Tag: short term rental investment

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What I Think Of My HOA – The Unedited Version

My views on HOA’s before and after this saga is definitely interesting to look at right now. To give an update on where we are at in the story. I have been told that the Executive Order in place prevents me from renting my home as a traditional short term rental investment property. There are still other avenues that I have yet to explore which I will detail out in tomorrow’s post. In the meantime, I wanted to provide some insight into how I view HOA’s. Real Estate investing is fun and there is so much that goes into it. Just when you think you have the hang of things, COVID-19 hits and the economy gets flipped on its head.

Before jumping into my unedited thoughts on the HOA, get caught up on all the craziness in the saga! Links below to all the articles so far!

What I think of my hoa

Here Are My Unfiltered Thoughts On HOA’s Prior To The Saga

Okay. You waited for it. Now you are going to get it. Here are my unfiltered thoughts on my HOA’s prior to the saga.

I paid my dues on time in full every month. I never had any complaints from the HOA and life felt normal. No issues. No concerns. All things were good and I was happy to continue paying my dues.

What Are My Thoughts Now? I Thought You Would Never Ask 😉

Here are my thoughts now on HOA’s. Do I think HOA’s can be good? Absolutely, I think they can be good.

Do I think HOA’s can have the ability for the board members to have power trips and think they are above the law and can do anything they so please to do? Absolutely, I feel like many members of HOA boards are just yearning for a sense of power. They maybe have never had a position of authority prior and love the power being on a board gives to them.

Do I think HOA boards are typically made up of the right people? Generally, I would say no. I don’t believe HOA’s are made up of the right mix of people. I feel like there are cliques that are created in communities and usually one clique will try to gain all the control on the board. They typically are the group who is the most vocal and has nothing better to do with their time than complain about things to people until they get their way. Oops, yeah, I guess I said it. That is how I view HOA’s.

How I View This Saga

Here is how I view the current saga I am in. This HOA is on a power trip. Here is where I believe the true problem lies though.

This community was originally designed only for short term rental properties. So 100% of the owners in this community were investors. In 2014, a new Bylaw was updated allowing people to live in the community long term as a owner occupied property. Since 2014, 20% of the homes in the community are now owner occupied. That means that 80% of the homes in the community are investors.

I am a firm believer the 20% of owner occupiers have been and are banding together. They have all lived there for many years and they have all made a pact to always do what is best for them and not the investors. I caught word the other day that they once tried to get the HOA to put in a $150,000 dog amusement park in the resort, until logical investors flipped and told them no.

I have an opinion that these 20% of individuals got together and immediately went to the front desk to speak with the GM of the resort as the COVID-19 break started to worsen. I have an opinion that they begged and pleaded to the GM to no longer let any new guests into the community no matter what. They wanted to keep their own “fortified” neighborhood where they were the only ones allowed in and out of the property. They continued to go to the GM everyday until they finally sent an email out telling all homeowners that no new guests would be allowed to check in effective immediately.

Detailing Out The Three HOA’s I Currently Have

I want to clearly articulate my thoughts on HOA’s before and after everything that has been going on. So time to clearly articulate the before.

I currently own 4 different homes. Three of the homes have HOA’s and one of them (the new triplex I just purchase) does not. The first home I ever purchased had an HOA.

The community is a nice community. It has a community pool, playground, dog park, softball field and small soccer field. The HOA charges $150 per month, but here is the amazing thing. The $150 a month pays for all lawn and pest control on my home so that is something I have never had to worry about! The HOA also provides access to all the amenities and maintains each. For $150 a month, I think this is well worth it. I have never had any issues with the HOA and I pay my dues on time every time each month.

Now comes my other two communities I own in, the first two sole Airbnb properties I purchased. The first property has an HOA running at $351 per month. This HOA is a little bit different though. It includes:

  • High speed internet in my home
  • DirectTV in my home with HBO and over 1000 channels
  • Clubhouse with a sauna, movie theater, workout facility and staffed front desk
  • A resort pool with a tiki bar!
  • 24/7 gated security
  • Exterior maintenance, exterior paint, and replacement of roof once needed

For $351 per month, I feel like it is a steal. A bunch of things that are add ons for the property, and internet and TV provided. Not too bad.

