All Forum Posts by: Sarah Kensinger

Quote from @Ryan Duffy:

Thank you both for your replies and I think both make sense. From what I've read and researched I think you are both correct. Many transfer to LLC, but it's best being upfront with the mortgage company prior to doing so, as there might be additional risk there.

I've read a lot on Anderson's website previously but forgot about them. Would be a great resource to reach back out on. Thanks for the reminder and recommendation @Sarah Kensinger!

The insurance policy definitely covers STRs, and planning on the umbrella policy as well. Setup separate accounts (bank/credit) as soon as possible once through underwriting sounds like the course of action I'll take for now while researching LLCs and more.

Thank you!

If I remember correctly Anderson Advisors does not recommend telling your mortgage company that you plan on doing trust/LLC was after the closing has been completed. Double check on that if you reach out to them. It's not against the law and most mortgage companies don't understand how everything would work since they are not attorneys, all it does is murk the waters and possibly make the loan fall through. 

For a STR you couldn't get better insurance then Proper Insurance, you wouldn't need umbrella policy since they have everything covered and if you wish they offer higher amounts of liability.

Why is it ALWAYS the smokies people want to buy? The numbers for a property don't seem to ever add up to the sq footage and revenue of the property. I can see if you absolutely love it there and have a connection, but seriously there are 49 other states to choose to from and some of those have some pretty awesome STR returns.

We had planned on purchasing a property and then moving it into a trust/LLC after closing. Yes, it's totally legal and many many people have utilized the 2nd home loan to break into the REI world and then transfer things over after closing.

If you want to look further into this, Youtube has plenty of short videos that explains most everything you asked about. Check out channels Anderson Advisors, Clint Coons, and Toby Mathis. It also wouldn't hurt for you to possibly take the time for Anderson Advisors free strategy call, they can walk you through your particular set up. We love having them as our legal advisors! They take care of everything, and we know our business and properties are set up correctly and protected right! 

Yeah, I'm curious too! We know people that use them successfully, especially with boutique hotels.

Quote from @Sue Wiseman:

Did either of you, or anyone else sign up with them? 

I have just received the same call

This a legitimate business model for a STR company, but the website raised a lot of red flags and I would not feel comfortable doing business with them. We run a STR co-hosting company, and I also call up LTR listings if the property has been on the market for a while. But we are backed up by a large group of successful people who have done this for years, as well as an advisor that has been wonderful! From the looks of this website, they probably don't have an advisor helping them build systems, processes, etc. pretty much the whole business. If you would like to see the difference in websites, you can check out ours...the link is in my bio....it's a vast difference!

Something that confuses a lot of people is they think these calls from companies are a form a rental arbitrage. That couldn't be further from the truth! There is no lease in anyway shape or form! You would become an owner of a STR instead of an LTR. Pretty much instead of you looking for someone to run your STR, it's a company looking for you because your property is in a vacation area, or they realize it has great potential as a STR. But they should have exact numbers not just "I'll guarantee you get paid what you're asking for LTR". The payment method in the original post of this thread sounds like a half scam!

I wouldn't trust it in the least and this is even what we do! I would definitely check your options and get referrals if you're interested!

Quote from @David Masterson:

It currently is hitting the projected revenue YTD (2% positive above projected). The future projected revenue (remaining $30k to reach the annual projection of $105k gross is the unknown) - bookings seem to hit approx. 3 - 4 weeks prior to stay - meaning I wont known July until early June, August until early July, etc... Evolve is my host (10% fee direct to renter above the gross revenue numbers) with local cleaner / handyman. I'm "happy / ok" with current performance of property, just exploring options to free up cash - Typically I never consider selling my properties (all but this one are LTR), therefore wanted to see what would be attractive / do-able to STR investors. 3-5 year hold period was my assumption when purchasing this STR. I even thought about offering % share of property, etc... just looking for ideas and obstacles. I appreciate the input!

I was suspicious it was Evolve or Vacasa. What you're seeing with your bookings has been pretty frequent with other hosts, many bookings have been happening within 4-6 weeks of the check-in date. If you want to free-up cash definitely go for it, do what works for you! Like I mentioned earlier, most people are fine with 10% COC and with a different management company there's a good chance the property would totally outperform the airdna numbers. So, it might not be that hard to find a buyer.

Quote from @David Masterson:

Thanks you both! Good points - I do agree, 10% coc is slim considering unknown in 5yrs w/ balloon. Appreciate that comment - as I might look into balloon extension provision should conditions not be equal to or better than... Will be interesting to see gross revenue actual vs airdna forecast as time progresses. Currently trending within ~ 2% of airdna forecast for months which have booked / have bookings - but gap to 105k is big! Insurance was a pleasant surprise - Mid last year ins. provider exited the business (Bankrupt or ??) - Broker was able to place new companies at a savings to previous! (not sure how that will work in long run). 

Also, sorry if not clear: This is my property. I'm looking to understand what options may be interesting to STR investors incl. seller finance since I got lucky with timing @ 4.5% rates.

Just saw this...so since it's your property why is it not hitting the projected revenue? Is it the management company or maybe you self-manage? 

All other points aside the COC is way under 20%. I know most investors are fine with 8%-10%, but 20% is lowest we'll ever go on a STR home. Under that the numbers hardly ever make sense, and everything runs pretty tight. It might be better to find a different neighborhood with higher returns, or a home with a lower price point.

I've heard many good things about Well and Good and they're based right in Scottsdale!

As a born and raised central Oklahoma girl this was an interesting thread to read through! Several years ago, I got married and moved out of the state and my family is still there. The awareness of the weather and what all it does is still very much in me. Maybe the tornado sirens and excited weather people on TV can do a number to a child's brain that cares over into adulthood. :D

Roofs in Oklahoma rarely last more than 20 years, you're lucky if it's past 15! This is due to the large hailstorms (although like mentioned above they don't need to be replaced every time hail comes through), tornados, ice storms (although these aren't that often), the heat does a number to shingles, and the wind, oh my word the never ending blowing up to 40 MPH on a clear blue day for no reason wind! Metal roofing seems to do better, and I have many friends that haven't replaced a metal roof in about 20 years and it's holding up just fine. But shingles can really struggle down there. So hopefully that explains why you usually have to replace roofs so often.

The price you are getting does seem to be extremely high! Oklahoma is usually cheaper than most states in everything. BUT with that said you have to watch the quality of work; it can really be a cheap job sometimes! I always knew Oklahoma "work" was sloppy and for my perfectionist self it drove me nuts, now that I live in Ohio, I can hardly believe how sloppy some of the work can be!

And please make sure you get good homeowners' insurance in OKC! Depending on the location of your house, one day you may very well be thankful you had a completely covered home. Oklahoma is too risky not to have good insurance!