Why They Shutdown Her $59k+/Month Income Property

[@abc-ed1nr]

Government (and nosey neighbors) will always be your biggest nightmare

[@swatisquantum]

This is it.

[@cloudedjourney]

Good ol politicians. Whoa whoa whoa, you're running a successful business? We want our cut for doing nothing in return.

[@KaiAndrew]

Haha. I know, right?

[@TheAdVentureists]

As much as people disagree (and as much as it seems that they are hassling you at times), most regulations are there to protect the municipality (and therefore the taxpayers) as well as the environment (sewer regulations for example) and your customers (building regulations). Someone once told me that if you think about it, regulations are risk mitigation for the municipality and virtually everything found in code is likely there because someone was either hurt, killed, or significantly impacted, just a thought! 😃

[@TheAdVentureists]

Oh no, glad she was able to get back up and running fairly quickly, looks like an awesome property! This has been apparently happening in our area and unfortunately for some people, there isn't a permitting path because they chose land that had the wrong zoning...in the long run, it's definitely much cheaper to plan before you build!

[@KaiAndrew]

Yep, me too! I know. Figuring out zoning is key!

[@TheAdVentureists]

@@KaiAndrew It definitely is! She's very lucky that the use actually was allowed with a special use permit, otherwise she would have lost everything!

[@roseoverdose6451]

yea, pretty basic zoning stuff. they didn't shut her down because "they hadn't seen anything like it before". haha. everyone should be checking zoning as part of their due diligence to avoid issues like this and it could have ended much worse for her... she got lucky.

[@AshleyOliviaDaCosta]

I’m glad she got it back up and running!

[@KaiAndrew]

Me too!

[@farmerjeffmays9858]

Always Valuable Content 💰

[@Lulushef]

We just bought 33 acres. In our area the county dont have regulations for us so they directed us to the Health Dpt. Health dpt says as long as we comply w Airbnb and the like, we dont needt any permits from them either. They do advised to build according to their regs in case one day we don’t want to use Airbnb, since then we will have to obtain permits. So seems easy so far.

[@KaiAndrew]

That's great! You have a good county to do business in. I concur their advice about building to code.

[@investorsguidetothegalaxy]

Main thing, never give up on your dreams! ;)

[@AsAboveSoBelow111]

Awesome content Kai!!! Love the magic!!! Glad Cass got that sorted out!!

[@KaiAndrew]

Hi Minden! Glad you liked the effects. :)

[@zackdreamcast]

Perfect example of haters got to hate

[@KaiAndrew]

Haha. True dat.

[@samrei6223]

I like this concept, I feel like it’s something not on the radar of all the consumer investors. My only question is how much capital does someone need for this type of business?

[@sirsnugglebeargaming4598]

Good job editor, that was pretty cool

[@KaiAndrew]

Yeah, editor is on point.

[@socalstr]

Hopefully the CUP puts Cass in the clear related to regulatory concerns indefinitely. I had assumed it was already in place when you covered her months ago. Shocked it wasn’t, actually. However, the whole gig she has going still doesn’t quite feel 100% “there” to me. The concept of blurring the line between commercial business and “hacking” while using STR platforms to make (the majority of) it happen still has its reckoning moment in front of it. Long term regulatory risk mitigation is easier found in SFR properties in markets where robust STR regulation already exists. “Hacking” is super exciting for those that are cash poor and have a great imagination. But it can be a colossal risk.

[@KaiAndrew]

Hey Richard, not quite sure what you mean by "100% there." I doubt there are many SFR that can generate $50k-$100k/month. Maybe the ultra luxury, but income can be inconsistent and you have a very small customer base. I'll put it this way. I've gotten rid of nearly 70% of my SFR/STR inside the city due to HOA, regulations and new laws that all but killed the business. I've seen areas 10x in competition and pricing get halved (or more) when these regulations come into place. This is common in practically any major city. If you want security, lower margins and plenty of competition you can absolutely choose an established market. I'd argue your risks are higher and the rewards are lower in the long run.

[@socalstr]

