New to Real Estate · WI · Member since 2021 · 20 posts · 9 votes
Is this a thing? My wife and I are considering taking advantage of 10% down vacation home loan for our first STVR property. Is it possible to include renovation costs into this kind of loan, or would we be forced to take out a separate loan for renovations?
What did you do when you were first starting out? Thanks in advance! This group has been a wonderful resource for us newbs.
Milwaukee, WI · Member since 2019 · 10 posts · 13 votes
5y
We just took advantage of the 10% down on a second home for STR and it's much better than having to bring 25% on a similar income property.
We used the remainder of our down payment for minor renovations and for furnishings.
If you have any questions message me as my wife and I just setup our first STR and it's been our life for the last 4 months but it was super fun and rewarding.
Milwaukee, WI · Member since 2019 · 10 posts · 13 votes
5y
We just took advantage of the 10% down on a second home for STR and it's much better than having to bring 25% on a similar income property.
We used the remainder of our down payment for minor renovations and for furnishings.
If you have any questions message me as my wife and I just setup our first STR and it's been our life for the last 4 months but it was super fun and rewarding.
Lender · Asheville NC · Member since 2016 · 470 posts · 317 votes
5y
I typically buy mine fairly turnkey, and then for smaller repairs, I just ask for a repair concession in the form of them paying part or all of closing costs. Cashflow is typically good enough that it will pay for its own repairs as you go. As @Avery Carl says.."Let the property pay for the property".
"We just took advantage of the 10% down on a second home for STR and it's much better than having to bring 25% on a similar income property."
Hey, Eric! how did you structure your rental business for your vacation home? Did you set up an LLC for the rental and have that LLC rent it from yourselves, since the property was personally owned?
Milwaukee, WI · Member since 2019 · 10 posts · 13 votes
4y
@Allison Morris We have not yet setup an LLC. So far we are keeping track of expenses and claiming the income on our personal income. If we purchase future short-term rentals I think we would go the LLC route.
One thing I never mentioned in this tread is if you are going to rent your second home make sure the bank knows it. Some banks do not allow renting and using the second mortgage vehicle. Its always best to be open about your intentions. My bank's stance was that it was helping us get ahead on the mortgage so they will look the other way.
Is this a thing? My wife and I are considering taking advantage of 10% down vacation home loan for our first STVR property. Is it possible to include renovation costs into this kind of loan, or would we be forced to take out a separate loan for renovations?
What did you do when you were first starting out? Thanks in advance! This group has been a wonderful resource for us newbs.
You bet, David.
Most investors prefer to leverage and use as much OPM as they can, so 10% down with 2nd home financing is a great way to do that with competitive points/rates.
Some investors prefer lower LTV as they want lower payments and less leverage.