All Forum Posts by: Tanner Lewis

The main thing here is that the property is considered "functionally obsolete". Ie, if a lender has to foreclose on a house, would they be able to move a family of 4 into the house the next day, or will there be individual locks on every door and drywall put up in the living room? 

I would go off of comparable cap rates when dictating the sales price. This deal is mainly operated as a business so I think that makes the most sense. The main hurdle you are going to run into is the buyer's financing. The best way to sell it will be seller financing or to an all cash buyer. Debt financing will be slim pickings

The second home loan guidelines directly state "The Borrower must keep the property available primarily (i.e., more than half of the calendar year) for the Borrower’s personal use and enjoyment"

This means that you can only book it out on STR platforms for half of the year (50% max occupancy), which really sets a cap on your max income.

Check out the Freddit Mac guidelines here if you want to see full eligibility restrictions: https://guide.freddiemac.com/app/guide/section/4201.15

DSCR loans would not have this restriction.

Hey Greg - I can do this at 80% LTV as a DSCR loan. Pretty much the main option out there for a 90% LTV is a conventional second home loan, which means whoever you sell to will need a hefty W2 income to qualify for this deal. I would go DSCR and also take a referral fee on this deal

Hey Daniel - why not qualify the deal with AirDNA? That's usually my easiest way to qualify a deal, and then only if it comes back very low I use a STR 1007 like your current lender.

If you want to look at rates and terms, just shoot me an email and we can connect. 

If you are running into DTI issues, I suggest looking into DSCR loans. You would just be using the property's income to qualify. It would just have to be non-owner-occupied and with a 20% done payment.

Yeah if you want a DSCR loan you cannot have a homestead exception at the same time. You would have to forfeit the homestead exemption.

Can you buy it conventionally, get the STR permit, and then refi DSCR? Would this make it work?

Hey Fiona - are you a foreign national, or a visa or green card holder? 

DSCR lending to a foreign national is doable, but we would need to jump through some hoops. Lending to a Nonpermanent or permanent resident is a bit easier.

Happy to take a look at your situation, shoot me a DM!

why not 1031 to avoid taxes? 

Just make sure to verify ARV with ADU comps. It is pretty common to do ADUs in the California markets, but just make sure you can refi out of the construction loan by increasing the ARV enough