All Forum Posts by: Kenneth Garrett

@John Carbone

I agree John.  This is why when it comes to zoning you need to review each section in its entirety and each jurisdiction has a different set of rules. This should be part of everyone’s due diligence.

Let's be clear on this. Some jurisdictions have multiple commercial zoning districts. You have to understand the district you are in. Zoning is divided into different uses within different categories. An apartment building might be allowed in C-1, but not in C-2 or C-3. STR's typical don't have a category necessarily, but when you read the zoning definition of a hotel or motel it is similar. This is how some jurisdictions are prohibiting a STR in residential district because are using the hotel/motel which is a commercial use.

@Eric Sebast

If it is zoned Commercial I, go to that zoning district in the zoning code and take a look at the permitted uses. If hotels and motels are in the list you are probably ok.  Look at the definition of those uses, which most likely will say Residential of 30 days or less.  If it’s only allowed through a conditional use or special use then you’ll need to go through a public hearing.  Saying it’s in a commercial district is vague.  You need to look at the specific allowed uses.  If you are calling the city you will need to get a response in writing before you make such a large investment.  I was a Zoning and Building Official for many years.  Due your homework first and then you can ask relevant questions.

@Jacob F.

As others have said, you can't control what you can't control. I would say if you buy a STR in a tourist area where the economy is driven by tourism then there is a good chance you'll be fine. Even if they decided to license or enhance licensing of STR as long as your not the problem and you keep your property up to date without parking issues, parties, etc., I think your fine.

If the neighbors don't even know it's a STR then you should be good and that's the best scenario. Unfortunately, a few bad operators gives the whole industry a bad rap.

@Jianlan Sheng

I always go a little conservative at this time of year.  If my property shows way better then the others then asking for the top end can make sense.  Here is my philosophy; if I price myself too high and it takes 30-60 days to secure a tenant and if I would have adjusted my price by 5%-10% I’m actually ahead even if I am under market.  In your case, if you offer the rent at $9000 instead of $10,000 and it rented in two weeks you could actually be ahead depending on market time.

Each time I put a property on the market, I reevaluate the market rent and see where I stand.

Best of Luck.

@Nikko Tountas

Private money is a great way to fund BRRRR deals. After my first BRRRR deal one of my investors funded my projects at 100% of purchase and rehab.

@Nikko Tountas

So there are typically two scenarios when working with private lenders.

There is an equity lender where the lender is part of the deal and receives a percentage return at the end. This is typically the scenario for flips.

There is a debt lender, where they are paid a percentage return. An example would be a 10% annual return until the property is sold or refinanced to pay the lender back with interest.

You also can do a combination of the two. The great thing is you can be as creative as you want.

@Monica Boyles

I used the Short Term Shop with Avery Carl.  I know where I wanted to buy, my price range and cash flow I was seeking.  She and Luke were very helpful.  

@Lior Noach

I agree with @Nicholas L. you need to analyze each potential investment and see if the math works. I've bought plenty of foreclosures, but there are are a number of them I walked away from because the numbers just didn't work. You need a decent spread from the buy number to the rehab number to the ARV number. The goal is to force the equity to get all of your money out. This in reality is not the typical outcome. I've had money stuck in, in almost every BRRRR. Thank goodness in most cases I was able to recoup all of funds within 6, 12, or 18 months. Those are still good deals.

@Dominick Johnson

I think your goals are always changing. It’s an evolutionary process. As your own life changes so does your goals. There is definitely one constant in life “It’s always changing”. See some examples: college for your children, marriage, divorce, Illness, great success at your W-2 job, unexpected move, the list can go on and on.

When your working a W-2, your time is limited and those of us who have done well are able to manage it at a high level. I’ve seen people who quit there W-2 and they thought I have all this time, I’m going to crush it. Then they are not as productive and financing without a W-2 requires creativity.

It’s definitely a fluid plan. I had always set a total income in retirement at $10,000 a month. Once again, it’s a goal. You should cover all of your expenses plus saving money for unexpected things . I think saving 20% above expenses makes sense. It’s all relative.