West Hollywood, CA · Member since 2015 · 6 posts · 0 votes
Hi there, I own an international company that is doing well managing vacation rentals in Los Angeles, Mexico and Eastern Europe. I am looking to invest some of my profits this year in income generating real estate in South Florida.
As I am new, I am limited in fund and borrowing ability. I am pre-approved for about $190,000 and have about $20,000 cash to spend on down payment, closing costs, repairs, and furniture (if I need to turn it into a vacation rental versus long term rental).
Is my budget realistic or should I wait until I can afford to put 20% down on a property instead of 5% or less?
20% down will get you a decent rate for a conventional loan.
Don't forget about fha which only requires 3.5%
Do your research and figure out your target area and what the rent rates are in the area.
You really should listen to the podcast about vacation rentals. You may just change your mind about that. There are some strict laws in some areas of Florida about vacation rentals.
If you are thinking about buying a condo, please note you will need at least 25% down. Banks require that since they don't thrust the condo boards. Now there are a few exceptions but not many. You would also need a realtor to find you condo's with NO restrictions again not many of them. Vacation rentals are usually close to the coast and in that area you do not buy much under $150k. Sorry to be a Debbie downer :(
You better off spending your money on a single fam home and rent it out, and then you can buy with 5% down. Then when you come for vacation enjoy a nice hotel and you can write off the cost of the hotel as a business expense since you are checking out your investment :)