@@KaiAndrew Not “100% there” meaning there-is-still-some-risk-of-having-my-business-shut-down, or worse. For example, I’d like it if Cass had some kind of animal or petting-zoo license (if there is such a thing). She no doubt has at least $3M in liability insurance if one of those llamas bites a finger off a toddler, right? But what if Cass were held criminally negligent somehow. . . Money is one thing, but prison? What about lifeguards on that “pond?” Is it a natural body of water or is she responsible for it? I’d also like to see the whole “wedding venue” part of the “hack” be Health Department compliant and licensed. This means 3-compartment sinks, floor sinks for drainage, hand washing stations, proper exiting, non-slip, and the Health Department going through every few months (you need this even if you’re just providing a place for catered food in many jurisdictions). I’d also like to see all the restrooms she provides to be ADA compliant. Some illegitimate “disabled” folks make it their “business” to bring cumbersome lawsuits to successful/hardworking small businesses like Cass’s. I just see a lot of risk here. So, for me its not "100% there" yet. But I’m maybe too conservative! I realize I’m shading a little negative, but maybe it’s because I’m finally middle-aged and I have a little daughter now. It’s also possible that Cass has thought of this already! But, when we found out she didn’t even have a CUP as a campground (the holy grail, if you’re going to just do hyper-profitable makeshift overnight accommodations) I got scared for her again😊 You make some fantastic points about urban STRs and their declining profitability based on the items you indicate. I’ve had to shift my portfolio too (had a 4-plex “mini hotel” in urban San Diego, got bumped by regulation, sold that and moved all the resources into several SFR STRs in both mountain and desert communities in San Bernardino, CA and Riverside, CA). I guess the point I was urging your viewers (and I’m one of them!) to consider is that when you “hack” too far, the risks get greater and greater. That’s why we tongue-and-cheek call it “hacking,” right? It’s kinda pushing the envelope and there’s uncertainty there.

[@shiftingbabe3947]

@@socalstr Thank you for this insight. Seems like you know a ton about this kind of business.

[@akagobble]

@@socalstr I had the same thoughts when I saw the last video praising her business. I had a gut feeling someone was going to call her out. A "special use" permit is nothing out of the ordinary and basic 101 permitting in FL. "Not having the time" is not a good enough excuse. It's not even in the fine print. It's literally on the first page of the use tables.

[@PrimitiveTim]

Just started but this property is super interesting to me. Would love to do something similar.

[@KaiAndrew]

Yeah, it's super cool!

[@charlesquesnel2302]

Hello Kai I'm starting a large retreat up in Muskoka I was wondering if you know any Canadians up here that are helping people get off the ground. I love your videos and I know there's lots of mistakes I can make Regarding permits city township etc. I'm in a wheelchair and this has been a dream of mine for a long time. Was wondering if you have any contacts up here for planning lawyers etc. Keep up the great videos

[@dandoe7260]

Hi Kai, We just bought a 69 acre farm, it's high value farm land, we inquired in opening a wedding venue, set up a tiny home sites, so we asked an attorney if all this would be possible, he said because it's high value land, we would not be allowed to bring tiny homes on the property even to allow people that may end up leasing farm land from us to live there in tiny homes is not allowed. He said that wedding venue is a conditional use and that we have almost no chance on getting approval. This farm is in Boring Oregon with mt hood views from almost entire farm. Wondering if you have some advice? Thank you.

[@rachelunderhill2711]

Hey any updates on what happened?

[@swatisquantum]

What’s the zoning? Why not just do it and start collecting money.

[@LittleMountainLife]

Never giving up! Amazing editing on this one too! Super appreciate all of the info you provide in these videos and in the webinars! -Don in VA :)

[@KaiAndrew]

Hey Don! Glad you're enjoying the content. Had a blast answering your questions tonight. Cheers. :)

[@KaiAndrew]

Join me for a free live webinar tonight (Wednesday, March 30 at 5pm PT). No sign up necessary: us02web.zoom.us/j/87819262494

[@tedd7028]

Until now I thought it was impossible to exceed a 90 second intro

[@KaiAndrew]

I'm here to prove things possible. You're welcome. :)

[@pastrami00]

God I hate the government.

[@Chris-em9uw]

She can blame you

[@KaiAndrew]

Haha, I take full blame. Her business boomed too though. :)

[@Chris-em9uw]

@@KaiAndrew oh ya that makes everything ok 🤡 I bet you going to say that about Rob in valle az too

[@DanielaKasalo]

What about power,water,utilities on this rural propeties? What you should do..making glamping on grid? Because asking for utilities on lands like this cost so much.Can enybody explain that? Sorry about my english..

[@janellepatillo8731]

This is exactly what I've been nervous about when it comes to my glamping business. There's none like it in Maryland so I know I'd get snitched on :( I'll take home girl's advice and do it the right way haha. It's inspiring that her business didn't have to shut down forever though.

[@KaiAndrew]

Yep, always comes back to zoning and permits. Fortunately, Cas has the right zoning. Just didn't the exact right permits at the time.

[@TheAdVentureists]

If you haven't, you may want to just look into your planning and zoning codes, there may be a simple path!

[@janellepatillo8731]

@@TheAdVentureists Thanks! I wish it was a simple path lol I've been studying the zoning codes like crazy and while it seems like it its not technically illegal, Its a bit of a task. In my county, I can get a special exception for a recreational camp ground but the terms of what kind of structures are allowed on said campground are a little blurry. But luckily they're in the process of revamping the zoning ordinance so its more user friendly and easier to navigate. Hoping that'll help get me started quicker.

[@TheAdVentureists]

@@janellepatillo8731 Totally get it, for us we have plenty of restrictions on our project (structure types, length of season, etc.) and the process has been time consuming to say the least as we've been working through it for over a year! Best of luck, if there's a permitting path, that's a good thing!