The last of my properties costs $251 a month which includes 24/7 security, clubhouse workout facility, resort pool, resort hot tub and resort kids water play area. A little pricey all things considered for what it offers, but I wanted to try a different community in the area.

Read the Facebook posts again. It is clear to see who the owner occupiers who live there are versus who the investors are.

I leave you with this cliffhanger.

Less than 5 hours after I sent my political response email back to the HOA (can be read again at this link), guess what happened?!?

Magically, they sent out an email to all the homeowners. MAGICALLY! Hmm…looks like my coaching up that I am doing for them is in the smallest way working.

In tomorrow’s post, the fun continues…you will not believe what they had the nerve to end the email with!!!!!!!

And you thought things had just settled down! Oh no, no no no. You are thinking wrong now!

Thanks again for reading the blog and staying up to date! Want to support me and get some extra content each month? Subscribe to the blog!

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Thanks again for all the support and continuing to come back each day for new updates in this saga!

To checkout the next part to this saga, click the link below!

Part X: HOA Sent An Email To All Homeowners To Pay Up!

 

 

 

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Time For Legal Advice From A Local Florida Attorney – Will See What Guidance They Provide

It is finally time for legal advice from a local Florida attorney. Late last week, I had the opportunity to have a friend’s wife quickly review the information and provide her interpretation. It is now time to get a local attorney who is very familiar with the Florida law to provide their interpretation and guidance.

Before hearing what the attorney had to say, if you haven’t had a chance to get caught up yet on everything going on, check the links below for the first 6 parts to the series!

Getting On The Phone With The Attorney

I had never spoken to an attorney before to talk through potential guidance on an Executive Order. Prior to speaking with the attorney, I had put together some information for my agent to pass along. I essentially put together a short summary of

  • What had happened to this point?
  • All communication that had been sent from the HOA/Board to homeowners
  • And a copy of Executive Order 87 that walks through the restrictions placed on short term rental owners

The attorney asked me for the case I was trying to argue for which is where I referenced Section A (i) that I had referenced previously in the Executive Order. For reference, below is a snip of the Executive Order and section I was referencing.

Executive Order

How I Interpreted Section A(i)

I recently polled my followers on Instagram to see what their thoughts were for how they would interpret the Executive Order. This was more for fun than anything else. I am by no means a lawyer and I know that probably 99.9% of people who have been reading this are not lawyers, but I thought I would go ahead and poll anyways.

Poll of instagram viewers

Here were the results from the poll. 90% of people agreed that 30+ day rentals are allowed based off the Executive Order and 10% disagreed. This at least had me not feeling crazy about how I interpreted the Executive Order.

Here is how I interpreted the Executive Order. I interpreted Section A (i) as you are allowed to rent out your place for over 30+ days, but short term rentals are banned for the time being. This would mean any new bookings I received for 30+ days would be allowed to stay in the resort. Again, this was my interpretation of the Executive Order.

Time For The Lawyers Interpretation

Before explaining the Lawyers Interpretation of the law, I would like to say one thing. The lawyer read and re-read the Executive Order. Prior to going into her interpretation of the law she told me this. She said this was one of the worst written Executive Orders that she had ever seen the governor write and sign into law. More than likely, that was due to how quick they were trying to act to get something signed and put into law.

Here is why she thought it was horrible. First, she said the Executive Order looks to contradict itself in a few different areas. There is a lot of technical verbiage in the Executive Order, but there is a lot you must understand about terms like “transient lodging establishment” or “non-transient lodging establishment.” She had to look up the definition of each of them to which she determined that my place would be considered a transient public lodging establishment.

The biggest point of confusion she said is based off how the entire section reads. She stated there is an AND clause to begin point A which then constitutes the OR clauses to act as an AND clause in a sense.

I was so confused, I had to ask her to break it down for me in laymen terms. She talked me through the fact that the AND clause prior to the OR clauses makes it such that all the OR clauses have to be true in order for the exception to be okay based off the Executive Order.

