All Forum Posts by: Mitch Davidson

I have some of the same tension at the moment. Having an STR in a larger town can be great for revenue, but risky for surprise regulation. Smaller, border towns have seemed safer to me at times, but have then rolled out surprise regulations as well. For example, here in western NC, Highlands and Cashiers (small towns) just outlawed STR, while I was looking at buying an STR next door in Sapphire.

I too have reservations about buying in vacation-only markets, because when I sell the home I'll likely be limited to selling to other investors, rather than both investors and owner occupants. And that could be a negative for value appreciation as well. Meaning, if I have an STR that can, due to location, also serve as a primary residence, my equity opportunity may be greater than having such a home in an area that is saturated with vacation homes. That said, we're seeing quite a few people move into some of our smaller tourist markets (i.e., as owner occupants), which makes some of them more appealing to me.

@Michael Blum On the plan B matter, I think furnished, month-to-month is a great plan B, and far superior to LTR, especially if the home is already furnished. Keeping it furnished, preserves the condition way better than LTR where people are moving their stuff in and out. I do a 90-day minimum and monthly after that, and I gross double what I would with LTR (while having barely any R&M costs at turns). 

Good thoughts, @Levi Bennett. Over here in Asheville we indeed have many restrictions, but only inside city limits. Basically, 2/3 of so of the City. Inside that area, you can't rent out an entire home STR. You can rent a bedroom or basement, but with some limitations. The two bills birthed by Wilmington's whacky approach, which have already passed the NC House, could of course soon end Asheville's ability to regulate STR's. But not too many of us local STR investors look at that as a good thing. We have a large inventory of whole-home STR's just outside City limits, and quite an affordable housing crisis. Lifting the restrictions would likely hurt quite a few existing STR owners (i.e., increased volume would drive down nightly rates), and would make it all the harder for people that work here to live here. Charlotte is surely a far different market than Asheville. I used to live there myself. But perhaps like Asheville some regulations will serve as a good barrier to entry and a protection for STR owners outside the geographical boundaries.

@Ryan Howell @Mike Szabo @Lindsay Green Some thoughts:

• I think we're seeing a theme, that owning an STR near a WNC downtown has a little more risk of regulatory complications. I've looked at a couple STR candidates downtown Brevard lately, and hesitated because of stuff like this.
• We surely have a serious affordable housing problem to work on. The lower-income people that take care of us in the community can't find affordable places to live, at an increasing rate. Thus, I can understand the concern about too many properties becoming STR. But as an investor, I too believe in STR and the benefits you all have mentioned. Perhaps we need more apartments, and/or to convert some hotels to apartments, etc. I'm personally a little conflicted about it.
• Should the city say STR isn't allowed, owners will still have a better option than LTR or selling. They can convert to furnished month to month. The model works well for me at least.
• Perhaps the NC senate will soon pass one of the two house-approved bills that will take away STR regulatory abilities from cities and counties.

We sure do have some DSCR options, @Austin Largusa. I'll PM you now.

@Austin Largusa, can't go wrong with either of those markets!

Hey @Mike Szabo. Nate Toothaker is a good local surveyor, and an STR investor as well. https://www.biggerpockets.com/...

@Andrew Daughtery, if the property is located inside Asheville city limits (not all of Asheville is), it cannot be rented out short-term. A room or the basement of the home can be rented short-term under the city's homestay program, but many restrictions apply. You can learn more here: https://www.ashevillenc.gov/ne...

Here's where you can find what is inside Asheville city limits: https://www.ashevillenc.gov/de...

Here's a recent update about NC legislation that may soon end Asheville's regulatory power regarding STR's: https://www.biggerpockets.com/...

@Daria Berenato, you can't go wrong with both of the agents mentioned above, meaning @Matt Payne and @Ryan Howell. They know STR, and they know the towns and markets.

Hi @Christopher Hough. As a consumer, you’re protected for sake of mortgage shopping. Thus, you can have many mortgage related credit pulls within a 30-day window and only the first pull will negatively impact your scores. The impact fades off pretty quickly as well. 

HELOC lenders tend to only look at one bureau, especially Experian in my experience.

Have you considered changing your refi to a 30yr? The increased minimum payment of a 15yr is going to limit your DTI for future purchases. You could instead do a 30yr and pay off in 15, with lower DTI for future purchases. Also, HELOC providers will limit you to your DTI as well. I know the 15yr rates are better, but the interest difference seems a small price to pay to gain a few hundred dollars or so per month of spending power.

I too like the approach of using a HELOC on my primary, rather than a cashout, as the bill is separated off, as I don't pay for money I'm not using, and as the LTV can be above 80%. And HELOC rates are fairly low, like 4-5%. Personally, I like Coastal FCU. I just closed with them myself. They'll go up to 100% LTV.

Happy to discuss more if you want to PM me.

@Becky Brown, would enjoy getting together with you and Jason when you're in town, as well as anyone else on this thread. Maybe Tuesday morning, the 7th, for coffee, or beer that evening.