All Forum Posts by: Sharon Sasser

Thanks for information about keywords to use and the networking scene. It's a crap shoot everywhere. I'm from North Florida originally and have been to Melbourne a few times. I am not super familiar with the area other than what others who live there tell me like my husband's colleagues that live and work there. We are a military family active duty to reserve and now looking to enter retirement years, so we see how beneficial it is to be close to the base and those amenities. We might rent, but also could buy a home that could work as a rental and buy time to find more of a desirable area and home situation once we get our feet wet. I have found quite a few FSBO listings that look promising. The market is going to have to adjust to allow for more of those creative financing options with sellers seeing the benefits. Insurance and interest make it difficult for the traditional lenders to loan to us even though we can afford the payment, but to them since we deduct a lot of things on our taxes, we don't look to be cash flowing. They don't seem to consider our savings/checking accounts and that we get a big refund from the IRS which can be used toward a downpayment, nor do they consider the over 1M of equity in our assets. I could sell off and get everything I want in our new home, but I prefer to buy and hold. Just waiting to get the word on our move date from my husband's company before pulling the trigger on engaging with realtors and sellers.

Hi Rabia,

I didn't use a home equity loan, but instead chose to use a HELOC to purchase our duplex which is an LTR and our vacation rental on the Big Island. I like that the HELOC functioned more as a credit card, and I only had to pay for what I used, so I had 200K of equity on hand, but only had to pay the interest on 120K. This was in 2019 when I was funded so the terms were much more favorable than they are now. The interest rate was 4.5%. First 10 years is interest only, then after that you start paying principal/interest, but you can pay off the credit sooner and then as you pay it off you can invest in more deals once you get your other properties cash flowing to cover the debt service. In 2020 I took advantage of the low interest rates and got our primary home down to a 3.2% interest rate from its original 4.5% in 2013. I had to refinance/cashout to pay off the HELOC because the lender would not allow that debt/lien on our home which was fine because it was a variable rate HELOC so there is risk that the rate would go up over time as we are witnessing now. If you decide the terms for a home equity loan are more favorable compared to the HELOC then it's just a matter of knowing exactly how much you need for closing on a specific property because you don't want to get stuck paying on debt that you aren't planning on using right away. There was also a tax advantage in that I would deduct the HELOC expenses. I wish you luck figuring out which one works best.

That's awesome. I am looking forward to doing that too eventually once our kids get older. Enjoy our vacation rentals for longer periods of time.

 Thanks for the response. Good to know and good points about the higher potential for homes near the airport. Looking for our forever home. I've always had this dream of a beach home within walking distance to the beach, so I realize I probably need to back up and look at this more objectively instead of emotionally when it comes to extra wear and tear and higher insurance costs, weather impacts, etc. I do need to look closer to the airport since that is near where my husband's job will be and would love to reduce his commute which is currently a pain in the butt here in CA. I say forever home but could always move inland more if the beach life gets to be too much work. 

 I would love to connect. Thanks for reaching out. How often do you visit your properties? I see you are based in CO.

 Mickey,

I'm currently in the same boat and want to do the same thing as you. We have multiple rental properties and I do not plan to sell our primary. Given that we deduct a lot on our taxes due our rentals we look cash flow poor when we are actually able to cover the debt service on a nicer home that is well more than $2500 that the lender currently says we can afford. I caught the Pace Morby bug and plan to actively pursue other options since the trad lenders underwriting is making it difficult to follow my strategy of buy and hold. I refuse to sell anything to purchase the next property. How did it go for you? Would love to hear your follow up. 

Best wishes,

Sharon

I am currently in the process of looking to move to the area. Interested in Satellite Beach. I want to purchase my primary home there with creative financing options, because like all of us I want to set more favorable terms than the traditional lenders can set. Then branch out to do more deals that way for buy and hold rentals once we get settled into our new home. Curious if this post will get any traction since there isn't a lot on here about Melbourne, FL. Looking to connect with likeminded investors in the area. I'm also looking to help owners manage their vacation rentals since I have experience as a remote self-managed owner. I don't want to take on too many, but just enough to bring in supplemental income to continue with my investment plans.  I love hosting and have tremendous passion and attention to detail with property management that seems incredibly hard to find those sorts of proactive skills in people when looking to hire for my own rentals. 

 Craig,

Good question. Apologies for the delay in responding. It's a super saturated market following the pandemic work from home demand. Hosts were making a lot of money then, but the demand has dried up and there is now a ton of competition due to a lot more rentals on the market. So many people purchased in the hopes they could get in on the cash cow, but failed to see how temporary those profits would be. I purchased knowing it wasn't likely going to be covering all my debt service, but that it might cover close to most of my debt. We love Big Bear, so we come up a lot to enjoy the cabin. I try hard to market it and adjust prices to attract bookings. Everything is brand new in the cabin too and our listing pictures are professional. I see a lot of cabins are going on the market now. A mix of people that purchased during the FOMO covid cabin craze and owners that have had their cabin for years. It looks like the market is trying to correct and weed out all the speculators. Prices are coming down a bit. It's a good time to buy a cabin if you want to get in on a second home, but not yet a good time to buy if you are expecting a profit on your investments. Prices are going to have to come down substantially more for it to be considered a good investment for covering the debt service. I don't regret the purchase because I always wanted a cabin in Big Bear and am with what we picked and the location to the forest. 

2023 I made around 4K in profit. I have only had around 4 bookings so far in 2024. Not a good return on investment, but I am having a blast with my family enjoying the cabin. 

Hi Jennifer, it's been a while since I have been on the forums.  I thought I would check out the Big Bear forums and see what is new from the last time I checked.  I just purchased in Sugarloaf.  That's after 3 years of intense looking and two offers in 2019 that I got cold feet on because it would have been the first investment property that I have owned.  I kick myself for not buying back then.  Both those homes were in Moonridge and in the 600K value range now.  A lot has changed since you posted this question 4 months ago.  I did make an offer in January 2022 on a home in Sugarloaf.  It was a cute A frame and ending up selling 30K over asking price.  I offer listing price and a bunch of people swooped in and bid up the price, so I checked out.  I didn't feel right to make an offer that high.  330K for a tiny 1bed, 1 bath with loft cabin.  It was like this for all homes I was looking during this time.  Bidding wars abound for every property I wanted to make an offer on.  After the interest rate hikes of late.  I saw an opportunity to buy because properties were remaining on the market for a long time.  Interest rates priced buyers out of the market because the returns no longer made sense.  I got a decent price on a cabin compared to my peers earlier this year.  My cabin is in a better location of Sugarloaf, it's walking distance to national forest, over 1k square foot home, and the lots across the street aren't developed so it feels less crowded.  My kids have freedom to play safely in the snow.  I plan to refinance when the rates go down.  I see opportunity abound as the Federal Reserve is intent on forcing us into a recession.  Those who have saved for this point in time will find much better deals than their peers did during the pandemic buy surge.  Hope to hear more on here from others and their thoughts and experience with Big Bear, especially from fellow hosts like me.  Returns in Big Bear never made sense going with traditional management companies.  I will have to self-manage like I do our rental in Hawaii.   

@Matthew McNeil

They can be added by our insurance as an "additional Interest" not an "additional insured" on the policy.