Short-Term & Vacation Rental Discussions

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Allen L.
  • Rental Property Investor
  • Chicago and mainly invests in KS remotely
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STR to primary residence for asset based lending

Allen L.
  • Rental Property Investor
  • Chicago and mainly invests in KS remotely
Posted Jun 27 2022, 05:06

Hi,

I am relocating to Austin TX in 2 years and I would like to purchase a SFH in an A area now, to participate in the Austin RE market, using STR to pay for the mortgage. However, I have a few questions, and I wouldn't mind jumping on a call with a few local agents or operators if possible.

1. I maxed out my Fannie Mae loans so this would have to be asset based lending. Do they underwrite for STR income?

2. Would I have to refi into a Fannie Mae primary residence loan product once I decide to move into it?

3. What are some good areas for STR? I am looking in the North Central region since that's the closest to my work.

4. Do single family communities with HOAs typically allow for STR?

Thank you

Austin, Texas

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Robin Simon#1 Classifieds Contributor
  • Lender
  • Austin, TX
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Robin Simon#1 Classifieds Contributor
  • Lender
  • Austin, TX
Replied Jun 27 2022, 05:40

Hi Allen - 

Would love to jump on a call with you - I'm a private (asset based lender) in Austin that specializes in short term rentals, so sounds like a perfect match to help!

1 - yes, can underwrite to STR income (airdna projections), its extremely hard to get quality properties to cash flow in the Austin market right now unless you can underwrite to STR income. Long Term Rents have exploded here but values have as well

2 - No, underwriting for these loans essentially stops once the loan is closed

3 - There are a lot of great areas in Austin, depends more on the audience you are aiming for (Lake house, medium term stays, party tourists, etc.)  I heavily recommend East Austin as the upcoming/current "HotSpot" - some deals that actually look great are coming onto the market recently

4 - likely not, the STR regs are definitely a complicated thing to get your head around here, but generally are workable

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Robert Tinker
  • Rental Property Investor
  • Round Rock, TX
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Robert Tinker
  • Rental Property Investor
  • Round Rock, TX
Replied Jun 28 2022, 22:26

Research the STR Laws in Austin. Some places outside of the city are more lenient. Get to know the area well first.