All Forum Posts by: Jerry W.

@Wes Short, I have had a short term rental for about 6 months and not making much money, so take my advice with a grain of salt. AFTER I started one I began my heavy research. Before I got started I just looked up every STR on AIR B&B and VRBO and craigslist. There were not many. Then I looked at their prices. After I got started I got smart enough to check for availability and find out how far they were booked in advance and how many times they were booked. It appears my market is not that great for STRs. There is one strange exception. A local guy runs a outdoor recreational items like paddleboats etc. Who is killing it. He bought a VERY expensive house in very nice shape on the river.er, it has outside glow lights on it, fire pit, at least 4 bedrooms, etc. That guy also markets constantly everywhere. He is more than 3X my price per night, is by fat the most expensive STR in town and has 3X the bookings of any of us. Don't know if that helps but it is what I found out by doing booking research.

@Jonny Morris Why would you separate LLCs? Will you have 2 LLCs own the property? That seems kind of messy. How do the owners decide what to do? Who gets rent? Who pays for repairs? Who gets to take the depreciation? What if one LLc sells it's share? There would be no prohibition. I cannot see any value in having multiple LLcs own part of a property. Are you going to create a monster contract for what each LLC can and cannot do? You could do it yes, but why would you want multiple LLCs owning the same property?

@Kwame Knights, last I looked Wyoming did not have series LLCs. Couple of quick questions. Will you self manage or have a property manager? Who will be the trustee of the trusts? Someone must sign papers. Who will be the managing member of your LLCs? Who will sign your checks for things like taxes, plumber, insurance, and who will be authorized to sign for checks from the bank account for your master LLC?

@Gaurav A., I have done some loans like you are suggesting.  Mine have always been with a smaller local bank.  If you have all of the money for down payments etc. I would think it is possible.  It might be tougher to get a loan in your personal name with 2 properties.  My loans on more than one home has always been under my company name.  It sounds like you want to do a new purchase of both at once.  The timing can be tough as both need to close at the same time and the sellers might have conflicts on when they can close.  I really like refinancing a loan to buy a second property.  I have done those with no money down where I have a lot of equity in the first property.  The drawback is if you want to split the properties up later to sale.  you have to negotiate with the bank before you sale on how much of the proceeds will be applied against the loan balance.  If you do not work that out the entire amount of proceeds go to the existing mortgage.

@Jonny Morris, just off the cuff, first set up an LLC with both of you as members. Have a very thorough operating agreement. I mean very thorough. Have for, who puts up the money, how much, who does what work, who does work you didn't think about, who does the books, what happens if you need more money than you thought? What happens if one of you does not do what you were supposed to do? How do you break a tie if you disagree? The big one is how do you end the deal if it goes bad? what if one of you dies or becomes ill and cannot do work? How do you split profits if you dissolve it? What about the doctrine of opportunities? If a new deal comes up does it have to go to your LLC or can one of you do the deal and exclude the other? What about a deal far away? What decisions can be made without consulting the other person? What will you do if you cannot contact the other person? There are a ton of things that need to be set out now, so they are not as big of a problem later.

There are so many great people in on this thing.  I am trying to free up my calendar but it is hard.  It is funny, it costs 3x as much to fly to Denver from WY as it does to fly from Denver to Philadelphia, and flights are scarce.  which airport in Philadelphia is the best one to fly in to?

@Jeff F., excellent news.  Things are starting to move here as well.  As summer comes in renting will get even easier.  Thanks for the update.  If I get to Cheyenne this summer I will try to give you a shout.

@Jennifer Soelberg, I have only been doing STR a short time so tack my advice with a grain of salt. I bought most of the furniture from one estate sale. It all matched and was in pretty good shape. I picked up one or 2 nice items that I added. I actually put pictures up on the walls, hangers in the closets, outdoor grill, everything I could think of. I put a note pad on the table and write a nice note telling them how to get in touch with me, and to please let me know if anything needs addedto what I supply. One thing I was told was a cutting board would be nice. I leave cheap granola bars on the table and a bottle of water in the fridge for each person staying. I used nice colored towels until a very nice renter washed them together, now all my towels are whit except one for makeup. I wash the towels on hot and add bleach so they are sanitized. I also ask them to leave me a 5 star review, and if it wasn't 5 star to please tell me what I need to do to improve it.

Thats all I can think of for now.

@Tim Tele, you really didn't give us enough information to help you much.  You might want to try out the book Scott Trench wrote called Set For Life.  If outlines how to get your finances under control and save to invest.  There is also the famous Dave Ramsey line of books that have helped millions.  Try reading those and see if that helps.

There are so many really good and true statements here that I love, like @Jay Hinrichs long post. It is dead on correct. There truly are some ways to avoid liability. There are some very good posts with very bad advice buried in them as well. First off the only way to truly avoid liability on your assets is to not have them be your assets. All this hype about them not being able to get money or property out of intervivos trust is incorrect, you cannot make a trust to yourself that you control and keep it away from creditors. It is stupid in some cases. Now an irrevocable trust can keep assets away from creditors but you must turn over control permanently to someone else. How many folks are willing to do that? Are you willing to have no say in what houses are bought? Or how much contractors get paid or what tenants get placed? Not me. Lawsuits do happen, many are not justified, they are getting worse every day, still you are much more likely to have a natural disaster then a lawsuit. A flood, a tornado, or hurricane, a fire, landslide, windstorm, hailstorm, blizzard, major economic recession, etc. LLCs do work, at least in my state. it is dam hard to pierce an LLC in Wyoming. One of the best ways to pierce the veil and get to the person behind the LLC or corporation is siphon off the assets with fake or fraudulent mortgages. Do you really think they won't look up who got the mortgage? If there was not money exchanged or if the money went into the pocket of the LLC owner it is one of the best ways to get sued personally. You create more liability by doing the fake mortgage than you prevent. Folks say no the mortgage isn't fake or fraudulent. OK so why did the LLC suddenly need money? Why isn't that money from the mortgage deposited into the LLC? Think about it. You have a paid off property worth $200K and you get a mortgage for 80% or $160K, where did the $160k go? If your LLC now doesn't have the money to cover a $50K lawsuit it has been intentionally under capitalized. That is a basis to pierce the veil. Much of the advice here is good, but some is dead wrong. The folks giving the advice are kind, intelligent and it is great that they are sharing their knowledge, but they are wrong and if you follow the advice it could cost you a lot. Having different LLCs or entities does break up the potential liability by limiting damages to only those assets in each LLC, IF the activity is liable to the LLC not the person who did the act! Example drive the company car drunk and run over a kid in a crosswalk and all the LLCs wont stop the lawsuit that goes after all your assets. If it is a slip and fall it will stay in one LLC. The proper LLC will in some states keep the damages limited to a charging order. That means they can garnish your payments directed to you by the LLC, but cannot take your place in the LLC because you cannot force a new partner on the other owners. I do not think all states have charging order protection, but again my state does.