All Forum Posts by: Sean Bramble

If you have significant equity and you think you will be very exposed to legal risk during that time then maybe, but seems like overkill IMO. We all have a different tolerance to risk though, plus there may be good reasons to put your home in an LLC beyond your plans to rent it on Airbnb for that month.

I wonder if there is a short term STR insurance policy that you could buy for that month. Not sure if you can purchase for such a short time period

Hey everyone,

Was talking to my agent today and she suggested I consider building vs buying an STR since the market i'm searching in is super tight right now in terms of supply. I was previously planning to purchase an existing home with a DSCR-based loan since I left my job recently and can't meet the DTI requirement many lenders require. But if I build instead I'll need some sort of construction loan that I can qualify for given my situation.

I have great credit and enough cash to cover ~65% of total costs (land + materials + labor), but would rather use some sort of loan so I don't have to lock up so much of my capital in what will likely be a lengthy build process.

Have any of you ever built homes in a similar situation as me? Does a construction loan that considers future DSCR and the borrowers reserves instead of DTI exist for a first-time builder?

Thanks everyone!

Thanks for your input everyone! I also heard on the podcast yesterday that Dave Meyer is actually starting a macro focused podcast for Bigger Pockets soon. Forgot the exact name ... I think it was something like "on the market"

Hey everyone! There are tons of general real estate news/ market commentary sources out there, but I was wondering if any of you tune into any STR specific sources? Seems like the whole ecosystem around STRs is still evolving, so not sure many exist yet. I follow Rob and STRU on YouTube, but was wondering if there are others out there that you've found helpful.

Looking for something that focuses on the market in general rather than “here are the deals I’ve done”, “here is all the passive income I’m making”, “how to furnish an Airbnb”, etc

Hey BP! what is your favorite macro-focused real estate news/ commentary source?(other than BP of course 😉)

I’m new to real estate and looking for great, non-sensationalist source to keep me updated on current events and theory. I’ve definitely seen some alarmist looking channels on YouTube, but I’m so new to this it’s hard to tell who to trust. Help!

I’m not a CPA so take this as a guess. But I believe depreciation is linked to the property, not how you use it. So it should theoretically carry forward indefinitely until the financial benefit has been used up. 

I spoke to a company called Valor Lending just now. They offer 85% LTV DSCR loans on STRs, with one catch: they won't estimate revenue based on Airdna ... has to be STR actuals from the previous owner/ host. I'm searching for properties that likely will not have previous STR track record ... so less applicable to me ... but I know many of you are buying existing STRs so hopefully this helps one of you

@Luke J Nelsen just curious what % down you’re assuming for these deals? 10%? 20%?

I’m also new to this, and haven’t looked too close at these markets so take my ramblings with a grain of salt. But I will say this - risk is not only a function of the value of the home you’re buying, but rather the profit margins you’re anticipating vs the future volatility of those cash flows. So a $1M home could actually be less risky than a $300k home depending on your margins, whether it’s a tourism-only market vs somewhere you could also rent long term if the tourism market takes a nose dive, how favorable the regulatory environment will be over the next decades, etc.

I personally would be hesitant to buy a home in a tourism-only market where my acquisition price implies razor thin profit margins - what happens if we hit a recession, people pull back on discretionary spending (vacations), and I can’t afford to lower prices bc I need to pay my mortgage? I suppose I could keep significant reserves to weather these storms, but my point is STRs in vacation only markets are “hospitality”, NOT “housing” (which has traditionally been a less volatile asset class than hospitality). I think you’ll see the next recession (whenever that is) come in like a tidal wave that knocks out a lot of operators who weren’t prepared

That’s not to say the smokies are a bad idea - it really just depends on the deal you find, your margins, and your personal risk tolerance and goals. Not to mention some claim the smokies are recession-proof (as drivable vacation markets become substitutes for fly away markets during recessions)… who knows

In the cities, the risks somewhat reverse. Vacancy risk goes down bc you can rent as housing if tourism is down, but I would imagine regulatory risk goes up (unless you’re able to secure a permit, etc). Still, you’ve got more exit options - long-term, medium term furnished rentals, etc. 

Anywho, just thinking out loud here. I love it when people ramble on my posts bc it always gets me thinking about something I haven’t considered, which is super helpful as I’m just starting out - hopefully this helps you in some way! Best of luck in your search!!

@John Underwood I do ... but would like to preserve capital in order to buy multiple properties quickly