Goodness gracious, even trying to explain it as I type this out right now I am confusing myself as to how to interpret it properly. I believe the correct interpretation is no new guests are allowed to check in because my place is a transient public lodging establishment, it has been rented out prior this year for less than 30 days, it is advertised to the public on Airbnb, and it is regulated by the Department of Business and Professional Regulation as a vacation rental pursuant to section 509.241. I believe since all of those had been true then I could not have anyone check in for the duration of the executive order.

Well S**T!! That Wasn’t The Answer I Expected

She again stated it was one of the worst Executive Orders she had seen written in a long time. She said it is extremely confusing and stated there is a lot more research they would have to do to confirm there are no holes in her initial interpretation, but it would cost $385 per hour to research further. The conversation ended up lasting 20 minutes and at the end of the conversation I asked for her advice to understand whether it was worth them doing the research.

The lawyer told me she would be more than happy to do further research to confirm her initial thoughts, but said she felt 80% confident my case wouldn’t hold up in court. Although hard to say, she said she agreed with the interpretation the HOA attorney had on the law.

To confuse things even more about how the Executive Order reads, I asked her to look at Section B of the Executive Order. I hadn’t read down to Section B of the Executive Order yet. Mainly because I thought Section A gave me a valid case for having someone rent.

Here is what Section B states in the Executive Order:

Section B

The community this rental is in considers themselves a resort. So if that is the case, then all resorts are excluded from the executive order. And if resorts are excluded from the Executive Order, would this apply to our resort at all?

In my communication to the HOA and Board, I have only stated reference to Section A(i).

I asked for the lawyer to give me her interpretation of Section B and that is when she said she would be more than happy to do further research, but it would need to be on the clock to do a full interpretation of the case. At that point, I asked her what the best path forward was.

She quickly scrolled down to the bottom of the Executive Order to see when it expired. The Executive Order is set to expire later this week. With that in mind, she told me to wait it out to see if the Executive Order is extended on the expiration date. If the Executive Order is extended on that date, then email her and we could talk through more details on what a legal pivot would be for investors in the community based off the Bylaws of the HOA, Executive Order, and any other relevant information.

Overall Outcome Of Speaking With The Lawyer

Okay, so that didn’t go as I thought it would go. I thought I could read, but I clearly can’t interpret law based off my interpretation of this Executive Order. There has to be a way to pivot this in ways that wouldn’t consider this rental as a short term rental, I just need to figure out how to pivot properly based off the law. There is much more research I need to do and some clarity I need to get with reviewing the Bylaws of the HOA association on long term rentals.

This isn’t where things stop though. The story continues getting even juicier after the response back I sent to the HOA and Board this morning based off their response email yesterday’s article.

Just wait till you see this craziness. Got me fired up! More to come in the next couple of days.

Stay posted by subscribing to the blog and following me on Instagram!

Don’t worry, this is not where this story ends. I may have lost this battle, but we have not lost the war!

I have much more fun that has happened as of today. More posts coming over the next four days!

To check out the next part of this series, click the link below!

Part VIII: Ready To Pull My Hair Out On This HOA Issue! – But Time For A Political Response

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Lawyer Time – I Spoke With A Lawyer Over The Weekend, And Here Is What They Said

What a wild weekend capped off my a crazy afternoon on Sunday talking to many different people. I spoke with a lawyer over the weekend, and here is what they said.

Just a quick recap for those just tuning in to everything that has happened to this point. Below are the first three articles from this wild situation with my HOA. Check them out so this article makes a little more sense, links below.

Time For Part 4!

Here we go. So here is where we currently stand from yesterday. After I finished the conversations with Jose, I decided to go back to my place to do a couple of things. I proceeded to call the guests who were just turned away and apologize again for everything going on.

My guests let me know they were driving down to Miami because they weren’t allowed to check in. I could tell they were very frustrated and wanted to stay in Orlando, but they were already on the road. Luckily, this is a guy who I randomly got partnered with last week while I was golfing and he was understanding.

