Ocean City STR investor
Realtor · Ocean City, MD · Member since 2019 · 54 posts · 26 votes
Ocean City STR investor
Most Popular Reply
Lender · New York, NY · Member since 2022 · 1k+ posts · 1k+ votes
3y@Heather Carrow when you say hard money loan, are you more referring to just a private loan in general, or specifically a short-term/bridge loan (i.e 6-18 months) that is used either for the purchase + rehab or the home, or just the purchase of the home (but on a tight time frame) with an interest rate of around 9%-11% and 1-3% in origination fee? Trying to understand if you're referring to a DSCR loan or a true "hard money loan."
43 Replies
- 3ySarah KensingerPro MemberReal Estate Consultant · OH · Member since 2023 · 2k+ posts · 1k+ votes
STR co-hosting has helped many and it's what we're doing!
- Rental Property Investor · MD · Member since 2020 · 27 posts · 21 votes3y
I am also an investor in Ocean City MD. I agree that the market is tough right now for lending. Depending on when you bought your existing, some values have gone up quite a bit and you may be able to borrow against equity as an option.
- Realtor · Ocean City, MD · Member since 2019 · 54 posts · 26 votes3y
Hi Sarah! Are you acting as co-host for owners and charging commission? Is this what you are referring to?
@Sarah Kensingerundefined
- Realtor · Ocean City, MD · Member since 2019 · 54 posts · 26 votes3y
Hey Jason! I thought about doing this too. It is an option for sure, but I'm not fully committed to it yet.
- 3ySarah KensingerPro MemberReal Estate Consultant · OH · Member since 2023 · 2k+ posts · 1k+ votes
Quote from @Heather Carrow:
Hi Sarah! Are you acting as co-host for owners and charging commission? Is this what you are referring to?
@Sarah Kensingerundefined
yes
- Rental Property Investor · Phoenix, AZ and Rehoboth Beach DE · Member since 2019 · 1k+ posts · 1k+ votes3y
I own one STR in Rehoboth, bought it last year. I've vacationed in OC all my life, and looked there too. But I'm not in the market for a second one yet.
- 3yMichael BaumPro MemberOlympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
Do you any equity built up on your current holdings @Heather Carrow?
You might try and look locally for portfolio loan or DSCR loan. You have experience with good performance results (I am assuming) so that could help drive approval on a DSCR loan.
Also, you could just keep saving and waiting for the interest rates to head back down. That could be the best course of action right now.
- 3yRobin SimonBusiness MemberLender · Austin, TX · Member since 2022 · 5k+ posts · 4k+ votes
Quote from @Heather Carrow:
Hi BP community!
As my investing career has been advancing I wanted to start a thread for people interested in short term (or long term) rentals in Ocean City, Maryland and the Delaware beaches.
I have two STR's in Ocean City that are doing very well. I also have one in Bethany Beach and Lake Harmony, PA. So far, Ocean City has been my favorite market. I am also a realtor in MD & DE and have been helping other people get STR's in that area.
My goal is to acquire another property this year, but I am struggling to build capital fast enough to amount to a down payment. I have used hard money for my last two purchases and rates are so high right now that it kills most deals. What are others doing to raise capital?
Do you still have the hard money loans on your two existing properties? If so, a best course of action would be refinancing those into lower-rate perm debt which should lower monthly payments and maybe provide some cash-out - that would be the cleanest/most conservative way to build up some more capital
Harpoon Capital514 Reviews - Smokies / Greenville, SC · Member since 2021 · 129 posts · 146 votes3y
Hey Heather! My mom always told us stories about her vacationing in Ocean City with her family growing up... so cool!
Sounds like you're doing well so far. What I do when it comes to raising capital is mention a deal I have been looking to investors at local meetups. If it is a good deal then the right person will be willing to look at some private money options or even look to structure a partnership where they bring in the capital and lend-ability and you manage the deal for them. Just a thought there. Take down the first property and then do 4 more, set big goals.
- Realtor · Ocean City, MD · Member since 2019 · 54 posts · 26 votes3y
@Lauren Kormylo How is the market in Rehoboth for STR's? I have one in Bethany and the off-season is so tough compared to Ocean City. Ocean City does so much to drive tourism year-round and I have found that Bethany does not do this as much. Summer is great in both markets though!
