All Forum Posts by: Levi Helms

Hi BP! This website is life changing! Thanks for everything so far. So here's the situation...

Your goals and story: Last year my wife and I bought a tiny house and a little slice of land in Fairplay, CO. Far and away, the most difficult part about the process was.....FINANCING! Ugh, tiny houses fall into this tiny crack where they are disqualified from pretty much everything. Traditional mortgage? No way. Mobile home loan? Nope, it's less than 400 square feet. RV loan? Technically yes, but still no. Last year I tried 60+ lenders (attempting the Brandon Turner method of "No? Ok, next"), and only found a handful that could work. Lightstream is the most famous, but the longest term they lend is 7 years. We ended up with a lender that specializes in tiny houses out in Utah, but they ripped my arm and leg off in terms of interest rate and down payment. This doesn't even include the land loan...which was almost as difficult to find too.

Basically, we want to add another tiny house to the lot, and refinance the entire package in a commercial-style valuation. So this would be 2 tiny homes + land, fully rented out. 

Type of property: 1 professionally built, RV certified tiny house + 1 custom built non-RV certified tiny house + 3500 square foot plot of land

Location of property: Fairplay, CO: Link to view

Purpose of financing: Refinance existing loans + purchase, rehab (if needed) & develop land (simple tree removal + concrete work) for 2nd tiny house

Type of financing sought: Private loans. No conventional lender (that I've found) will be able to fit all this criteria, because it's very unique.

Occupancy: Currently rented on a short-term basis (airbnb), however, in the process of securing long term tenants.

Gross rent (for 1 tiny house): $14,400 annually ($1200 monthly)

NOI (for 1 tiny house): $9,600 annually ($800 monthly)

Expected Gross rent (for 2 tiny houses): $26,400 annually ($2200 monthly)

Expected NOI (for 2 tiny houses): $18,000 annually ($1,500 monthly)

Value of portfolio financed at 8% cap rate: $225,000

Loan terms sought: 70-80% LTV loan size ($157k - $180k), 20+ year term

Anticipated or actual appraisal issues: This is where one of the main problems lies. Since it's so non-traditional, the appraisal doesn't exactly apply. The property cannot be valued in the traditional way, which is why I'm seeking a private lender who will value the property in a commercial-style method via the cap rate.

Source of down payment funds: Implied equity (refi)

Income Source: W2 for both my wife and I

Gross annual income (between the 2 of us): ~$300k

Monthly debt obligations appearing on credit report, plus (if applicable) personal rent and alimony/child support/etc: Student loans, rent, and what exists for this tiny house.

FICO: 725

Credit issues: none

Thanks for reading this far! Please, please, please do not skim this post and reply "try your bank bro". I'm looking for thoughtful sources for a private lender or "custom" loans. Thank you BP!

That’s really fantastic info, thank you! I will definitely keep flexibility and creativity in mind. Plenty of money to split is the name of the game!

Hello all! I searched the forums but did not find very clear answers on how to structure a partnership. In this stage of my investing career (just starting!) I have time, but little to no money. Ideally, I would find a partner to fund the deal. 

If my partner is funding 100% of the deal (down payment + rehab) and I am doing 100% of the work, any ideas on how to split the returns? My instinct tells me 50/50, or I have heard to use "preferred return" method and pay the person funding the deal first. 

Any advice, experiences, or ideas are much appreciated.

Cheers,

Levi

Thanks Brian, that helps a lot. I ask about 2 hours away because I’m looking for a “weekend getaway” spot, rather than a long term rental. 

So would you say the prices are primarily driven by the commuter towns? The prices are much much higher in the wealthier towns next to the train stations? 

Thanks again,

Levi

Hello, I am looking at lots/land within 2 hours of nyc, with the intention to build. While sifting through properties, I see huge differences in price, with some land in the low tens of thousands, and some over $1.5 million. I understand that some locations are much better than others, but I can't seem to find any pattern. Can someone please help explain why?

Thanks in advance, and I know it's a broad question so I am happy to answer questions.

Hello BP! This is my first post ever. I have been a long time podcast listener, and I look forward to interacting with the BP community going forward. I will post a little bit about myself after my question. Of course, if this has already been answered, I apologize, please simply point me to the right direction. The fundamental question I'm trying to answer is: WHERE do people vacation and WHY? Subsequently, I want to ask, is this particular short term rental market saturated? Additionally, I cannot answer these questions on gut, because I plan on pitching my rental ideas to investors and I need hard data. It also makes me more comfortable. In order to answer these questions, I've come up with a few measures/ideas: -US bureau of economics travel and tourism satellites report the economic impact of tourism in their state. They report "visitor spending on lodging" among other data. Is this useful? Does it paint a good picture of the vacation market in that area? -number of attractions nearby -most traveled tourist destinations reported by TripAdvisor (or similar) I'm really stuck and not sure where to look next. Basically, how do I determine if a short term rental market is a good market? But, once I figure that out, how do I weed out the areas that are over saturated? (I don't know for sure but I imagine many regions of Florida are quite saturated?) Here are my ideas for rental supply research: -www.airdna.com reports supply side well, but not really the demand at all. -hotels nearby Any and all help is appreciated. Thanks so much! A little about me: I am from Grand Rapids, MI, but I currently work and reside in NYC. I just graduated from college and have zero real estate experience (statistics degree and I work at an investment bank) but I am looking to try my hand at short term rentals. Specifically, I want to purchase unique real estate for vacation rental use. I chose this because unique real estate usually rents at a premium, while the costs of owning/building unique real estate are comparable to traditional real estate. Example: tiny homes.* Tiny homes rent for about the same price as hotels in their area, but they cost around $100k (or less). Here is my general plan: purchase a lot of land, and build a very unique home on it. I do not want to purchase a house and then modify it to be unique, because the costs to make it unique at that point would eat up any earnings. I am looking for lots (I may ask a question in the future about finding lots). I plan on financing the project through a construction loan (hopefully the bank agrees). If not, I think finding private loans will not decrease my chances of success. I then plan to use Airbnb/vrbo as my primary platform for renting out the unit. Well I think that's everything. Obviously feel free to reach out if you have questions. I look forward to meeting the BP community 😄. *I do not want to invest in tiny homes, however, because I believe they are too much of a fad.