All Forum Posts by: Thadeous Larkin

@Aaron T. - ever find any good resources?  I've been looking for a reliable person since my guy left for California.  Aaaaaand I don't have Facebook, so I can't look for ads there.

@MaryAnne Burrows - here is the episode with @David Greene : 

BiggerPockets Show 257

@Russell Brazil - I'm sure you wouldn't willingly besmirch my character by saying I "added falsehoods" to my argument regarding the VA Loan. That would be unseemly. I'm going to chalk that up to you misunderstanding the argument I was making, so I'll copy and paste exactly what I wrote below for ease of reference (adding emphasis):

"Must we be forced to either leave our houses vacant or rent them to long-term residents only during those periods? Many of us use VA Loans to acquire properties, which specifically prohibit some long-term renting if we come back and don't occupy our property."

@Mark Manship already summarized what I meant above (see "I won't put words in Thadeous's mouth..."), and I don't mean to go down a rabbit hole about VA Loans, etc., here, but I think what you refer to as a "straw man argument" about being deployed (above) deserves some exploring. I'll provide the anecdote, since maybe it's something you haven't considered:

Deploying in the military* isn't a simple matter of "Well, you don't have to pay for housing over there, therefore you have no expenses!"  When you deploy, your at-home expenses don't just up and disappear (no matter how much I wish that were so).  For example, your mortgage is still due every month.  I know, it's very inconvenient.

I'm sure you're familiar with Basic Allowance for Housing (BAH).  It's what the military gives you in non-taxable income to account for different housing markets so that you can live off-post (thus saving the DOD the cost of maintaining houses).  So, let's use Colorado Springs as an example (since that's the city my topic was originally about).  Let's pretend the Army says "Hey Thadeous, you've got to head to Kuwait.  Not sure what's going on with Iran, but we need you staged near them immediately just in case things start going 'boom'.  You have to leave in two weeks."  Ok, great, this is what I signed up for.  I receive orders that send me to Kuwait.  In doing so, I get a FREE tent to live in, which is awesome (DJ air horn noises)!  However, I also lose my BAH for my house in Colorado Springs.  Soldiers might get a boost in pay while deployed, depending on where we are and our individual circumstances (you wouldn't get combat pay in Kuwait, some people get family separation pay if they are married, etc.), but it usually doesn't come anywhere close to BAH.  BAH of $1,800/mo in Colorado Springs isn't quite equaled by the hazardous duty pay or hardship pay of a few hundred a month.

Well, how am I going to make up the difference between my mortgage payment and the BAH that I lost?

The simple answer is, I rent my house!  The logistics of doing quick tenant screening, finding an appropriate property management company, and coordinating storing my household goods with my date of departure with the move-in date of a prospective tenant, etc. aside, I also have to let this tenant know how long they'll rent my house for.  When will I be back?  Military Orders GENERALLY (lest I be accused of promoting falsehoods, lies, or :Snidely Whiplash Mustache-Twirl: misleading arguments) only tell you a date by which they run out, not when exactly you're coming home.  So I have to do what...guess?

My options are basically 1)  Long-term rental agreement with lots of outstanding questions, 2) leave the house vacant and eat the cost of my mortgage every month, or 3) set up my house as a short-term rental.  Personally, I like the short-term rental because of the flexibility it offers.

To bring this out of the hypothetical and into the real world, when I deployed to Afghanistan this past winter, I was supposed to be gone for six months. Shifting events brought me back home in four. I had to sleep in a buddy's basement while my renters finished up their lease before I could move back in. Not the ideal way to come back. But that's because I had to guess that I would be gone for as long as the Army's best guess as to how long I was gone. I re-occupied my home within 60 days AFTER I CAME BACK HOME, so no DA PAM 26-7 owner/occupant VA issues.

So, for your consideration, I offer that STRs are tremendously beneficial to actual active duty military members (like me) and that we can potentially lose quite a bit financially when we deploy.  That takes on special importance in a place like Colorado Springs (again, the city that this post is supposed to be about, not just the merits of STRs in a general sense) where (rough guess based on 2011 numbers) around 30,000 military members live off-post in the community.

Therefore, I think we can all agree that anyone who opposes short-term rentals hates America.

(that last line is obviously a joke...please give it the requisite seriousness it deserves).

*See my disclaimer above in that I don't speak for the DOD, military, U.S. Army, or other services branches of the Federal Government.  That these are my opinions and not the position of those organizations, etc. etc.

@Joe Splitrock - And see?  You've helped identify my issue with the overuse of the term "reasonable."  The inference is that I, by opposing these regulations, am unreasonable.  But I'm not.  BUT me declaring that I'm being reasonable isn't terribly constructive either.  

Now, calling me "naive" later in your post is just plain impolite. Saying "regulations like this are a slippery slope to extinguishing the industry" isn't anywhere close to saying "I'm so ignorant that I couldn't foresee the City ever imposing restrictions." I'm sure we can talk about STR regulations without resorting to ad hominem attacks, can't we? Such behavior coming from a moderator, no less. Tsk, tsk.

