Rental Property Investor · Tacoma, WA · Member since 2016 · 26 posts · 26 votes
Good morning everyone! I've been searching the forums hi and low looking for some fidelity on a situation I've come into. We just wrapped full rehab on a rental property which is focused on the travel nursing market here in Tacoma. It is awesome! Rented immediately and cash flows well. It's slightly more work than our traditional long term SFR, but significantly less than AirBnb. Renters sign on for 90-180 days at a shot. Here's the problem. I went to take out a HELOC on another rental property and the lender (credit union) does not recognize the income we generate from this new asset until we claim it on next year's tax return. I'm assuming this is because I don't have standard 12-month lease on this property. This skews my DTI ratio and retards my ability to leverage for the next deal. Has anyone else run into this? It sort of messes with my chi if I want to keep investing in short term rental properties and targeting travel nurses which are awesome.
Good morning everyone! I've been searching the forums hi and low looking for some fidelity on a situation I've come into. We just wrapped full rehab on a rental property which is focused on the travel nursing market here in Tacoma. It is awesome! Rented immediately and cash flows well. It's slightly more work than our traditional long term SFR, but significantly less than AirBnb. Renters sign on for 90-180 days at a shot. Here's the problem. I went to take out a HELOC on another rental property and the lender (credit union) does not recognize the income we generate from this new asset until we claim it on next year's tax return. I'm assuming this is because I don't have standard 12-month lease on this property. This skews my DTI ratio and retards my ability to leverage for the next deal. Has anyone else run into this? It sort of messes with my chi if I want to keep investing in short term rental properties and targeting travel nurses which are awesome.
V/r,
Rich (retiring Soldier and newbie REI)
PS. Go Hawks!
Hey Rich
Welcome to BP and thanks for your service!! Because of what you do, we can do what we do.
Contact several lenders and ask if they recognize short term rental income. You'll find that some do and some don't. Stick with conventional first. If you don't find one that does in your area, you may have to go portfolio. It's a little more expensive in rate and points, but they close
Rental Property Investor · Tacoma, WA · Member since 2016 · 26 posts · 26 votes
7y
Stephanie,
Thanks for the input. I'll keep shopping around and get to know more of my local lenders. As a newbie with only four deals under our belt and some fabulous to mistakes to laugh over, I'm kicking myself for not getting this setup before going into the last project. Hindsight is always 20/20 :)
Everett, WA · Member since 2019 · 20 posts · 5 votes
7y
With short term rental income Fannie Mae will require a two year history documented on your tax returns. Their are some non-conforming lenders who may work with you on this but you terms and pricing are going to be higher.
Everett, WA · Member since 2019 · 20 posts · 5 votes
7y
You are welcome and feel free anytime to ask me a question. Have been doing this for 30 years working with investor's, not to many situations come up I have not experienced. Good luck with your financing.
Good morning everyone! I've been searching the forums hi and low looking for some fidelity on a situation I've come into. We just wrapped full rehab on a rental property which is focused on the travel nursing market here in Tacoma. It is awesome! Rented immediately and cash flows well. It's slightly more work than our traditional long term SFR, but significantly less than AirBnb. Renters sign on for 90-180 days at a shot. Here's the problem. I went to take out a HELOC on another rental property and the lender (credit union) does not recognize the income we generate from this new asset until we claim it on next year's tax return. I'm assuming this is because I don't have standard 12-month lease on this property. This skews my DTI ratio and retards my ability to leverage for the next deal. Has anyone else run into this? It sort of messes with my chi if I want to keep investing in short term rental properties and targeting travel nurses which are awesome.
V/r,
Rich (retiring Soldier and newbie REI)
PS. Go Hawks!
Find a local credit union or small bank that does in house loans. This is what I did 30 years ago. Build a relationship with them and they will even count your dog sitting income. Rates might be a little higher or might not be. After 30 years with my bank I'm getting great rates and terms.
Rental Property Investor · Tacoma, WA · Member since 2016 · 26 posts · 26 votes
7y
Clifford and Daria, awesome stuff! I definitely need to "thicken" my local network of lenders and get some more tools in the tool bag. The host financial site looks interesting. Just noticed they have a line of credit options available. Thanks!