All Forum Posts by: Julie McCoy

I'm with @Jared Higginbotham - my first thought was liability re: sexual predators.  My second thought was how much I would hate to be across from a school if I were renting it - the noise level and the periods of high traffic in the area would be downsides I'd be sure to mention in a review.

My advice would be: if you want to move forward with it, look into the local laws re: convicted sex offenders to make sure you can conform to them, and prominently disclose in your listing that you're across from a school.  (but personally, I wouldn't touch it, because even if the onus is on the sex offenders to maintain their distance - and I believe it is - you don't want that liability on your conscience or on your finances)

That said, would it be a good property for a LTR?  Proximity to a school with a house that size could be very desirable, but I don't know your market enough to know if LTRs cash flow well there.

Thanks @Richard White!  I'm an AD too - let's hope we aren't going for the same jobs!  ;) 

I do need to reach out to the local lenders - I'm currently staying at the top of a mountain in western NC, so cell service is not good for professional phone calls. :p  Back to LA tomorrow, though, and then I can get on the horn. :)  Those look like some pretty great terms that you got - hopefully I can find something similar!

So you set up an LLC for the primary purpose of getting that loan? My first property I purchased with an investment loan, but they didn't care that I didn't have an LLC. Though as I look to expand my holdings, it's definitely something I've considered.

Thanks @Tyler Work!  I am certainly interested in arbitrage deals - though it looks like what your company does is signs a long-term lease with the property owner and then do profit-sharing?  That's a super creative business model!  Let's chat about some options.

I've looked into Clearbanc a little, they appear to loan a maximum of $100k - which is a little less than what I'm looking for, but is an option I should look into more.

The hardest thing about accepting my first booking was worrying about how strangers would treat my house!  After the first few, I was able to (mostly) stop worrying about it - even though, as my first property, I'm still a bit too emotionally attached. :)  But that mostly means I spend more money and time on it than I would on a pure investment.  (I also am at the property a lot)

I've actually done the opposite of @Jared Higginbotham - my worry made my instant book settings begin very tightly, requiring host recommendations on top of gov't ID and disclosing trip information.  I've since relaxed them and no longer require host recommendations, but I do still want verified gov't ID and for them to tell me why they're visiting the area and who (generally) is in their party.

Thanks so much, @Nghi Le, @Jenessa NeSmith, and @Jon Crosby!  Some really good avenues for me to explore here.  An additional difficulty for me is that I haven't been in the AirBNB game for long - I closed on my first property in June of this year, so alas, the business history is still in its infancy.  

I'll do some exploring with commercial loans, hard money, and lines of credit (hadn't considered that one!) - if I can get a reasonable interest rate, those are definitely good options.  And yeah, Jenessa, the thing that worries me about hard money is I don't want a short-term or balloon note, so I'm not sure if they'll want to deal with me.  But I'll never know until I ask...

Jon, why didn't I think of those things??  And it made me consider looking into an arbitrage agreement, too - which I've researched in my city of LA, but for some reason haven't thought about in this other market.  Thanks!

I agree it's not time-intensive once systems are up and running - it's the getting up and running that takes time!  I wore myself out this summer shopping/closing on the house, furnishing it, developing my system, etc. on a property 3 hours out of town while working 70-80 hours/week.  Would love to use my current downtime instead of putting myself through that again.  

This time SHOULD go smoother because I have one under my belt now, but I'm looking out of state this time, so given the option I'd rather not do it while I'm working my day job.  (however, that will NOT stop me! :) )  Also, I enjoy being hands-on at first to make sure when I launch my rental it's in its best possible form - but I recognize that's not a necessity.

I suppose I could also look at a larger down payment and an eye to refinancing if rates stay low, or borrow on the built-in equity later... 

Thanks for your input, @Jack Bobeck!  Yeah, your thoughts are pretty in line with mine - better possibilities with hard money, but with them come higher interest rates, etc.

Unfortunately, my existing STR is a pretty new acquisition, so there's not significant equity built into it yet. (and yes, getting a loan for that one with my employment history required a ton of paperwork! But my lender was pretty excellent about adapting) And while I might be able to get into a smaller property with my cash on hand, I would really like to use leverage to maximize the reach of my money.

Perhaps I'll just have to be patient and wait for the W2 master to kick in again... of course, once I'm working, I won't have as much time to focus on RE!  Ah, the catch-22... 

Hey all! I have a relatively unique financial position and am interested in sourcing financing for my next STR - I'd love your input/experiences with different possibilities.

Thumbnail of my situation: I'm a professional in the film/television industry, which by its nature consists of short- to medium-term employment. I recently finished working on a TV show, and am now unemployed until I get my next gig (which I'm not in a big hurry to do, since full-time employment means 70-80 hours/week). I rent my residence and have one mortgage on an investment property (STR), and I have a good amount of cash on hand.

I want to dive into my next STR investment, but given that I don't currently have W2 income, I don't believe I'll qualify for a conventional loan. My current STR grosses between $3-4k/mo, and for the time being unemployment will yield $1800/mo. I have excellent credit and my debt-to-income ratio is currently acceptable; when I'm employed it's excellent.

Any thoughts on how I could secure low-interest financing for my next STR? I'm looking at homes with established histories as profitable STRs, with a purchase price between $200-250k. Are there good financing options for me or should I just wait until I'm employed again before I purchase, and get a good ol' conforming loan? Thanks in advance for your input!

Thanks for an informative article!  Also relevant to the Schedule C or E question is something that @Chris Mason posted in this thread: that Freddie Mac will now consider Schedule E income from a STR when it comes to refinancing. (please see the thread for precise info, I'm not an expert!)

Obviously, one should file a Schedule C or E in accordance with the tax laws, but this is a good reason to tailor your situation for a Schedule E if you can, IMO.  :) 

I list on both AirBNB and VRBO, but I hate VRBO.  Something I haven't seen mentioned in this thread is that they charge a "credit card processing" fee ON TOP of the $399/year subscription - something I didn't see disclosed or discussed when I signed up, and which I was very unhappy to learn of.  It's approximately 3% - which is what AirBNB charges hosts, but of course on AirBNB you can list for free.

Like @Avery Carl, my market is a mountain town where the local hosts swear by VRBO... but at least 95% of my bookings come from AirBNB.  I find VRBO difficult to navigate, the website is archaic, and the fees exorbitant.  I'll keep it going for a little while longer, see if I can manage to improve my position there (I'm in the lower 1/3 on VRBO but a first-page listing on AirBNB) but I find it likely I'll drop them in a couple of years if I don't see a significant increase in bookings.