All Forum Posts by: Oliver Sparks

I am soon to close on a multi-family property in a c-class area near Kansas City.  Currently the tenants take their monthly payments directly to the bank for deposit.  I am aware of the methods of payment that different property managers prefer.  But I am curious whether the type of neighborhood/tenant plays a role?  Ideally I'd like to have them set up autopay, but sometimes some people don't have bank accounts.  Or perhaps I make it a requirement?  Curious what my fellow BP friends think.

@Lucas Carl Thanks for the advice. I do own some SFR's in areas that would be attractive to people wanting to stay just outside of the city. So I plan to use those, as well as manage some properties owned by others with the intention of using it as a short term rental.

@Ken Latchers thanks for the response. I should clarify, as I was really presenting two different questions. The LLC question was specifically aimed at finding out whether or not the same LLC used for construction can or should be used for doing short term rentals.

The other question about systematizing the AirBnB portion of the business is really a separate question asking for resources that others have used to help streamline the processes within the business.

I appreciate your response on taking the right approach and suggestions on insurance etc.

I'm curious to know whether it would be most appropriate to have a business (LLC?) for running an AirBnB business, separate from an LLC that is already used primarily for construction and rehab work. I'm wanting to build a system of short term rentals in the midwest, mainly in the Kansas City area. But I wonder whether it would make most sense for liability reasons to track these sorts of business transactions under separate businesses.

I'd also be curious to know what resources other people used to help learn the best way to systematize their short term rentals.

Any advice is appreciated!

@Sean McClure

I have crews doing rehabs in Kansas City for other investors as well as myself. And in this area the trend I'm seeing for rental properties is:

-LVP flooring

-if countertops do need replaced, do cheap laminate that looks like granite or quartz

-if there are tile backsplashes or on walls in bathrooms or kitchens, reglaze with porcelain enamel

-if wood floors, refinish them to look new

-get rid of old looking light fixtures and replace with brushed nickel

-repaint the whole house including cabinets

-get rid old old looking vanity tops. For smaller vanities it's usually best to just replace the whole vanity

-if toilet shows scum or the lid shows any form of wear replace it

-replace any mirrors or their hardware that do not look brand new

-be sure all windows function

-be sure all external doors are keyed the same

-new white vinyl cordless blinds throughout

The list is usually longer for complete rehabs, but hopefully you get the point. And many of these things don't take a ton of money. I tend to get above market rent for many of our properties simply because ours look much better than the others out there. And good tenants will be attracted to better looking properties. You'd be surprised how many people can afford higher rent but just can't find a good property. Hopefully this helps! Good luck!

Actually I haven't sold it yet. Some other items came up that needed repaired and I've used the property for other purposes since then. That said, I am back to this scenario right now since I plan to get it on the market soon. So I'm still open to advice!

Originally posted by @Enrique Huerta:

@Oliver Sparks Given your passion and commitment to this business, it sounds like you're headed down the route of becoming an investment syndicator. If you wanted to own 100% of these assets, then yes you need a job, income, large down payments, etc. If you're okay partnering with a capital partner, you can take down this portfolio of properties and still own a piece of it. Enough to get you some income, experience, and proof that your dreams are coming true.

Many people will tell you to slow down, get a job, etc. but everyone is different. If you want to make it happen, you can. I'm not trying to motivate you or anything, but it's what you already know is true. Some people are conservative and some are aggressive.

Man, I appreciate it!  Yeah that is motivating.  I don't think any of the suggestions given thus far are overly right or wrong, they're all just different for different reasons.  I'm a guy who thrives off of learning from others, giving it my all at all times.  So I'm wanting to grow the business in a way that does give me seeds of proof that things are working, knowing I'm doing the best I can, whether it ends up happening quickly or not.

Originally posted by @Nathan Brooks:

If you aren't in our Bridge Meetup group check it out. Lots of KC folks in there and could help you process through if you want that more local view point! Good luck, sounds like an awesome opportunity!

 Thanks!  Yeah, I definitely will use that group to assist in growing my team and pitch in with thoughts.

BP friends, I'd like some advice on how others have handled situations like mine, or your hypothetical "what if's" if you were in my shoes.

After reading countless books, listening to thousands of hours of podcasts, attending meetings and everything else it takes to get a good basic education on real estate investing over the last several years, I was getting nowhere and still struggled to find time for my family. So I left a W2 job recently to solely focus on this passion. (I know, some will say I'm crazy)

I've been working hard to move toward my goal of a 50+ unit rental portfolio, and I've been doing a pretty decent job of locating properties that would have good cash flow and having an opportunity to purchase them. But my biggest challenges have been these two things: 1) having an experienced resource to bounce my ideas off of who have the same or similar goals, to be sure I'm correct in my analysis and 2) funds.

Although I have helped others, mainly companies, obtain rentals, I have yet to land my own since I am struggling to land a deal without a current W2 income myself. I've tried a few times to approach the idea of seller-financing or some other form of creative finance, but haven't had any luck. It seems to come back to either no W2 job, or not able to provide a large enough lump sum up front.

That said, I am aware of a rental portfolio of 20+ SFR units in the Kansas City area with each property having a 1+ percent rule rental rate, that is available to purchase and not currently on the market. I would love to have them to greatly expedite my portfolio growth! And I know of some good property management companies in the area that could manage them if I chose not to.

But going back to my biggest issues of needing someone to bounce ideas off of, and a way to obtain the funds necessary to do the purchase, should I even bother going after this deal? Or should I have the "slow and steady" mindset that so many talk about as being the best way to grow a portfolio? I am eager to get that many properties at once, especially since this is my passion and I'm not sure how often an opportuny like this becomes available, but at the same time I don't want to do something dumb because I moved too fast. And as I mentioned, I recognized that I went so long getting nowhere before, so now I have a ton of motivation to start landing deals, even if it's partnering, to get the track record as proof for future deals.

Thoughts on the 20 units, or any other tidbits of advice please?

@JR Rivas Not sure if anyone else has suggested this yet or not, but have you thought about using the unit as a short term rental like airbnb? Depending on your area that potentially could bring you in higher yields, thus more cash, to get it paid down and reduces your risk. Just a thought.