So, it's probably more useful not to engage in fluffy absolutes (like whether or not I'm being reasonable...subjective terms like that are about as useful as "ugly" or "bad") and focus on the merits of the proposal itself.  You'll note that in my original post I offer my thoughts on the subject if anyone is interested.

My main issue with your post is that it echos just the type of criticisms that I hear about AirBnB all the time, namely that they are nonspecific and prone to exaggeration.

For example:  Where, exactly, are STRs "destroying the fabric of neighborhoods" in Colorado Springs?  Can you tell me which neighborhoods those might be?  Or which neighborhoods are being turned into "hotel complex"es?  Nobody can tell me exactly where those are or point to any specific negative impacts.  

Is there any study anywhere in Colorado Springs that indicates that property values are going down because of STRs?  That there has been a surge in nuisance calls to the police that are associated with STRs?  That all current residential codes are insufficient to curb any quality of life measures that are anecdotally cited ("I had trouble getting out of my driveway one day because the AirBnB guest next door parked too close!")?  

Nobody anywhere ever has cited any of that information to me for Colorado Springs.  And I doubt that anyone ever will.  Because that evidence doesn't exist.

It begs the question: when you're not basing city regulations on evidence...what are you basing them on?  

Here are some other questions to consider:

1) Is there any city ordinance that prevents me from engaging in exactly the same behavior as I engage in for my STR when it's not for money? As an example: My parents are staying at my house right now and parking on the street. What about a hypothetical wherein I charge my parents money for staying at my house - what suddenly makes this behavior different than when it's for free? How is that ripping asunder the fabric of my neighborhood?

2) I'm active duty military* and so are quite a lot of residents of Colorado Springs (Fort Carson, Peterson AFB, Air Force Academy, etc. etc.). We tend to be moved around (permanently) and/or deployed for short or long periods of time. Must we be forced to either leave our houses vacant or rent them to long-term residents only during those periods? Many of us use VA Loans to acquire properties, which specifically prohibit some long-term renting if we come back and don't occupy our property. What if we happen to live next door to someone who operates an AirBnB, then have to head to Afghanistan for a few months/an unknown period of time? We're just out of luck? Such regulations in effect, not in intent, limit the options of the service members who make up a considerable number of the Colorado Springs Community.

3)  Colorado Springs already has regulations on the books for operating a business out of a residential dwelling.  It's not unheard of to meld businesses with residential properties.  Not every business needs a storefront.  And I don't want to hear any arguments about increases in traffic - I would guarantee that those Amazon Prime trucks that go bombing around my neighborhood are more frequent and deliver more goods than any other residence-based business.

4) These regulations are onerous and unwieldy. Unlike the current registration requirements, these add layers of information that has to be sorted through for both government and prospective STR-owners. What associated costs and added bureaucracy will be necessary to map out where STRs are located and the spacing between them? Manitou Springs has an ordinance like this in place. I have NO idea where they consolidate that information, and it certainly isn't easily accessible. Not saying Governments have to make everything super easy for me, but transparent government is good government.

5)  Occupancy - this doesn't bother me too much, but since you ask what about it isn't reasonable, I'll answer:  Two occupants over the age of 12 per bedroom is pretty arbitrary.  My recollection of the city's ordinances on sanitary conditions/occupancy is that they are otherwise based on occupant per square foot.  So someone who has a conforming bedroom that measures 6' x 8' can stuff two adults and 14 children under the age of 12 into it, but someone with a palatial 20' x 25' bedroom can't have three adults sleep there?  Get out of town.  That's just poorly-written statutory construction.

I could go on and on, but I doubt anyone cares that much about my answers to you besides me and you.

In sum, I begrudgingly put up with non-evidence based ordinances, I don't celebrate them.  I certainly don't welcome them and shouldn't be expected to go along willingly with whatever new regulations are put forward under the guise that they somehow protect my investments.  They don't.

* These are my personal views and do not represent the views of the DOD, Department of the Army, the Federal Government, or any entity therein.  The views are entirely my own and are not express or implied views of any governmental agency.

If you've spoken with me for more than 10 minutes, you know I'm a big fan of STRs and AirBnB as both a host (SuperHost, in fact, nbd, just a celebrity here) and as a traveler.  I find that STRs are a great way to experience a city and stay someplace fun and unique.

The Colorado Springs City Council, however, doesn't seem to share my enthusiasm. If you've spoken to me for more than 15 minutes, you know that from atop my soapbox I have loudly proclaimed that the minute any Government starts talking about "reasonable regulations" on an activity, they are just talking about the thin edge of the axe and are using them to break down the door. Colorado Springs instituted their first STR regulations last year. And here comes the new proposal.

Today I received an email from the Colorado Springs City Planner notifying me of a public hearing for a new proposed "density" ordinance for STRs.  (credit where credit is due, good on the City for going out of their way to alert me to this travesty...they could have just snuck it into some vague public notice, but they specifically emailed me about it.  Also, credit to me for giving credit to them).

The upshot is that Colorado Springs is considering Manitou Springs-like regulations that prevent STRs from being close together.

