All Forum Posts by: Sean Williams

Thank you Dave, this is exactly the information I was looking for...the Drop and Swap founds interesting, I'll check out your resource and dive into it. I'll be in touch, thank you!

Greetings - looking for some guidance on a situation:

Currently myself and 2 other business partners own a property in an LLC (33% ownership each).

We will be selling the property for roughly $4M, and then dissolving the LLC following the sale. For simplicity sake, lets say the sale nets $1M total or ($333k each) before capital gains taxes and recaptured depreciation.

My question:
Is it possible to take my portion of the proceeds ($333k) and reinvest it into another property on my own via a 1031 exchange? I know typically that title to the new property would remain with the existing LLC, however since we will be going separate ways and dissolving the LLC, I am trying to find a way to avoid the capital gains and depreciation recapture for myself personally.

If it is in fact possible, how does title work for the new property? Along with the purchase price and debt requirements on the new property?

Thank you in advance!

Our guests complete a "check-in form" prior to us sending the check-in instructions, which asks them to confirm their email. They also provide when they log into our wifi. They don't mind at all.

Hi @James Guillot, I am a local real estate broker of 15 years and investor myself…I’d be happy to help. Feel free to message or text me. Thank you!

@Tristan Scott Zell lucky the property did not require any zoning changes, C-2 allows residences here in Louisville. The benefit is that we just submit our paperwork for STR approval since its commercial, vs. getting approval that is required for residential zoning.

Investment Info:

Large multi-family (5+ units) buy & hold investment.

Purchase price: $1,250,000
Cash invested: $2,100,000

Open as of March '22, BUNGALOU "Stay & Play" is concept that blends over-the-top accommodations with a laid-back atmosphere. Our motto "Built for Many, Great for Any"...our “Boutique Airbnb” is suitable for 31 guests in a single stay.

:: Onsite Bourbon Bar: Neat Bourbon Bar/Bottle Shop
:: 3,000 sqft Gameyard + 750 sqft Rooftop Deck
:: 6 Luxury Suites w/ 4 Package Options
:: Phase 2 will bring 4 more suites that can sleep an add'l sleep 20+ guests (next winter)

What made you interested in investing in this type of deal?

In 2019 we were BRRR'ing single family homes and were really wanting to move up to a multi-family property. We originally purchased this property to do a light rehab and keep as long-term rentals, but after getting started we had to pivot and change course to short-term rentals to ever have a legitimate chance to recoup our investment. This was due to the fact the property was in such terrible condition, we essentially had to tear it down and start over.

How did you find this deal and how did you negotiate it?

Our electrician knew we were looking for an apartment complex with 10 +/- units. He was doing some work on this property so he introduced us to the owner. At the time, the owner had had the property for 40 years and was having trouble keeping up with the property. I got her number and called her immediately...the next day we were sitting at her dining room table hammering out a deal in person. Her price was $1.5M and we were able to agree to $1.25M with no due diligence period.

How did you finance this deal?

We originally got a small commercial construction loan, but after starting we realized we needed ALOT more money. The property essentially needed to be torn down but we were in a historical district so we were forced to fix what was existing. Lucky our lender let us increase our construction draw through a refinance. We actually had to do this 3 times because COVID caused our constructions costs to skyyyyrocket. Towards the end we also implemented private financing to finish.

How did you add value to the deal?

All layouts were reworked for a modern layout, and suites can be easily combined for larger parties. Every square inch is BRAND NEW from foundations to framing to mechanicals We added top of the line finishes and furnishings, but also found the perfect tenant for our attached commercial space: a bourbon bar for our guests. We also added a 750 sqft Rooftop Deck, and a 3,000 sqft turf gameyard....all unique amenities that everyone seems to LOVE.

What was the outcome?

6 Luxury Suites that can be rented separately, or easily combined to sleep up to 31 guests. We have 4 additional suites waiting to be finished towards the end of '22 that should accommodate an additional 20 guests. Our commercial spaces have been leased to a local bourbon bar that is a great marriage for our guests. Financially, we hope to generate enough income to cover our costs year 1, and then refinance within 1-2 years while we work to creatively increase revenue and revenue sources.

Lessons learned? Challenges?

Purchased 2 months before Covid...so needless to say that was a battle all unto itself. Due to tenant eviction restrictions, we had to pay our inherited tenants to leave. Covid caused delays w/ permitting and supplies...also lumber prices quadrupled. We had major foundation issues that had to be fixed that never could have been seen without demoing the walls. We learned a great deal of persistence, resiliency and everything construction related. Plus asking the bank for more and more money!

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

One of our business partners is a real estate broker - Sean Williams with Remax Premier Properties. Financing was provided by Liberty Financial.

Investment Info:

Large multi-family (5+ units) buy & hold investment.