[@janellepatillo8731]

@@TheAdVentureists Thanks! Good luck to you too :)

[@giovannicorraliza4393]

the wizard part. hmm i dont think should

[@calicreative5738]

So your telling me in California I cannot have a glamp site on a mountain of 10acres?

[@waystosavemoney372]

Krabs in a bucket. That’s how weak we are

[@buensomeritano1755]

um ..... that's Interference in commerce under color of law, via conversion of public offices into instruments of crime...... see 18 USC 4, 241, 241, 641, and 1519. Citing you is one thing. Interfering in commerce via conversion of office is a crime. Doing so, due to incompetence, is grounds for removal from office. "The officer, who deems himself to have jurisdiction, where he has none, does so at his own peril." Shutting you down is a disproportionate response and, under the 4th amendment, you have the right to conduct business on your own property. The government may not license a protected right, nor charge a fee for it's exercise. You need to sue the errant officer in his private capacity and lay a criminal complaint before the judge.

[@prinny04]

What about being able to incorporate the current cash flow of the property into your calculated income? I heard that's possible, thereby increasing your income and qualifying you for the loan/mortgage?

[@KaiAndrew]

Yeah, any income that is on your tax returns will help with future loans.

[@jen3104]

Love that gal in Florida!!

[@KaiAndrew]

She is really cool!

[@myYouTube1travel]

This is the money laundering method.

[@beetlej2398]

What up kai

[@KaiAndrew]

Waddup.

[@logicandwisdom]

Hi Kai, how much premium does a permitted income generating business add to a property? Is it a function of income and is it added to the value of the real estate?

[@KaiAndrew]

Hi Janelle, the answer is a bit more complex than just a flat rate. But you'd have to run a valuation calculation based on the profitability of the business. But I can tell you from experience that I've paid/paying a large premium for permitted cash flows over just the value of the property.

[@logicandwisdom]

@@KaiAndrew Thanks for answering Kai. My husband and I run one of the few permitted hoke based glamping sites in San Bernardino, near Joshua Tree. The county created a (IMO) pilot permit process for alternative Shelters and only awarded 2 permits based on the requirements. It's currently under review but I had someone ask the value of the property (we also live here) plus the business and was curious as to valuation. This was for insurance purposes but I was also curious about market value.

[@TheAdVentureists]

@@logicandwisdom Love that area, actually going in a few weeks! Out of curiosity, are you asking the valuation difference between a permitted vs unpermitted business or just simply how do you value this type of business?

[@logicandwisdom]

@@TheAdVentureists Hi Ad, good question. We are working on a separate insurance policy for the business and possibly an umbrella policy and the discussion went to the valuation of the property/business for insurance but also what's the market value of property with a permitted income producing business on-site. I wasn't sure put a single number together. Comps on house + annual income x multiplier + actually being officially authorized to operate?? That's what I'm trying to figure out.

[@socalstr]

@@logicandwisdom Cliché alert! Valuation is the value that someone will pay you for what you sell at the time you sell it. And it'll be worth some degree more with an operating business and permits than just an SFR and/or an empty lot, to be sure. Like I said in a prior comment, the CUP that it appears you have currently is the holy grail - especially in JT where a snazzy $10K yurt with a mediocre patio, average furnishings, and a sling-hammock can get you $150/night with little effort. Investors will know that and pay more for it. If the question is around the plan that you're going to keep it and are trying to value it for property insurance? The conventional "valuation" (like an appraisal that a bank would use - or even (gulp) what Redfin/Zillow says) will suffice. Just be sure that you're getting massive LIABILITY insurance for it. You need to be afraid of being sued, not having your little teepees burn down.

[@optionprinting826]

shoulve let her to continue, instead of letting her give real insight !

[@mikeh4053]

If you are making that much, younpay the fine and move on.

[@giovannicorraliza4393]

Please see this verse Revelation 14:12 (King James Bible) Here is the patience of the saints: here are they that keep the commandments of God, and the faith of Jesus.

[@WhatIsThis-zq4hk]

Can we really say we live in a free country when US land is so heavily regulated.

[@brandonlifefamily8331]

Another example of government overreach not evening knowing their own laws.

[@danielashman1753]

LMAO so funny people think it's normal or acceptable that the second they try something new govt can shut them down. Then it's time to beg for a permission.

[@cardboardkitty7091]

You can’t really blame the people who asked the county how they could “do the same”. You made a video about her operation and how she had permits for various things. Of course everyone watching would assume everything was legit and above board and want to do the same. I’m glad she’s back in business. Really glad. But the shut down is not the fault of people who wanted to emulate her success. It should have been researched before a video was made, as to avoid that scenario. It was an excellent video, nevertheless.

[@MrJason0505]

Kai please stop doing corny effects. You don’t need it man. It’s a distraction for the amazing info you give out.

[@thisisreallife9026]

lmao

[@KaiAndrew]

Hey Jason! Thanks for the feedback. I appreciate it.