All Forum Posts by: Jerry W.

Have you considered the cost of having an extra LLC in the business? I think it is $800 or more tax every year on every LLC you own regardless of if it is in CA or not.

@Jenny Gremillion, I have been in a few partnerships, some good some bad.  First get a clear understanding of what each partner will do and even on things about who decides what money is spent.  If you have different philosophies on how nice he furnishings are it could lead to trouble.  next you need really good lines of communication.  Call and ask about or text every detail you can.  Better for them to say please don't call about that anymore, than to have them be surprised and disagree with the money spent.  Make sure the division is very clear up front, and don't plan on changing it later.  If you hire a cleaner and they think your cut should include you cleaning it, things could go bad quickly.  Just some thoughts.

For me if you can afford it and it makes sense with numbers, it could be fun.  I have 2 vacation rentals in my home town.  They are way more work than is justified by the numbers, but they have been fun for the most part.

@Kevin Lefeuvre, my air bnb side is a lot fancier, but exactly the same size, but I average almost 30% more bookings in it.

@Travis Ward-Osborne, one thing to keep in mind, is that it is possible for the numbers to work for both a VR and a LTR.  So if you take a hard run ant VR and it doesn't pan out, perhaps you could turn it into a LTR and still cash flow.  It something to look at and a plan B for the VR.

@Christopher Curry congratulations on your deal.  It probably helps being a contractor to get repairs done, but it is still hard work.  The increase in value is huge.  I do not understand about the waiting list.  What is that about?  I am curious about your VR in Dolores County.  What kind of daily rates do you get, and what kind of guests?  I think of Dolores County as Dove Creek, perhaps because my brother lives there.  He is a mechanic.

@Jay Truong, there are literally hundreds of companies in Wyoming who do this very cheaply.  Usually for less than $300, and they usually act as your registered agent as well.  The filing fee is only $100, and the annual renewal fee is usually only $50.  

@David Ferreras, you are asking the right questions. There are a lot of right and wrong answers depending on your situation. People say put ALL your assets into an LLC or several of them, use Land trusts to be anonymous, and that charging order protection will protect you. First laws vary from state to state. Next anonymity works well if you have a team of folks working for you like property managers, agents to do closings, stc. The problem is that your LLC is dam good protection if you never work in your LLC and it is all done by others and you treat it like a separate entity. Like what @Scott Schultz and @Marcus Auerbach vposted, don't comingle funds, keep good books and do not undercapiatalize.  The problem is MOST of the folks on BP are hands on investors.  We don't have enough money to be able to make money without doing things ourselves.  A $50K property will not support the cost of a property manager,  paid plumbers, and electricians, and a paid agent to do closings and collect checks, a separate set set of books and bank accounts for each house, etc.  We tend to deal with the seller personally.  We meet and interview the prospective tenants, we go to closings ourselves, and we sign the mortgages and personal guarantees, and sometimes we do0 the painting or install the carpet, or fix the leaky faucet, or even take the phone calls saying we have a water leak.  it is impossible to stay anonymous in that situation.  I think one of the things that concerns you is that they sue you personally, separate from the LLC.  That is a common tactic.  It is obvious you have personal liability on things like driving the company car, but drunk and hit someone, if you hire a roofing company to put a new roof on, but it blows off and hits your tenant or a neighbor, it is hard to see how that lawsuit has any chance to win against you.  Putting all your assets into an LLC has some protections, but you lose a lot financially too.  You have to pay rent, you pay taxes on the rental income you get from you, you have to use a commercial loan, not a lower interest personal loan, you lose the tax benefits of selling your primary home or homestead tax exemption, etc.  The sheer number of books you must keep up would be expensive if you had say 20 different properties.  The idea of putting mortgages on all of your properties is also scary.  When you take out the mortgage on them who gets that cash?  If you take it all out, pay yourself, well that means you have cash somewhere they can attach, if you put a fake mortgage on t or leave very little cash in it, that can be a basis to pierce the veil.  It is not one size fits all.  I have too many properties in one LLC, but the idea of having a separate set of books, a separate checking account for each property, a separate set of meeting minutes and franchise renewal each year, etc is actually scary to me.  With over 20 separate buildings the paperwork to do it right would be huge and very time consuming.

I use an LLC in my name, but own all my personal assets as tenants by the entireties with my wife, but my wife does not have any ownership in my LLC. So my wife does NOT sign on the mortgages, and she has no connection to any lawsuit from being a landlord, and my property cannot be attached for any debt she does not owe. Not all states have those same laws and those protections. So you need a plan for you based n the laws of your state. There are also some big tax issues for doing these things that you need your accountants input on.

@Maan Najjar, I use VRBO/Homeaway and AIR B&B, I have a duplex and each side is finished and furnished quite differently.  One side is mostly VRBO with a few Air bnb, the other side rents almost exclusively with Air bnb and rents a lot more often then the other side.  It is strange.  It seems each site caters to a specific type of clientele.  Many of my VRBO listings are multiple days, but very few of my air bnb are for more than 1 or 2 days.  For me it seems the folks passing through use Air bnb, the folks coming to stay awhile use VRBO, weird.

@Rob Carey, Wyoming is no longer an abstract state, so title insurance is handled pretty much exclusively by the Title insurance companies.  As to general mortgages, as long as it is not owner occupied there are probably a lot of attorneys who can do that.

@Linda Landry, I have 2 STRs.  I did VRBO only for a little over a year, then added my second unit.  I added AIR B&B when I did my second unit.  My second unit does nearly double the business that my first one does, and 90% of it is from AIR B&B.  Yet the other side has longer stays and is 70% VRBO.  I think the sites appeal to different groups.  The styles of my units are very different.