Quick sidebar from a text I received from the guest later last night. He sent me a snip of the law, the exact one that I have been showing the HOA every single day for the past week. Not going to lie, I kind of laughed when he sent it to me. I told him I know man, they aren’t abiding by my interpretation of the law.

Here were his direct words in the text after the picture:

“Either way im calling the GM who is Conrad and im giving him a piece of my mind… But no matter what I should be good after April 10th. Im definitely going to fax over a copy of the order to him and let him know I had to travel to Miami cause he doesn’t understand how to read an executive order…Have a good day and we’ll talk tomorrow.”

I love my boy Alfred. Not only was he understanding, but he has that NY fiery attitude that I miss sometimes.

Next Steps For Me – Find Someone To Speak With

Now, for my next steps. Yesterday, I did two things.

First, I reached out to my real estate agent and asked him if he had a good attorney that I could speak to. My real estate agent asked me to send him a synopsis of what is going on and he would get back to me. I sent him an email with all the details and he let me know that he will set me up with an attorney he has used and they should reach out this morning. So I am awaiting an introduction email and will talk to a local attorney who will sit down to review the case.

Second, I reached out to a good friend of mine I work with. His wife is a lawyer so I had one thing I really wanted her to look at. I reached out to my friend and asked if his wife could review the executive order by the governor and interpret Section A (i). For reference, this is a snip of that section and a link to the entire PDF.

Executive Order Why I Wanted An Opinion On The Executive Order

There was one reason why I wanted the opinion on the verbiage of the executive order. One, I am not a lawyer and don’t understand half of what was said in this document. Two, I want to make sure I can read properly and I am interpreting Section A (i) as stating rentals over 30 days are allowed. I also wanted to make sure it was an unbiased opinion. I have a dog in this fight, so I am biased to read the law how I want to interpret it.

Here Is Exactly What The Lawyer Said

An hour after sending everything over to my friend, his wife called me. She asked me to outline the situation of what was going on. I outlined everything for her and then she asked a few clarifying questions (bringing out that lawyer in her).

After 30 minutes of discussion, these are the exact words she said to me: “YRB, I want you to know one thing before I say what I am going to say. I hate giving the advice to sue someone. Mostly because it is very costly and most of the time not worth it. But, in this scenario, the law is so black and white that you should sue seek damages and sue as this has already impacted your business.”

There was one thing she asked me to do. Documentation is key in lawsuits. She told me to draft up an email to send to the HOA and board that details out everything going on along with the executive order and details of what happened at the gate. In my next post, I will show you the exact email I sent to the HOA and board last night. I put together the first draft, sent it to her, and she lawyered the shit out of it hahaha. If you don’t know what that means, it means she essentially made it 1000000000 times better by adding lawyer verbiage. So, if they thought I was joking previously about the lawsuit, now they should know I am talking to lawyers.

Here is the thing. I think deep down I wanted her to say that, but at the the same time I didn’t want to actually hear her say it. If that makes sense.

Time To Determine Path Forward

I now had one attorney’s interpretation of the law. It is now time to follow-up this morning with my real estate agent to get in touch with the attorney who live in Florida. He is going to do an introduction email and then I will hopefully get on the phone with them this afternoon.

By no means did I think I would want to be in a lawsuit at this point in my investing career, but there are a few reasons why I feel this is the right thing to do:

  1. The law is clear. And I received an interpretation from an attorney that I was reading it correctly.
  2. Financially, I have been impacted by this situation. I have had to cancel on three different guests and even had one guest arrive at the gate and be turned away.
  3. The HOA isn’t above the law. No matter how much they try to be. I have had multiple homeowners reach out letting me know this HOA has been extremely difficult and not representative of investors.  It sounds like it is time for an investor to be on the board…I might be the one nominated based off the passion I have shown in the facebook group.

Final Words

Time for some more fun. Here is the thing I am taking away from this entire situation. This is a learning opportunity for me. I am extremely happy to be going through what I am going through and think that I have learned a lot already to this point.

If you view everything as a learning opportunity, nothing sucks.

Want to see what I emailed the HOA and Board? Checkout the link below for the next post!