All Forum Posts by: Joshua Strickland

You should be able to get a small condo in PCB for that. It’s a good market

@Jeff Gold very true, especially over the last year. I myself have benefitted from this greatly. My beach condo has appreciated to the point where my CoC would be a full 10% lower if I would have waited to purchase now, and I recently sold a cabin for 170% what I paid in May of 2020. But I would argue buying with a lower down payment to try to get ahead of inflation and hoping revenues stay at 2021 levels or continue to rise isn't sound investing.

Now if you run numbers based on 2019 revenue projections and can still comfortably cash flow with a lower down payment. That seems to be the sweet spot.

I'm personally trying to keep my revenue projections to the point where I can cover expenses if revenue falls and can sell if needed without being underwater. I don't think we will get to that point over the next few years and I'm actually bullish on the STR market, but it's nice having a backup plan.

It's not sexy to hear, but put 20-25% down and you have a nice buffer if the market and/or rates fall. Typically lowers your CoC return but is safer and you'll sleep better at night. (Easier said than done though)

30% down and still a 15-20% CoC is a win. You hedge against the market going down and still get a great return comparatively. It is easier to get a 15 or 20% down loan that typically go at lower interest rates for SFH versus condos.

Find a builder early in the process!

Most of the 3 bedrooms in my complex are king master, king secondary, bunk 3rd room, and queen sleeper sofa. Honestly if I were to go back I would have put another king or at least a queen in my 3rd room to differentiate. Depends on if you’re trying to attract families with kids or more adult couples.

Pricelabs market dashboard will overload you with info. It also costs $10/ month but great insights. Airdna can give you a broad overview.

Also if you just Google “best places to own vacation rental” you’ll find a ton of different list with the best areas. Areas that consistently appear in these list are good.

I'm personally a big fan of the 15% down investment loan products with fixed 30 year debt. Vacation home loans require as little as 10% down and interest rates are 1/2 point better, but you start to skate the mortgage fraud line. Plus with investment loans the right lender can use projected income to help qualify the property in case of DTI issues if you purchases multiple properties quickly.

Depends on your situation. Conventional will have low rates as long as you qualify from a DTI stand point. Vacation rental loan is good if you plan to occupy it for part of the year and have some self use. DSCR is great is you have capital but can't qualify for conventional.

1. Minimum 3 months reserves above your down payment and closing costs.

2. I personally would not, but I’m pretty conservative. There’s something about drastically cutting expenses and grinding to get that first down payment. I believe that makes people better investors long term. Others are on the use all your leverage train because mathematically it tends to make sense, but I don’t believe that’s smart when adjusted for risks.