All Forum Posts by: Clayton Mitchell

You can always reach out to a local real estate agent, they should be able to get you in contact with a few lenders that do DSCR loans.

Everything depends on your investment strategy, what you enjoy doing, and what your long term goals. As well as how much time and energy you want to put into an investment. You could do almost anything with that amount of capital and see returns of 10-20% ROI. I'd be happy to zoom and talk through some options if you'd like!

 Possibly, but with the reliability of the military bases it can be somewhat offset.  The military's BAH/salary is somewhat guaranteed even through recessions.  Plus with high vacation traffic/rising rental prices in Destin and surrounding areas people that work in the tourism industry are having to find other places to live, driving demand to the smaller local markets (Fort Walton Beach, Navarre, Freeport, Defuniak Springs, etc. ) in order to find more affordable housing.  David Greene just closed on a multifamily complex in FWB a few months ago.  The military BAH was just increased 20% at the beginning of this year to keep up with inflation, which is driving rental rates to increase by the same amount.

Here is an article by CBRE on rising industrial market growth, it goes into some population, job, and thus rental growth

https://www.cbre.com/insights/... 

Here is the population growth numbers per county in Florida. The counties that make up the Emerald Coast ranked 8th, 12th, 52nd, and 63rd, out of the 67 counties listed.

http://www.usa.com/rank/florid...

You could also look into Central Florida which has also seen massive population growth over the past year.

The Florida panhandle (Pensacola to Panama City) can be a great place to look into. Our markets aren't as saturated with investors as bigger cities like Tampa, Miami, or Orlando. We have a strong military presence (from having four military bases and multiple schools located within the 100 mile stretch of the coast) and a strong population that comes for vacation. With the large military population and all of them receiving a basic allowance for housing (BAH), it is guaranteed renters with new families coming in every few months/rotating out every 3-5 years. Their BAH essentially creates a government backed/ guaranteed rent check every month that is set according to local rents (kind of like having HUD tenants).

With it being an STR the amount of bathrooms are not as important. If, for whatever reason, needed to turn it into a LTR, rent by the room, or selling it to someone who wants to live in it then having the same amount of beds to baths is proffered. This concept can be seen in new construction trends where builders are opting for larger bedrooms and each room to have an en suite bathroom for convenience and privacy for tenants. They are sacrificing space in the shared/common areas for bigger rooms and private bathrooms.

What are some of the steps to becoming a STR/Airbnb manager? Any good resources for those wanting to learn more or become STR managers? Are there any licenses I need in order to become one?

I am a realtor and having been thinking about expanding my services to include STR/Airbnb management for my clients. I have worked as a property manager for LTR's before and am currently a landlord, but I have never done a STR. I figured this may be an easier way to gain knowledge and experience in the STR space without having to go out and purchase my own. As well as gain some extra income on the side. I already have a list of vendors and a few connections to STR space locally.

MTR's could increase in popularity/ be a viable strategy for areas that are popular vacation spots or places where large amounts of people are moving to. So that people who are interested in moving can travel and "test" how living and working there will be. For example, travel nurses getting contracted to hospitals at the beach, or people that work online (seemingly everyone now), or for the slow months for STR's in places that weather is a big factor (snow birds).

It could be a good strategy for investors to switch to from LTR to MTR to get more money per month using the same property. It would likely have a negative effect for investors with STRs to switch to MTRs due to a decrease in monthly rents and increased chance of vacancy. For people that switch from STR to MTR they would have decreased expenses and tax (less cleaning and maintenance fees due to less turnover and no 5% bed tax).

Does anyone know if you can MTR in areas/cities that aren't allowing STR/Airbnb for single family homes? Could this be a possible work around for those areas or do they (the city council) typically put a 6 month minimum for rentals in that area?

Hey @J Raj!

Welcome to the wonderful BP world.  Kevin has some really good places to start.  If you want to start investing/saving, one of the best places to start is with whatever your situation is now!  If you're renting, try getting a house/room mate and subleasing to them to decrease your housing expense.  If you own your home you can do the same!  One of the easiest ways to get started and practice/figure out some of the potholes is to try and find creative ways to decrease your current housing expenses, and save that money to buy your first investment!

You could look into getting a DSCR loan (bank statement loan), which would qualify you based on the potential rental income of the property. They are common for people that are self employed, run a business with a lot of "expenses", or can't qualify for normal financing due to their DTI. It would require 20% down instead of 3-5%, but if you could save up the down payment it will get you into the real estate game faster. Ask your agent for local lenders that can do creative financing or investment type loans.

You could also try to get a family member to be a cosigner, in order to use their income/employment history to qualify.  

@Trevor Riley any particular reason why you are wanting to put 20% down on your next house? In the grand scheme of things interest rates are still relatively low. You could possibly do a 5% down conventional loan (depending on your DTI) or go 3.5% with FHA and get more house for the same down payment. Always going to be a fan of house hacking, buying small multi-fam, or a duplex, but why put 20% down if you don't need to. Could you possibly use your savings for the down payment on your new primary, then HELOC or cash out refi and get another property as well? You may also be able to get in contact with an investor friendly lender, and use a DSCR loan to purchase a new/another investment property. Taking you from 1 property to 3 or more depending on if you go for MF as a primary. You can use an 3.5% down FHA loan for up to a fourplex technically.