@Sarah Kensingerundefined I like this idea. Would you be willing to share a bit about how you found hosts to allow you to co-host for them?@Michael Baum I do have equity built up due to appreciation so that Is an option. & I did a DSCR for 2 of my properties in the past. I enjoyed the process, but rates are very high right now.
@Robin Simon one is a second home loan with a great rate and the other is a hard money DSCR loan also with a great 30 year fixed rate (thanks to the covid rates).
@Account Closed agreed it is a scary time. I am seeing listings sit longer in this market and competition is lower. I think that if you can get a deal that makes sense and then refi down the Road when rates lower it could put you in a good position when everyone else wants to start buying again.
- 3ySarah KensingerPro MemberReal Estate Consultant · OH · Member since 2023 · 2k+ posts · 1k+ votesSure! There are many different ways to find potential hosts to co-host for. I found some local people here through biggerpockets, then we also have a website and blog, I heard one lady gained several properties through social media marketing, and calling listings for rent by owner to see if they would be interested in switching to STR (hopefully I didn't just open a can of worms). With this option you need to know the STR numbers of the area, and that the owner would have a significant increase of monthly rent. My favorite is going to REI meetups!
Quote from @Heather Carrow:
@Lauren Kormylo How is the market in Rehoboth for STR's? I have one in Bethany and the off-season is so tough compared to Ocean City. Ocean City does so much to drive tourism year-round and I have found that Bethany does not do this as much. Summer is great in both markets though!
@Sarah Kensingerundefined I like this idea. Would you be willing to share a bit about how you found hosts to allow you to co-host for them?@Michael Baum I do have equity built up due to appreciation so that Is an option. & I did a DSCR for 2 of my properties in the past. I enjoyed the process, but rates are very high right now.
@Robin Simon one is a second home loan with a great rate and the other is a hard money DSCR loan also with a great 30 year fixed rate (thanks to the covid rates).
@Account Closed agreed it is a scary time. I am seeing listings sit longer in this market and competition is lower. I think that if you can get a deal that makes sense and then refi down the Road when rates lower it could put you in a good position when everyone else wants to start buying again.
Your opinion on refinancing reminded me of what a realtor recently told me...you marry the house and date the interest rate. I thought that was a pretty good analogy to remember!
- Realtor · Ocean City, MD · Member since 2019 · 54 posts · 26 votes3y
Thank you for sharing your knowledge!! I will look into this and consider it as an option as I do very much love managing my own rentals I feel like I would enjoy helping others with theirs too.
& yes! I am a realtor and I say that all the time. Marry the hose and date the rate! You can always refi down the road.
- Rental Property Investor · Phoenix, AZ and Rehoboth Beach DE · Member since 2019 · 1k+ posts · 1k+ votes3yRehoboth is probably a little better than Bethany for the off season, because it has more year round residents and activity, but rentals are still pretty dead over the winter. I haven't had mine operating a full year yet. I know OC is doing a lot of off season promoting and events, but by the calendars of the STRs I've looked at, it still doesn't look like most properties are booked then. I'm glad you're having good results there.
Quote from @Heather Carrow:
@Lauren Kormylo How is the market in Rehoboth for STR's? I have one in Bethany and the off-season is so tough compared to Ocean City. Ocean City does so much to drive tourism year-round and I have found that Bethany does not do this as much. Summer is great in both markets though!
- Realtor · Ocean City, MD · Member since 2019 · 54 posts · 26 votes3y
Quote from @Lauren Kormylo:
Rehoboth is probably a little better than Bethany for the off season, because it has more year round residents and activity, but rentals are still pretty dead over the winter. I haven't had mine operating a full year yet. I know OC is doing a lot of off season promoting and events, but by the calendars of the STRs I've looked at, it still doesn't look like most properties are booked then. I'm glad you're having good results there.Quote from @Heather Carrow:
@Lauren Kormylo How is the market in Rehoboth for STR's? I have one in Bethany and the off-season is so tough compared to Ocean City. Ocean City does so much to drive tourism year-round and I have found that Bethany does not do this as much. Summer is great in both markets though!
