All Forum Posts by: Lyndsay Zwirlein
Lyndsay Zwirlein has started 4 posts and replied 317 times.
Post: Should I sell or rent?
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Quote from @Justin R McCullers:
I have a home at the beach and I was trying to short term rent it and have not been having a good experience. The market seems far more saturated now for STR, and all the renters have been partying and over occupying the home. I have had to get cops involved twice and the ring doorbell showed what looked to be drug deals going on all night during the last occupancy. I know my neighbors as I lived there 10 years and I don't want to do this to them.
My question is, the home is paid off and in a desirable area. I could rent it for $3,000 a month or put it up for sale. A few months ago I think I would have gotten $600,000 but now after the last rate hike I am worried about selling it. I think I would get (hopefully) $550,000 but I am worried it may sit or I get low ball offers with everything going on. I don't "need" the money right now so should I sell or hold? If I sold, I would put half towards my current principle and the rest on stand by for future deals. If I hold, I would just the cash flow for monthly expenses. Thank you and look forward to your feedback!
I would try to hold like everyone is saying. If you need to access the equity, you can do a HELOC or cash out refi. At 50% LTV like you stated, your rates will be more favorable.
If you continue to use as an STR, I'd definitely increase your ADR to attract better guests. Even if you have lower occupancy, the property should still cash flow well with no (or low) mortgage.
Post: Short term rental insurance
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- Votes 209
Quote from @Michael Elder:
Got my first quote for STR insurance at $4,190/yr. I'm wondering if there are better options. Could I just add general liability insurance to my existing homeowners? Or do I just need to bite the bullet ?
Where is the property located? We see the prices range depending on state (ex. FL is expensive) and whether additional coverages are needed (flood, hurricane, wind, etc). Like everyone said I recommend shopping around!
Also if you get specific STR coverage (versus general liability insurance on existing homeowners), it will often cover loss of rental income. I personally always like to make sure that's included.
Post: Attorney recommendation in TN
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Any real estate attorney recommendations in Tennessee? Thank you!!
Post: Looking to Invest in Destin/Pensacola for STR's Who to know?
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Quote from @Chris Webb:
I am just following this conversation as I am looking for a beach home in the spring. @Lyndsay Zwirlein, I am curious if points will help with the cash flow.
Post: Vacation property down payment pros and cons
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- Posts 331
- Votes 209
Quote from @Steve Bell:
Looking at a STR to make first real estate deal on. Can anyone tell me why a lender might discourage 10% down on a vacation rental? I understand it's possible that interest rates would be higher than putting down 20%, but would there be any disadvantages of putting only 10% down on a vacation rental other than interest rate? Especially if I am trying to minimize out of pocket funds to begin investing. Thanks for any advice.
Post: Questions about DTI
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Quote from @John Cho:
Need some advice and some basic questions about maxing out conventional financing before resorting to commercial financing/DSCR loans for STR.
Im trying to figure out how much I can afford on my next acquisition based on DTI. Ive got pristine credit (>790) and can put 20% down. Some of the lenders Ive spoken to have just used my W2 wages and discounted what Ive made on K1 income as a LP in syndicated deals and 1099 income reported on schedule C. I also have irregular biweekly paychecks due to variable income I make on bonuses but my W2 is relatively stable year to year. Im also a little confused that some lenders wont consider rental income from a STR at all or some after one or two tax returns and how that fits into DTI calculations.
What do I need to communicate to lenders/brokers that so that I can get gauge of what the max purchase price I can seek on my next acquisition
while minimizing the amount of financial colonoscopy I need to perform with all the document requests/credit pulls?
STR income -- The Fannie Mae guideline is that you can use income from a property if it is on your scheduled E. So lenders should be counting your STR income if it is filed on your most recent return. It's acceptable if it's just 1 year of history.
Credit -- just an FYI you have 30 days to shop around once your credit pulled. You can have as many lenders as you want pull and there's no impact to your score.
Irregular paychecks -- you need a 2 yr history of income in order for it to be used. If you have variable income (bonus, commission, etc), you will need to show your YTD paystubs (not just W2s) so we can see the breakdown and be able to count it.
To directly answer your last questions, in my opinion you need an LO that has experience with calculating more complicated DTI situations. You have complexity with self employed income, variable W2 income and real estate holdings. You need someone who knows how to do the calculation AND the guidelines underwriters follow.
hope this helps!!
Post: Conventional Financing on STR Property in North Carolina?
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Hey Alan! I offer both conventional and non-QM/DSCR in North Carolina. I specialize in STR and own them personally. Feel free to reach out if you're still looking!
Post: STR current home or buy one?
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- Posts 331
- Votes 209
Quote from @Jarod Rotolo:
Hey everyone, I've recently been able to position myself to consider getting into STRs.
The decision I'm trying to make is, do I:
A) update, furnish, and STR my current home on the panhandle within 10 mins of Pensacola and Navarre beaches, thinking it will cost 20k to update.
OR,
B) start analyzing properties in various markets to purchase a property for STR?
Not sure what the right choice is, how would you make the determination?
Thanks
Post: 10% vs 25% down loan options
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Quote from @Vivian Sung:
Newbie investor:
Thoughts about 10% down with 3 points versus 25% down with 0.38 points, 30 year conventional for a STR? This is for a $255k loan, plan to buy and hold. Not turnkey but no major rehab- mainly cosmetic value add. Initially was going to do 25% down for lower points, but not sure if I'm thinking about this right from an investment standpoint, and second guessing now.
Pros of 10% down:
Less money tied up in investment means more money to use on others
Cons:
More points and money down the drain not towards equity
If downturn and home prices go down will have even less equity in the home.
Now I’m thinking I should go with the 10% since it is a buy and hold??
What am I missing?
thank you.
Hey Vivian! Those are all the right things to think about. Other considerations:
- <80% LTV there is PMI (usually $125-175/mo depending on FICO, DTI, etc)
- Savings. There's a good BP podcast on this recently. If the market changes, it might be nice to have more liquidity to cover payments/expenses instead of having so much $ tied up in equity.
- It doesn't have to be 10% or 25%. You could do 15% or 20% too -- take advantage of better rates or lower points but not tie up so much. meet in the middle.
Good luck!
Post: Vacation home (STR) Lender referrals
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- Posts 331
- Votes 209
Quote from @Christopher Call:
Looking to purchase a 3rd home (2nd vacation home but planing to also use it as our 1st STR also). I have plenty of verifiable W2 income to qualify but want to do this purchase with low money down. Do y'all have any recommendations for lenders that offer good loan parameters.
Hey Christopher! Based on the few details you provided, it sounds like a 90% LTV conventional vacation home loan would work.
We can help answer any questions and get you prequalified. I specialize in vacation homes and investment homes. Our mortgage brokerage is nationwide and we can do conventional and non, so lots of options! Feel free to reach out if we can help!