All Forum Posts by: Ryan Howell

There is plenty of reading you can do on it.  Three big things from my experience if your plan is to leverage traditional financing:

#1 Go with long term rentals not short term because you can typically count 75% of the rent of a long term lease as income keeping your DTI manageable as you scale. In my experience STR income needs much more income history before it can be counted (someone can correct me if I'm mistaken).

#2 When you go to get pre-approved the first time you need to ensure your initial purchase and rehab is well below what your approved for so that your DTI isn't maxed out immediately. That ensures you can get past the first refinance and have enough margin for the 2nd deal. If I was approved for $400k, I'd probably want to be all in on my first deal at $250k.

#3 If you're initial purchase is not a traditional loan, but cash, hard money, etc, you need to be certain you understand your traditional lenders terms and requirements and that you can refinance out on the back end. Know your max LTV and any limitations.

I would say its not required, but you should consider it anyway.  Find someone who you are comfortable will have your best interest.  Know that they will cost you more money than you can do yourself typically.  Look at that extra cost (10% of rent and maybe 20% extra expenses) and determine if that extra money is worth the headache and devoting your time and mental energy.  I would treat the PM role as a job that pays $X and determine if that's a job you want and separate that from your investment return. There is lost opportunity costs potentially, where you can be spending your time and energy more effectively finding deals, etc where you will make more money.  If you factor that in and you think you want the job of being the PM for that property, then you should go for it.  

I'm not familiar with every state, but you may be able to go to your state's BAR website and access the standard real estate contract forms.  In NC, there is a seller finance addendum to use.  If you're not licensed as an agent, you are not required to use a specific form.  You can probably draw something up yourself and take it to an attorney to create a more formal deed of trust to sign at closing.

Many banks won't do a HELOC if it's bot your personal residence. You can do a cash out refinance probably though.

I quit but decided to go the agent route instead of just investing.  It has impacted my ability to get loans, but not impossible.  Doing my first asset based loan now.  

@Miguel P. Pena - I would suggest you start with reading some books and listening to the BP podcast.  There are a lot of different answers to your questions and its going to depend on your strengths, your goals and how much time you have.  

In general, I would advise a house hack for someone starting out, either rent the basement, rent by the room, or buy a small multifamily and live in one unit.  It helps reduce your risk and it works well in an expensive market. 

@Christopher Johnson - It sounds like your end goal is rentals and wholesaling and flipping are means to build capital and income to be able to own rentals.  If that's the case, I would agree that you should maybe consider house hacking to get started.  

If you are wanting to do wholesaling, why not get a broker's license?  It may limit you in a couple capacities but the level of work involved versus the level of work to be a successful wholesaler is relatively small.  I'm not certain, but I suspect you wouldn't need a broker's license if you double close.  Maybe you could find a lender to cover the costs in between?

All the STR investors I've worked with in the greater Asheville area are telling me that since June the market has been great. There are people from big cities working remotely that are taking 2-4 week vacations with the family while working. In general, people tend to be gravitating toward STR's or camping and away from hotels/resorts. I've mainly done LTR's but am now thinking about getting into STR's because I think it will continue to be a trend.

@Account Closed - I wouldn't let it scare you.  You laid out most of the questions you need answered, I would start by reading Buncombe county's code of ordinance then calling the planning department to ask your questions.  For septic, you can call Environmental health.  Once you have their input, then you can start getting quotes and putting together a plan.  If the cost or effort makes it a poor investment, then move on to the next idea.

There are some shady lenders.  I had one curse me out for going with a different lender after he gave me a quote...especially if its on the commercial side, be careful who you do business with.