I think the key to getting off-season bookings is by reducing your rates and actively managing them. I do drop down significantly, but I factor in what it would cost to run my place on a day-to-day basis and make sure not to go lower than that. My goal is to fill the vacancy, even if I am not making that much per night. At least it is going towards paying the bills. Most reservations I get in the winter are weekends, but thats enough to keep me happy. Of course, summer makes up for it! Thanks for sharing your experience with your place in Rehoboth!
- Rental Property Investor · Potomac, MD · Member since 2020 · 23 posts · 11 votes3y
@Heather Carrow
Interesting. I don't get any rentals during the off-season but maybe I can reduce my rental to see at what price point I can get some weekend rentals.
The one thing I did find out when I had a management company manage my property a while ago is that there are people who rent properties full-time during the off-season at a greatly reduced price. They said they had renters that wanted to rent my townhouse for $1000 per month for six months between October to March. Which is what the property makes in 2 days during the high season.
It would help pay part of the mortgage but in the end, decided not to do it. Full-time can add alot of wear/tear on the property and increase in property management time for it. - Lender · New York, NY · Member since 2022 · 1k+ posts · 1k+ votes3y
@Heather Carrow when you say hard money loan, are you more referring to just a private loan in general, or specifically a short-term/bridge loan (i.e 6-18 months) that is used either for the purchase + rehab or the home, or just the purchase of the home (but on a tight time frame) with an interest rate of around 9%-11% and 1-3% in origination fee? Trying to understand if you're referring to a DSCR loan or a true "hard money loan."
- Realtor · Ocean City, MD · Member since 2019 · 54 posts · 26 votes3yHey Zach! We used a DSCR loan for two of our properties. We were able to lock in a fixed rate of 5.25% for 30 years, which was attractive. Now they are at 10% interest in this market.
Quote from @Zach Edelman:
@Heather Carrow when you say hard money loan, are you more referring to just a private loan in general, or specifically a short-term/bridge loan (i.e 6-18 months) that is used either for the purchase + rehab or the home, or just the purchase of the home (but on a tight time frame) with an interest rate of around 9%-11% and 1-3% in origination fee? Trying to understand if you're referring to a DSCR loan or a true "hard money loan."
- Member since 2020 · 4 posts · 1 vote3y
I know this post is old but would love some input from those of you with experience. Im looking at an off market deal and would like some rental projections please reach out thanks guys
- Rental Property Investor · DMV · Member since 2023 · 11 posts · 6 votes3y
Quote from @Christopher Chiofalo:
I know this post is old but would love some input from those of you with experience. Im looking at an off market deal and would like some rental projections please reach out thanks guys
airdna.com
- Rental Property Investor · DMV · Member since 2023 · 11 posts · 6 votes3yhow did you structure your hard money terms for the STR.? most lenders I talk to want thier money back in 1 year . I'm looking for 300k for a portfolio of long term rentals. thanks
Quote from @Heather Carrow:
@Lauren Kormylo How is the market in Rehoboth for STR's? I have one in Bethany and the off-season is so tough compared to Ocean City. Ocean City does so much to drive tourism year-round and I have found that Bethany does not do this as much. Summer is great in both markets though!
@Sarah Kensingerundefined I like this idea. Would you be willing to share a bit about how you found hosts to allow you to co-host for them?@Michael Baum I do have equity built up due to appreciation so that Is an option. & I did a DSCR for 2 of my properties in the past. I enjoyed the process, but rates are very high right now.
@Robin Simon one is a second home loan with a great rate and the other is a hard money DSCR loan also with a great 30 year fixed rate (thanks to the covid rates).
@Account Closed agreed it is a scary time. I am seeing listings sit longer in this market and competition is lower. I think that if you can get a deal that makes sense and then refi down the Road when rates lower it could put you in a good position when everyone else wants to start buying again.
