All Forum Posts by: JR Woolf

I just got wind that the town had an emergency meeting and have enacted an ordinance banning all hotels, motels, B&B and STVR's as a tactic to prevent the spread of COVID-19.  No news on how they will enforce or what the penalty is for violation.  It is a remote mountain town and already socially distant by nature.  Wondering if anyone else has had this happen in their markets and what their experience was.  I already have several sets of guests slated to check in over the next week or two during the "banned" period. 

@Nathan G. Thanks. Will look into them.

@Michael Baum thanks for the tip. I will check them out.

Has anyone ever had a problem getting a STVR insurance policy due to the fact that the property had a working fireplace? StateFarm said they could not underwrite a policy as a vacation rental if there was a working fireplace. The house is in the mountains and there are plenty of STVRs and a fireplace is a desired feature for most renters. Any suggestions on another ins. Co that I might switch to where I won’t have that issue? Property is in North Carolina. Thanks.

Hoping not to get my bubble burst but we currently have 3 STVRs and looking to acquire our 4th. 1 is at the beach and the others are in the mountains. The one at the beach has been on the STVR market for about 4 years and one of the mountain houses has been on for about 15 months. Just curious as to what type of return constitutes a good return on a STVR based on others experience. I saw one post earlier that got me a little curious b/c someone was asking about acquiring a property for $70k that did $10k annually in rentals and a lot of the comments were negative. We purchased our houses for $425k, $315k and $374k respectfully- the first 2 with conventional mortgages and the last in cash and all have positive annual cash flows. We have our 4th currently under contract and have seen the past owners rental history and based on that this one will cash flow positively too....

We have been fairly proud of our performance thus far but just curious as to if we are above, below or on par....thanks in advance for comments....

@Michael Baum. Thanks guys for the info. Homes are in Highlands, NC and Tybee Island, Ga. Only reason I am shying away from the conventional route is because I have a commissioned based job and even though I have over 10 years in the industry I recently switched firms a year ago so only have a 1 year history. Plus I have some concerns about qualifying for a 4th mortgage based on my DTI ratio. Last time I asked the bank they would not consider my cash flow from the rental properties.

Relatively new to the game. Currently own 3 STVRS in good vacation markets. 2 Gross over 50k and 60k each annually and 3rd just went on the market and that one is paid off entirely and we anticipate it should do the same in annual rentals. Market value is around $380k on the paid off house. We now have an opportunity to purchase another STVR down the road for $245k (turn key- fully furnished) with 2019 annual rents of $40k+.

My question is - does it make sense to take out a HELOC on the paid off house and just purchase the new property outright using $245k of the HELOC money. Based on current advertised rates I am estimating that during my 10 year draw period my interest only payments will be around $816/mo. So essentially I would have 2 income generating properties for $816/mo. I am 100% confident that between the 2 I could easily cover the HELOC payments even if the rates adjust. And still use some of the cash flow to pay down the heloc as I go.

Theoretically- could I continue to acquire more properties this way by taking out a HELOC on the most recently purchase property assuming of course that I meet the requisite LTV?

Other than the adjustable feature of the HELOC- is there any downside that I am missing or is a cash out refi a better way to go and if so why? I like the idea of the $0 closing costs on the HELOC.

Advice or suggestions appreciated.

@Parker Borofsky.  Thanks for the info.  Property was purchased Aug. 28th of 2019 so I guess the 6 month time frame would run from there.  Would you advise doing a cash out refi over a HELOC?  What would be the benefits of one over the other?  We just had contact from an owner of a home just down the road from us and she wants to know if we are interested in her house.  Purchase price would likely be around $215k.  Zillow has it estimated at $257k and she says it grosses over $42k in annual VRBO rentals.  Sounds like a great deal and we may want to jump on it so getting access to the equity in the home we purchased for cash is going to be key.  We had issues qualifying for a conventional mortgage a year ago due to the fact that my wife is self employed and my income as an attorney is commission based and I just switched jobs a year ago so I didn't have a 2 year history with my current employer despite the fact that I have been in the profession for over 10 years.   House we now have our eye on is in NC btw.  Any advice is appreciated.   Thanks. 

I was also looking around for a HELOC on an investment property and they popped up wtih what appeared to be one of the most competitive rates. No info on them yet though...would be interested in hearing what you find out....

Looking for some solid advise.  I currently own three properties that are all vacation rentals (airbnb, VRBO, etc).  2 have been in my portfolio for 1.5 years and 4 years respectfully.  Both have a conventional mortgage and cash flow very well since they are in highly sought after vacation areas.  I just acquired a third one which we purchased for cash approx 4 months ago  due to some fortunate inheritance.  It is in the same area as one of the others and we anticipate yearly gross earnings of 50k+ based on the performance of the other rental.  That being said- we are looking to acquire a 4th rental and trying to figure out our best strategy to finance the new acquisition using the equity from the newly owned cash purchased property.   Any thoughts appreciated.  As far as numbers go - purchase price was $379k.  We added roof, central HVAC, and some structural repairs.  New value is probably around 400k.  Purchase price of the property we want to acquire is asking price of $300k.  It has an existing rental history of 25k annual.  We plan on doing some upgrades and project net short term rental revenue around 35-40k based on our experience in the market with another home we own.   Thanks in advance for any ideas.