All Forum Posts by: Noah Weitzman

Hey @Matthew Roder thanks for reaching out. It was bought very recently so not on the previous year return. the 75% market rent is interesting. So even though it is not a long term rental and is not rented out could we use 75% of the fair market rate? Also could we add in 75% of our last STR's market rate to our DTI ratio?

Hi @Alex Bekeza, Thanks for the fantastic info. Its incredibly frustrating given how much the other STR is making that we cant use an ounce of it to qualify for a new loan. Yes I own 2 other companies and so most of my income is self employed. We are in Texas. Would you happen to be able to service one of these "commercial" options. If so would love to chat. Noah

Hey Everyone! Thanks for reading this! we are looking to purchase another STR but our DTI is too low. This is because the other STR we own cant be used as monthly income. Has anyone found a good way around this? It is my understanding that you can use 75% of the fair market rent for a property for Fannie loans. Our lender did not know about this but wondering about others experiences? Thanks!

Thank you both for the answers it is much appreciated. @Heather Easterbrook Is there a resource you would recommend for finding Private lenders? I have done some research but wondering if there is a way to filter through the crowd? Thanks! Noah

Hello Everyone! We run and own an STR property and it has been going very well.

We are curious as to how we can speed up the acquisition of new properties by utilizing an outside loan and this brings me to some questions. I searched through the forums and could not find a good answer for this. 

What kind of loans can be used for a real estate purchase? 

Is running an STR considered commercial and therefore can we use commercial loans?

In that case would we need to LLC and then move our properties under it?

Does anyone know the best way to go about this? 

To be clear we obviously know of traditional mortgage loans but want to know how to use loans to essentially fund down payments + closing costs. 

Thanks so much! 

Noah

@Frank Jiang. Thanks again. I really like the thought on that one, but dont like how it leaves out interest. Is there any return calculation that would do a beter job of this on a month to month basis? I feel like using your above equation but taking interest away from NOI would be good. So Cash on Cash = (NOI - Interest) / Total Cash invested. No sure what that metric would be called.

Let me know your thoughts maybe im way off my rocker here. 

@Frank Jiang Thank you. If I am running it month to month though and have not recaptured principal because I have not sold the property. How would you deal with that then if calculating cash on cash return for that month? 

In this instance is there a better metric that is more reflective of the month to month return? Short term rental investors are not as concerned with resale and really really look at the month to month performance. Thanks so much again everyone! 

Thanks everyone for the awesome responses! @Jason D. you are right im asking about monthly cash on cash return. I think what I am going to do is include principal as a negative in terms of monthly cash flow becasue technically it goes "out." 

However, when calculating a return % I am going to differ it until the sale. So for calculating a monthly return % it would not count for either a posotive or negative. We are designing a short term rental bookeeping app and I know principal is an area of contention so its interesting to hear the various view points. 

Thoughts? 

Hello! Thanks for reading this and for the help. 

For all you short term rental owners out there, when you are calculating your return (cash on cash) are you including principal as an expense, income, or deferred until the sale of the property? 

The community seems pretty split on this from what I have read. Since you do not realize principal until a sale its hard to quantify as monthly income, however, since you will get that money back at a sale its not really an expense. 

How do you quantify this conundrum in monthly return calculations? Thanks! Noah

Hey @Jessica Peng 

I have been selling on Amazon for over 2 years now. I agree with what alot of people have said especially @Micah Cook and @Brian Ellis

@Brian Ellis

The main problem that you will never be able to get around is that with Amazon you are building a business on someone elses foundation (Amazon). Therefore the more money and time you put into it the more power they have over you. From experience, they don't care at all how they treat their third party sellers and will shut down your account or take your items off without notice or hesitation. 

My friends all ask me if Amazon is something they should do and I do my best to turn them all away. I have seen tons of other sellers lose money, sanity, time trying it. Stick with real estate just my 2 cents. 

Hope that helps!