All Forum Posts by: Maura Paler

 You have a 3.9 GPA and are studying finance? YES continue your studies, you can do RE on the side and that finance knowledge and the income from your job will come in handy. I don't have an opinion about the RE license. For vacation rental property I would suggest you manage it yourself - a property manager and reservation agent can be very expensive - if you are nearby do it yourself and save a ton of dough. All it takes is some energy, attention to detail, and some hospitality skills. Good Luck! 

We own 3 vacation rentals and are in contract for our fourth, all in the same area of upstate New York, Adirondack Mountains. I manage a bunch of VR properties in South Beach Miami area, but don't own them. 

We have been exploring Florida, Caribbean, Costa Rica, Nicaragua, etc for our next place to invest in VR's. It's a hands on venture, so hiring great help is key - and the more you own the more leverage you have with help - so we are hoping to invest with others in a warm area that is VR friendly (many areas ban weekly rentals!), fun to visit ourselves and has some decent prices still. 

Keep us in mind if you find an area you love. Stuart FL was our last visit - loved the town and is VR friendly. 

Good luck! 

We have a $95K vacation rental for sale on Lake Algonquin in the Adirondack Mountains. Available until May 1, then off the market until peak season rentals are over (mid October) then back on the market. 

Brings in $23K gross, minimum $15K net per year. Have not increased rates in long time. 

8 years of renting, all 5 star reviews. No regulations against weekly rentals here - we own 4, are working on purchasing our 5th. 

Turnkey (sold furnished) with housekeeping, plowing, mowing, maintenance people all in place. Will turn over rental site with reviews as well, which is a huge bonus - it's OK with Home Away (where we get most rentals), not sure about FlipKey yet. 

 GREAT topic - we are in the process of financing our 4th Vacation Rental (3rd investment mortgage), and the big question by the banks are "huh - what - no year lease?". We found a bank that "gets" it, I think, plus we are able to provide reported income from our 3 weekly rental properties plus my vacation rental reservation business, but getting a mortgage is very stressful each time. 

On your next topic - we also have a lake side VR up for sale for $95K turnkey - it's a 1966 trailer so holds virtually no real estate value - but is in great shape, has great views, looks fab, brings in $23K year gross, very low maintenance, and has 8 years of 5 star reviews. So the only way to sell it is for the business of it - as it makes no sense for us to sell it for less because how else could we clear $15K year on $95K? We've had one inquiry from someone who "gets" the investment value of it - but that was through an ad in Craigs List. There doesn't seem to be any real marketplace for this type of investment. Would love to see one created - I would also be interested in pursuing new properties that way! 

We are in contract for a single family investment property (vacation rental). This is our 4th VR investment property, will be our 3rd mortgage. 

We have been pre-approved by one bank (which is no guarantee of a loan we get that), but have found a better rate with another. We need to apply today as per the terms of our contract (within 5 days of signed contract - and we are heading out of town tonight!). 

Our first question is, should we apply to both banks ($500 application fee for each) to better assure a loan?  

Our second question is, we have relatives willing to guarantee the loan, but this would be a last resort we don't want to ask that unless the deal is ready to fall through - so if one (or both) banks rejects our application, and we add them as a guarantor, will that be considered a new loan and we have to start all over again, thus going over our 60 days to close contingency in contract? 

Our concern is that getting the loan will be tight, it was last time, as we have 2 mortgages already and high monthly living expenses (NYC) and we are both self employed. Banks scrutinized every penny and we have a very aggressive accountant. 

We are certain the property is right for our budget, is a good investment, so that is not in question. 

Any advise would be appreciated! 

Hi Chris,

Thank you for your thoughtful response. I had a long detailed financial analysis of the deal written out for you then hit the wrong button and lost it all...in any event...the good news is:

I made a MISTAKE! It was not a low appraisal that I was looking at, it was a lower appraised value - which is what they use for taxes I think - and is most likely based on the last sale of the house. So YAY! 

So our financing should come through at 70% or close to it which is fine with us. We have a good handle on what the expenses will be since we have 3 other houses that we vacation rental in same area, the only variable is the income and I'm pretty confident this will rent as well as the others, which will leave us with a $20-$30K profit each year plus we get deductions and a bit of appreciation. Since we are already doing the work required for vacation rentals, the amount of additional work for one more house is not that much. 

Our exit strategy is simply to sell if it doesn't rent well. At worst we will break even but I think we could flip it and make a little right away if we chose. 

Fingers crossed it all goes through and we start renting before peak season hits! 

 Unfortunately most purchases for the second homes up here are cash buyers.

Asking was $250K. Rarely do we find lakefront under $300K, and never have we found turnkey. No negotiation room on price - it will get taken by a cash buyer which was their preference of course so we offered over asking right off the bat. $10k is not going to make or break us, but the appraisal may :( 

We have an accepted offer on our 4th Vacation Rental property in a small Adirondack town. 

Appraisals often come in way below selling price for vacation homes here due to the type of comps - there are 2 kinds of homes, vacation homes and local homes, with GREAT disparity between the two, but they are not distinguished in appraisals. 

So, this deal is $260K (there was a bidding war for it, I'd thought it would go for $300K), lakefront, turnkey, we expect $45K gross income. Expenses approx $8K for utilities, $15K for mortgage, tax and insurance. 

The real estate agents appraisal came in at $189K! So as an investment property our bank will finance 70% of appraised value, if the bank appraisal comes in as low (or lower!) our out of pocket will be about $130K. We can do it, but....wow. 

Not sure if this makes sense and having a hard time wrapping my head around it. 

Any creative financing suggestions? Thoughts?