All Forum Posts by: Jon Martin

The problem with a HELOC and your DTI is that some lenders will use a worst case scenario as your estimated payment with a variable rate. So even if the rate is 5% when you sign, lenders could base your future monthly payment on a 10% rate. That will eat up a huge chunk of your lending power.

Also, look at your other monthly debt payments. If you have a high car payment, either pay it off immediately or refinance it out over more time. The bank doesn't care that your $800 payment only has 10 months left. 

In terms of your options, you could use part of that HELOC to cover the down payment and the rest to fund the rehab. You also have the option of a 10% down second home loan, however you can only carry one of those at any given time.

Also curious to hear the reason. Maybe it's too soon since the purchase, or maybe you just need a new lender. 

Otherwise it sounds like you have a sweet deal going, so if you can't I would just ride it out. Those are pretty good numbers!

Agreed on everything above. The crawlspace can tell you a lot about the state of the foundation and plumbing, which are potentially the most disastrous and expensive fixes. Same goes for the attic in regards to the roof and framing. 

Seems like a really tough market, at least for entry level. I looked at a few for LTR where it seemed like the 1% rule could work but the listings kept disappearing. The realtor I talked to said that the amount of institutional investment was through the roof, she had just closed a deal with an investor group out of NYC for several dozen units. I realized I was probably out of my league and moved on. 

Rock Hill looks a good growth market too. 

@Bill Olivent I'm planning to do a borosilicate jar with a scoop that I fill with bulk coffee. I think most people now understand that transmission via surfaces/touch is almost impossible, but people still freak out about irrational and scientifically impossible things all the time so who knows. Especially since that coffee will have near boiling water going through it. By that logic, you would have to do the same thing for salt & pepper shakers, sugar, spices, condiments, etc. 

As for tea, I'm planning to stock the bulk multipack from Costco. I think it's 180 bags of 6 or so flavors for around $16-18. Cheap no brainer that should make everyone happy and if they aren't, then those are the types of people who will never be satisfied so why bother?! 

@Danae M Wible Is this off Rocklin? 15+ year SLO County resident checking in!

Nicely done, congrats!

3 seasons is certainly better than 1 or 2, which most of your traditional STR markets are anyway. Plus it gives you some downtime if you need to make improvements.

That said your clock is ticking for the summer season especially if it needs work, so you may want to wait it out unless it's too good to pass up. 

@Jake Durell whether you can make Option 1 or even 2 work for you depends on your situation and only you can decide that. I pivoted to more of a college town market because I knew that the beach condo probably would not appreciate (relatively) much and that a rehab wouldn't help the value much either, so for BRRRR or a future sale it didn't offer much. It's a good cash flow play for the price but you would have to save the proceeds diligently to scale for the next.

As for why they are so cheap @Lisa Marie, it's because these units are close to being swallowed up by the ocean . ..  Hence the amazing view lol. It's basically a sandspit with a huge inlet at sea level. And why sellers are trying to get of them. Same goes for neighboring properties, and if it were to take the brunt of a large 'cane that could be the end of it.