Purchase price: $1,250,000
Cash invested: $2,100,000

Open as of March '22, BUNGALOU "Stay & Play" is concept that blends over-the-top accommodations with a laid-back atmosphere. Our motto "Built for Many, Great for Any"...our “Boutique Airbnb” is suitable for 31 guests in a single stay.

:: Onsite Bourbon Bar: Neat Bourbon Bar/Bottle Shop
:: 3,000 sqft Gameyard + 750 sqft Rooftop Deck
:: 6 Luxury Suites w/ 4 Package Options
:: Phase 2 will bring 4 more suites that can sleep an add'l sleep 20+ guests (next winter)

What made you interested in investing in this type of deal?

In 2019 we were BRRR'ing single family homes and were really wanting to move up to a multi-family property. We originally purchased this property to do a light rehab and keep as long-term rentals, but after getting started we had to pivot and change course to short-term rentals to ever have a legitimate chance to recoup our investment. This was due to the fact the property was in such terrible condition, we essentially had to tear it down and start over.

How did you find this deal and how did you negotiate it?

Our electrician knew we were looking for an apartment complex with 10 +/- units. He was doing some work on this property so he introduced us to the owner. At the time, the owner had had the property for 40 years and was having trouble keeping up with the property. I got her number and called her immediately...the next day we were sitting at her dining room table hammering out a deal in person. Her price was $1.5M and we were able to agree to $1.25M with no due diligence period.

How did you finance this deal?

We originally got a small commercial construction loan, but after starting we realized we needed ALOT more money. The property essentially needed to be torn down but we were in a historical district so we were forced to fix what was existing. Lucky our lender let us increase our construction draw through a refinance. We actually had to do this 3 times because COVID caused our constructions costs to skyyyyrocket. Towards the end we also implemented private financing to finish.

How did you add value to the deal?

All layouts were reworked for a modern layout, and suites can be easily combined for larger parties. Every square inch is BRAND NEW from foundations to framing to mechanicals We added top of the line finishes and furnishings, but also found the perfect tenant for our attached commercial space: a bourbon bar for our guests. We also added a 750 sqft Rooftop Deck, and a 3,000 sqft turf gameyard....all unique amenities that everyone seems to LOVE.

What was the outcome?

6 Luxury Suites that can be rented separately, or easily combined to sleep up to 31 guests. We have 4 additional suites waiting to be finished towards the end of '22 that should accommodate an additional 20 guests. Our commercial spaces have been leased to a local bourbon bar that is a great marriage for our guests. Financially, we hope to generate enough income to cover our costs year 1, and then refinance within 1-2 years while we work to creatively increase revenue and revenue sources.

Lessons learned? Challenges?

Purchased 2 months before Covid...so needless to say that was a battle all unto itself. Due to tenant eviction restrictions, we had to pay our inherited tenants to leave. Covid caused delays w/ permitting and supplies...also lumber prices quadrupled. We had major foundation issues that had to be fixed that never could have been seen without demoing the walls. We learned a great deal of persistence, resiliency and everything construction related. Plus asking the bank for more and more money!

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

One of our business partners is a real estate broker - Sean Williams with Remax Premier Properties. Financing was provided by Liberty Financial.

@Adam S. Not so much bumps, just some headaches dealing with the neighbors should they have a concern. They are are owner-occupants you can almost guarantee that they will push back.

Hey @Adam S. I have been through the process a few times...I am assuming this is not your primary residence? If it were, that would just be a matter of filling out the paperwork and paying the fee. As an investment property, I have outlined the process below from what I recall.

All of the information for Jefferson County is here: 

https://louisvilleky.gov/gover...

1. As an investment property, first you'll check the map link to see if there are any already within 600 feet. Even if there are, you can request an exemption but would need a viable reason. https://lojic.maps.arcgis.com/...

2. From there you'll submit required paperwork for the Conditional Use Permit...it is relatively detailed but not too hard. They will assign you a case manager to review the documentation once you have submitted. You will also need a Lou Metro Revenue Commission tax registration #

3. You'll schedule and mail out invites to neighbors, and neighbors of neighbors for a "townhall meeting". I did mine at a nearby church before and was surprised at the number of folks that showed up to express concerns. I discussed with them the plan and our parameters and addressed any concern they may have. As you can imagine STR has a negative connotation associated with it so the neighbors were not excited to say the least.

4. Lastly, you'll go in front of the Planning/Zoning committee to review your case. This is the opportunity for the neighbors once again to express any concerns to the committee. Assuming all goes well, you'll be issued your CUP and you're off to the races.

@Joseph Tineo yes still using FollowUp Boss and love it. It has all kinds of bells and whistles but I still use it for the basic follow-up reminders. I am convinced you wont find anything as robust yet as intuitive to use.