually -$10,000 in deficit when its all said and done! Or is there something else to this equation that I am missing?

This is my first experience with any RE investing. Thank you for reading and I look forward to your expert guidance and suggestions.