- Member since 2020 · 4 posts · 1 vote3y
Quote from @Apollos Hill:
hey thanks how realistic are the numbers that are on air dna ?Quote from @Christopher Chiofalo:
I know this post is old but would love some input from those of you with experience. Im looking at an off market deal and would like some rental projections please reach out thanks guys
airdna.com
- Rental Property Investor · DMV · Member since 2023 · 11 posts · 6 votes3y
Quote from @Christopher Chiofalo:
Quote from @Apollos Hill:
hey thanks how realistic are the numbers that are on air dna ?Quote from @Christopher Chiofalo:
I know this post is old but would love some input from those of you with experience. Im looking at an off market deal and would like some rental projections please reach out thanks guys
airdna.com
Very. ?
- Realtor · Ocean City, MD · Member since 2019 · 54 posts · 26 votes2y
Quote from @Apollos Hill:
how did you structure your hard money terms for the STR.? most lenders I talk to want thier money back in 1 year . I'm looking for 300k for a portfolio of long term rentals. thanksQuote from @Heather Carrow:
@Lauren Kormylo How is the market in Rehoboth for STR's? I have one in Bethany and the off-season is so tough compared to Ocean City. Ocean City does so much to drive tourism year-round and I have found that Bethany does not do this as much. Summer is great in both markets though!
@Sarah Kensingerundefined I like this idea. Would you be willing to share a bit about how you found hosts to allow you to co-host for them?@Michael Baum I do have equity built up due to appreciation so that Is an option. & I did a DSCR for 2 of my properties in the past. I enjoyed the process, but rates are very high right now.
@Robin Simon one is a second home loan with a great rate and the other is a hard money DSCR loan also with a great 30 year fixed rate (thanks to the covid rates).
@Account Closed agreed it is a scary time. I am seeing listings sit longer in this market and competition is lower. I think that if you can get a deal that makes sense and then refi down the Road when rates lower it could put you in a good position when everyone else wants to start buying again.
I've used DSCR loans with Visio lending in the past. They work with STR's and its 30 year fixed.
- Rockford, MI · Member since 2018 · 97 posts · 26 votes2y
Quote from @Sarah Kensinger:
Sure! There are many different ways to find potential hosts to co-host for. I found some local people here through biggerpockets, then we also have a website and blog, I heard one lady gained several properties through social media marketing, and calling listings for rent by owner to see if they would be interested in switching to STR (hopefully I didn't just open a can of worms). With this option you need to know the STR numbers of the area, and that the owner would have a significant increase of monthly rent. My favorite is going to REI meetups!Quote from @Heather Carrow:
@Lauren Kormylo How is the market in Rehoboth for STR's? I have one in Bethany and the off-season is so tough compared to Ocean City. Ocean City does so much to drive tourism year-round and I have found that Bethany does not do this as much. Summer is great in both markets though!
@Sarah Kensingerundefined I like this idea. Would you be willing to share a bit about how you found hosts to allow you to co-host for them?@Michael Baum I do have equity built up due to appreciation so that Is an option. & I did a DSCR for 2 of my properties in the past. I enjoyed the process, but rates are very high right now.
@Robin Simon one is a second home loan with a great rate and the other is a hard money DSCR loan also with a great 30 year fixed rate (thanks to the covid rates).
@Account Closed agreed it is a scary time. I am seeing listings sit longer in this market and competition is lower. I think that if you can get a deal that makes sense and then refi down the Road when rates lower it could put you in a good position when everyone else wants to start buying again.
Your opinion on refinancing reminded me of what a realtor recently told me...you marry the house and date the interest rate. I thought that was a pretty good analogy to remember!
Just curious, how did you find some cohost clients through bigger pockets?
- Rockford, MI · Member since 2018 · 97 posts · 26 votes2y
Quote from @Heather Carrow:
Hi BP community!
As my investing career has been advancing I wanted to start a thread for people interested in short term (or long term) rentals in Ocean City, Maryland and the Delaware beaches.
I have two STR's in Ocean City that are doing very well. I also have one in Bethany Beach and Lake Harmony, PA. So far, Ocean City has been my favorite market. I am also a realtor in MD & DE and have been helping other people get STR's in that area.
My goal is to acquire another property this year, but I am struggling to build capital fast enough to amount to a down payment. I have used hard money for my last two purchases and rates are so high right now that it kills most deals. What are others doing to raise capital?
Have you thought about partnering? You have the experience and team in the market, it sounds like you just need a $$ partner. yes you would give up some of the equity but it would help you scale faster if that's your goal.
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