All Forum Posts by: Caitlin Fawcett

Thank you

I am about to put my first STR into service. I spent a lot of time getting it set up. Moving and assembling furniture, buying all of the necessary items. It was a blank slate when I bought it, but only needed to be painted and a closet door replaced in terms of "renovation". Would the hours I spent getting this condo ready before it is placed on the market count towards material participation hours or only after it is in service? I am hearing different things from different CPAs. Thank you!

Thank you all so much for your input. This makes me feel better. I don't think the seller will go for a delayed close and we are fine putting more down. I think this time around we are stuck but now I know better. I was warned away from my bank bc it's an investment property in an LLC, but I have a meeting with them tomorrow to discuss options in the future. Now that I am over my initial anger, I can move forward thinking clearly. Thank you again!

Looking for some insight as a newcomer to the short term rental world. We are in the process of buying our first STR. We opted to use a mortgage agent that we were referred to for investors. The process has been bumpier than I thought. We have purchased 5 homes in the past and have never had any issues with the mortgage. We are purchasing a luxury condo in HI, however our combined income is still about 2.5x the purchase price. My husband recently switched jobs and currently has corporate housing until he gets an apt in NYC. We were told because of this we could not get a standard loan and would need a DSCR loan. This was 4 weeks before scheduled close. Rates and down payment would be the same. Now, 2 weeks before the close we are told that the numbers for rental income will not cover the mortgage ($300 under per month estimated) so the down payment and rates will need to be increased. This is bc we plan to rehab the condo and therefore get higher rent. I can't help but think I have been duped here. They have all of our financials so can see that we have the cash. If the lender is worried about us covering the mortgage I can understand raising the down payment, but then raising the rate doesn't make sense. And it's now 2 weeks before closing and they are changing the terms. Does this happen in the investment property world or am I being duped?