I'll post the body of the email below so you can see what all it entails.  I can also offer my thoughts on the subject if anyone is actually interested and can go (I'll be in Chicago and unable to attend).  So if someone wants to be my proxy, I'll fire off my thoughts:

FULL EMAIL BELOW

You are receiving this email as you are either the owner of a property with an active short term rental permit and/or were the applicant for an active short term rental permit.

In an effort to be informative and transparent, the City Council has asked Staff to explore potential Code amendments addressing occupancy and permit density limitations. The proposed amendments will be presented at public hearing next Tuesday, September 24th in City Hall starting at 10:00 am. Interested parties should use the following link for more detailed information at the following link – https://coloradosprings.gov/city-council - after it is posted this Friday.

The meeting will begin at 10:00 am, but I am not sure what the order of presentations will be. Please be aware the order of presentations is established through the agenda.

To hit the high points of the differences between the existing ordinance vs proposed ordinances –

Current Ordinance

Occupancy

Occupancy is limited to no more than 5 unrelated individuals OR no more than 16 related individuals acting as one living unit.

Density

There are currently no density regulations for STRs.

Proposed Ordinances

Occupancy

“Maximum overnight occupancy of a short term rental unit shall be limited to two (2) occupants over the age of twelve (12) per bedroom.”

Permit Density

Three options will be presented –

1. Five-lot separation between issued permits;

2. Limited the number of permits on a block face;

3. 500’ buffer spacing.

*Note if any density ordinance amendment is approved, all permits that were issued previous to the City Council meeting will be grandfathered.*

As the meeting is a public hearing, anyone is welcome to speak in support or opposition regarding the proposed amendments.

Thank you all for being a part of the STR Program.

@MaryAnne Burrows - here's another consideration:  Where do you have or could you establish a team you can trust?  Ever read @David Greene's book about long-distance real estate investing (called "Long-Distance Real Estate Investing")?  He focuses heavily on the team that you're going to need to establish as your boots on the ground (GC, attorney, property manager, etc.).

I'm not saying having the team in place is a pre-requisite to determining where to invest, but it certainly can help.  It can give you a leg up, so to speak, if you already have a good GC in Charleston or you have a bunch of buddies in Missouri who can swing by a potential property for you to take a look at it.

The Larkin-Emmons Group, LLC (my company) invests in Central New York. It's not because of ANY of the factors listed (no appreciation, job market slowly shrinking, people moving out, etc.), but it works for us because I grew up there, understand it, and have people I can rely on in the area as part of our team. Nobody can pull the wool over my eyes about the place, since I have special familiarity with it.

As for Colorado Springs, that's where I currently live.  Great market.  Fantastic.  Expensive and competitive.  But with the right deal you can leverage hard money or alternate means to make the margins work.  Just something to think about.  Don't get analysis by paralysis, but a lot of people have a kind of investment philosophy like "I want to be the biggest fish in the small pond" or, alternately, "I want to show I'm the meanest, fiercest, strongest jaguar in the jungle, so let me at the competition."  Nothing wrong with either and lots of people find what works for them.

Feel free to DM me if you want any other info on Colorado Springs, investing in the military (I'm Active Duty Army, Hooah, etc. etc.), or any other topic you can think of that you might want to explore (like AirBnB properties or whatever) that I might know a little about.

Team:

Care about Short Term Rentals (see AirBnB) in Colorado Springs?  The El Paso County Assessor is holding Public Open-Houses about the topic to put out information and garner community feedback.

If you feel strongly about STRs, this is your opportunity to talk directly to the Assessor.  Topics may include, say, why taxing STRs as a commercial entity would price out mom-and-pop AirBnB operations and basically turn them into hotel operations.  Not suggesting that, just saying it's a possibility.

Thursday, September 5th (already over)
Tuesday, September 10th
Thursday, September 12th

5:30pm - 7:30pm 

Centennial Hall, 200 S. Cascade

Here is the Flyer

I'll try to go to one, but as some of you know - I'm more than full time in my day job, so it's hard to make any event that doesn't start at 7:00 or later.  So...I encourage you to rally.

@August Olgren - Welcome aboard! Glad to hear you're more than just curious about REI and are actively out there getting it done. Very cool. Would love to hear more about what you mean by "dabbling in the handyman business"

@Drew Fein (at Brown, Dunning, Walker) is an excellent real estate attorney in Denver.  If her area of expertise doesn't overlap specifically with your needs, then I'm sure she has a reference.  

@Vinny Martin : +1 to most of what everyone above has said. The VA Loan is an incredibly powerful tool, so read up on it and talk with folks (like me) who have leveraged it.

Let me add in a note of caution, because you are in a unique situation as a cadet.

Be hyper-cautious about fraternization.  It is punishable under the UCMJ.  As an officer, you need to take responsibility here.  The Air Force considers both lending to or becoming endebted to enlisted members to be fraternization, as well as entering into business relationships with enlisted members.  It's no joke, so don't even go near it.

That's my "under-the-cherry-tree" moment for you.