All Forum Posts by: Shaival Patel
Shaival Patel has started 8 posts and replied 16 times.
Post: City STR regulations or lack there of…..
- Posts 17
- Votes 11
Quote from @Peter Mckernan:
Quote from @Shaival Patel:
I am located in Cypress, CA (north OC area). I have been exploring different markets for my first STR. Initial preference…. stay close to Orange County area/self manage. But each city in OC has different restrictions. Most baffling of issues is some cities have no STR mention in their codes but they claim that omission of STR is implied prohibitive in the city. Other cities require owner on premise to host, others have limited permits which are waitlisted. As you see, its all over the spectrum.
So is there legal way to get around STR restrictions on SFR? I have come across listings in all the cities where STR is restricted, and/or prohibited. What does that legal framework look like? And how risky it is to pursue one of these locals knowing city's take on STRs?
Hey Shaival,
OC basically has tighten all the restrictions up, now we are still each city tighten and take on their own requirements. This is market that many people work and live in which have pushed the STRs out. The next best thing is MTR, those you will see better returns on the purchase then you will a LTR and less than STR. There are a lot of areas in OC that have hospitals, contract work etc that you can use to have the safety of consistent tenants. This is the way you "get around" the laws. MTRs are the best returns right now for the market, and if you add add in buying a SFR, building an ADU and then MTR both you will be making even more.
Thanks for sharing your insights of the area. I am keen on STR for now due to bonus depreciation. But MTR is a viable option because I know how many travelling nurses we see at our hospital.
Post: City STR regulations or lack there of…..
- Posts 17
- Votes 11
Quote from @Michael Baum:
The short answer @Shaival Patel, is there is no legal structure to protect you from changing regulations.You will have to abide by the decisions that are made. What you can do is to get with other STR owners to lobby for positive or less restrictive common sense ordinances. Find common ground.
Otherwise there is not much you can do if the hammer comes down. Think of every entity working in the USA is bound by regulations. Even the biggest, baddest corporations who have millions invested in lobbying are forced to comply.
The absence rule is present in a lot of municipal codes. If it isn't spelled out, it is prohibited. That is pretty common.
You have called the various cities involved and know that STRs are problematic. It is time to move on. Trying to do them in an area where it is prohibited is a way to annoy all the neighbors and get fined for doing so. Don't be that guy. Just look elsewhere.
Post: City STR regulations or lack there of…..
- Posts 17
- Votes 11
Quote from @Collin Hays:
Quote from @Shaival Patel:
The city codes mentioned were verified by calls
to different cities. And yes totally agree with verifying and reverifying before a big investment.
I’m always fascinated by folks wanting advice on how best to break the law. If I was going to break the law, I’d probably go big, try to get into Fort Knox, and drive off with a Ryder truck full of gold bricks.
Quote from @Collin H.:
Quote from @Shaival Patel:
The city codes mentioned were verified by calls
to different cities. And yes totally agree with verifying and reverifying before a big investment.
I’m always fascinated by folks wanting advice on how best to break the law. If I was going to break the law, I’d probably go big, try to get into Fort Knox, and drive off with a Ryder truck full of gold bricks.
Not really sure how this advice was about breaking the law. When someone novice like me comes across a fork in the road, like I am here, I seek advice of people who are knowledgable in the matter. The question was about how legally binding "abscence of any rule of STR in code means it is prohibited". If a city prohibits or has some permits, the answer is obvious. Its not like STR regulation have been in existence forever. I am sure some of have seen the evolution of restrictions being wrenched up over years. But are there any legal structures exist where it could be of shield before city explicitly comes out with an STR regulation (for example an LLC). And in asking for any advice, its my job to explain the incongruency and inconsistency I am trying to resolve.
Post: City STR regulations or lack there of…..
- Posts 17
- Votes 11
The city codes mentioned were verified by calls
to different cities. And yes totally agree with verifying and reverifying before a big investment.
Post: City STR regulations or lack there of…..
- Posts 17
- Votes 11
I am located in Cypress, CA (north OC area). I have been exploring different markets for my first STR. Initial preference…. stay close to Orange County area/self manage. But each city in OC has different restrictions. Most baffling of issues is some cities have no STR mention in their codes but they claim that omission of STR is implied prohibitive in the city. Other cities require owner on premise to host, others have limited permits which are waitlisted. As you see, its all over the spectrum.
So is there legal way to get around STR restrictions on SFR? I have come across listings in all the cities where STR is restricted, and/or prohibited. What does that legal framework look like? And how risky it is to pursue one of these locals knowing city's take on STRs?
Post: STR and Sedona Az market
- Posts 17
- Votes 11
Hi,
I am looking to invest in STR primarily to utilize Tax benefit but also secondarily to diversify. Based on my readings, it seems imperative to maintain Cash flow through STR. Any advice if Sedona is a location that seems conducive to such a proposition. Regulations seems reasonable in Sedona but again my comparison point is Palm Springs CA. Initially was thinking closer to LA … Palm Springs, Big bear, Joshua tree etc. But more I dig, I am more convinced to venture to AZ. Scottsdale is also of interest. My budget is about $1M with leveraged financing.