All Forum Posts by: Jerry W.

@Trevor Gardner, a sub S election is probably ok for a flip business. I like an LLC for rentals. I do not use a separate LLC for each house. I tend to put several like properties in one LLC. You cannot simply move money between corporate entities. You really need to read up and understand how corporations and LLCs work or you will end up with problems like piercing the corporate veil. Treat each company as it were an actual person you were doing business with.

@Kenneth Rolfe, I name all of my VRs.  One is the Cozy house, it is plain, but very comfortable, kind of like visiting your grandma's house, one is the Bunkhouse.  It is decorated with all things cowboy and horses.  Wagon wheels, pictures of horses, log beds, antler lights, horse designs on couches, etc.  I tie the theme of the house to the name.  If the name interests them I hope the pictures capitalize on it.  For those who don't do that I don't spend any extra money by putting a name in the headline.  I often have the name of my house listed in my reviews.  My cowboy bunkhouse rental rents the best of any house despite being smaller, and I charge more for it.

@Cody Smith, this is a nice problem to have. I have been investing intentionally and unintentionally for over 40 years now. In looking back, all of us wish we had bought more properties. I know this sounds corny, but I sometimes put my real estate investing in terms of raising a herd of cattle. I understand that sometimes you have to sell some off to buy more. However if you can just add one or 2 to the herd instead of selling some off why not do that? I very often regret the ones I sold more than the ones I did not get bought. If you really want to have financial security in retirement then add don't just switch. If that is your only option then you may have to. Push yourself and come up with something creative. When I look to sell a property I often think what property is my biggest headache? Not what is my best property? Can you get a second mortgage? Can you get a HELOC, can you borrow from a relative using this house as collateral? You have other options you have not explored. Upsize your thinking and goals. Don't sell a good property to buy a great one, own a good property and a great one! Good luck either way bud. Thank you for your service.

@Gaganpreet Dubb, we have been hit with the usual wave of letters.  Do you have some other marketing plans?  Despite having been sent messages from a dozen kind of wholesalers I have only been able to buy from one.  Right now with a hot market it is hard to find a deal.  If you find some in the middle and northern end of the state feel free to contact me.  I am definitely a buyer though, not a wholesaler.

@Cole Simpson, one of the things I have found is that groups travel together.  You might be able to get a motel room for less than many VRs, but it is common for me to have 2 couples or couples and multiple children.  They can put many children in one house or 2 couples or more, split the cost and end up with half the cost of a Motel room.

Motels here run from about $180 to $80 per night, and vary from a small one bedroom, one bed, to 2 beds in one room.  My Vacations average about $50 per bed, so $100 for a 2 bedroom and $150 for a 3 bedroom house.  Rates vary a little with season but rarely more than $20 or so.  There is a cleaning fee ranging from $20 to $75 per visit.  I also allow pets for an additional $20.  Now when you add in the fees for VRBO or AIR BnB it is still cheaper.  The taxes are the same for both motels and VRs.  I think some like not having anyone come in, not even maids during the stay as well.

I also try to add a little local flavor.  My best unit is fairly swanky, Hickory hardwood floors, pictures of horses and cowboys everywhere, wagon wheels, ice and water dispensed in the fridge door, elk horn lamps, antique furnishings, lamps made out of mason jars, log beds, etc.  It adds some flavor compared to the plain Motel rooms.

I am seeing a slow down in sales in the middle of Wyoming, but I think it is because most of the inventory has been sold.  We are at maybe 20% of the inventory levels we saw last year.  Prices of properties still for sale are extremely steep.  The few houses left are very high.  That being said I have manage to buy a few houses this year.  The houses were very distressed though.

@Alex Moyers, there is an RV park in my town inside the city limits.  They rent out 3 RVs on AIR BnB and get about $70 to $80 per night.  They do fairly well in the summer.

@Nicole Norton, if you paid them money to file your taxes, and they took your information and did not get the returns done in time and did not file an extension, in my opinion that is malpractice.  Try in good faith to resolve it.  If that does not work as a last resort you can file a formal grievance with the Bar association of the state they are doing business in.  The Bar Association will look into the allegation and determine if the fault was yours or theirs.  My experience is that they are very strict with attorneys.  This should be a last resort, as it could mean fines or disciplinary actions.

Nathan,

I am guessing at least $20K to add another bathroom.  The plumbing is located under about a 6 inch poured concrete floor.  There is no record of where any of the sewer lines run so we would be cutting up and jack hammering at random to find the direction.  Then we have to build walls after we find and tap into the existing line.  I actually found the guy who built it and he said if he ever came through town he would look at it and see if he could recall where the lines run.  We had to build an elevated shower in order to get enough height to run the drain for it.  The Men's bathroom was what was converted into the tiny kitchen, but that was done before me.  Did you check out the link?  Thanks for sharing your perspective.

@Nathan Gesner, OK in December I did my biggest deal yet on a 1031 transfer. With the hot market I fixed up and sold a house in Worland that I had been working on part time for about 8 years. I did a JV with a contractor, who went $20k over budget and sold it for $15K over asking the day after it hit the market. I did a 1031 into 3 commercial properties, one local, one in Worland, and one in NM. I didn't really want commercial properties but I had to buy a package deal in order to get the local property. The main office for the business is about 1400 square feet located on the riverfront. I am struggling to rent the commercial shops, but am turning the main office into a nice AIR BnB house on the river. I currently have about $50K into the renovation and it might go up. I hope that the VR will gross about $6K to $7K a month during the peak season.

I also did a 1031 from a double wide I sold into a commercial office and shop 2 buildings from the river.  I converted the office into a 3 bedroom VR that I listed on AIR BnB last week.  The first week will gross about $2K in reservations which will easily cover a months mortgage payment, taxes, insurance, cleaning fees, utilities and sundry items.  

I also picked up a trashed small 700 square foot house where an elderly landlord had to evict a pretty mean drunk.  I saved him the trouble, fixed up the house and listed it yesterday.  I had hoped to just break even, but due to the recent high demand and by adding a washer and dryer I was able to get about $75 a month to the black.  I hate working on such small margins, but it is tough to stay in the game.  Interest rates scare me as I have a lot borrowed, but I have been doing this long enough my over all equity is pretty strong.  

Over the last 12 months I have sold 3 of my worst houses after doing rehabs, and bought a 4 plex, 3 commercial properties, a single commercial property, and a small residence.  Two of my deals involved 1031 transfers.  I think that I am going forward, but it is strange.  Being resourceful is the key for me.  Not many opportunities.