All Forum Posts by: Todd Goedeke

@Dan H.no I was not speaking specifically about STVRs in WI. My comments apply to the hospitality business in general. 

Very few people buy a business solely in hopes of building that business resides in goes up in value. Investors would fire you if all you could provide is  a meager 5% return with no guarantee of appreciation. Buying a property for use as a STVR with little or no positive cash flow is bad business management.

@John Underwood absolutely agree about LTRs being a RE play regarding appreciation .

@John Underwood one of the greatest myths of all is that the way to wealth in the STVR business is owning properties. STVRs is a hospitality/ management business . It’s not a business based on RE appreciation. It’s a business based on generating high net cash flow from a property. The building is a means to an end. It’s not the RE making the money ( other than buying/ building at favorable pricing). It’s the business housed inside the building that makes the money. High quality hotel brands are owned by investors and  triple net leased to management companies. Investors don t invest for RE speculation they invest for cash flow.

There are thousands of investors who are professionals, small business owners , professional athletes, entertainers , high 6-7 figure incomes who buy RE to benefit from its cash flow. They don t need to speculate on the “ maybe” of RE appreciation when they can earn a passive 17%+ tax free return from their leased STVR property/s.

@Hunter Beck I would revise the order of your steps. 1. Feasibility study; network with other STVR builders using containers. Is there a demand from vacationers for such a property? Do people pay premiums to stay in one , if so, for what reason?2. Get plans drawn and get estimates from subs to get a total cost price for property. If there is no cost savings don t use containers.

Investigate use of ICFs for a build as you can build from foundation to rafters on a DIY basis in less than one week.

@Corby Goade he specifically was referring to STVR which allows one with material participation to offset any taxable income not just passive income. It could be income from IRA conversions,capital gains , or W-2 income.

$200k in cost seg deductions can offset the tax on conversion of $200k in an IRA or Solo 401k to a Roth account.

@Sean Gallagher look at cost segregation from the standpoint of time value of money. It is obviously better to have $1 in passive losses to offset taxable income today vs $1 in losses 25 years from now.

If I have a $1 million dollar short term vacation rental , using cost seg I will be able to deduct 35% ( example number, not exact) or $350k this year. Because of material participation I can deduct that $350k vs other income.Using combined federal and state tax rate of 40% x $350k = $140k in immediate tax savings. That $140k could be used to buy another investment immediately.

Don t worry about future reduction in deductible expenses. Immediate savings in taxes are more important.

@Kyle Smith be more specific. What can’t you find within 15 mins of PF or Gatlinburg, a lot to build on or an existing property? 

@Shravan Hemchand shop around ,you should be able to get a cost seg done for $1,500-$2,500.

Contact a couple tax attys. Ask them for a recommendation.

@John Underwood is there a reason you don t have a saltwater pool set up?

@Nathan W. what makes spending $400k for a 2 bed,1,000 to 1200 sq ft cabin “ sound” like a good value?