All Forum Posts by: Tanner Lewis

You can connect with many STR team members on the BiggerPockets' "Building Your Team" tab. I also use Chalet, which helps STR investors connect with an STR focused team in new markets.

Hey @Account Closed, I'm happy to answer your lending questions. I personally do DSCR and Hard Money (non-QM), but I am looking for a deal for myself right now with an FHA loan (QM).

1. Yes! Looking for this deal right now. You can take 75% of the other three units' rents towards your back-end DTI to qualify for the loan. The loan limits increase with the unit count, but I would check the FHA guidelines for your market.

2. Yes, as far as I am aware they are 0% down with no PMI

3. I am not sure about this as I am a DSCR lender, but it is best to check with a conventional lender to see what programs they have that are still available.

4. There are a lot of owner-occupied conventional loans that you can get into with a lower down payment. FHA is 2.5% + PMI, there is a 5% down owner-occupied that just rolled out in October of last year, and there are multiple 10% down owner-occupied and second-home conventional loans.

5. Almost all non-owner occupied DSCR loans will have a minimum of 20% down (80% LTV). Commercial loans are available once you get past ~10 units/building, and they will require higher down payments. There are other products on the market, but I am just speaking to the buy-and-hold ones.

You are likely paying for some of the broker fees with the rate. Conventional loans are all Fannie/Freddie, so there is little difference between lenders. I suggest going directly to lenders to see if you can get better rates. Another option is to go DSCR with a direct lender specializing in short-term rentals. Their guidelines will make obtaining a loan on a short-term rental much easier, but the rate may be slightly higher. Most of the STRs I'm doing are in the low-mid 7s, but rates will vary with each lender.

I've seen quite a few deals that make sense in the San Antonio market, even with the high taxes. Just run your numbers and make sure it cash flows. Other than the taxes, Texas is fairly landlord-friendly.

Hey Christian, most flippers fund their flips using hard money bridge loans. These are ~6-month interest-only loans that have a balloon payment at maturity. If you plan to operate this product, you still need to have cash to bring to the table as well as enough liquidity for rehabbing (you can get reimbursed through draws, but you start out using your own liquid). There are some "lenders" out there who "do" incredibly high leverage or 100% financing, but be wary of these as they often try to renegotiate terms before closing/run out of capital/go bankrupt. I suggest using BiggerPockets' "Find a Lender" tool to find a reputable hard money lender. 

Hey Jeremy, the best strategies for high cash flow will also be riskier. The riskiest strategies that have the highest projected income are flipping and short-term rentals, behind that, BRRRRing, and behind that is turn-key cash flowing long term rentals. Of course, many other strategies exist, but these are the basics. 

As a first-time investor, I HIGHLY suggest going with a turnkey long-term rental, and once you begin to learn how to master that strategy, you can branch out into another. It is best first to master the basics, even if it takes longer to make a significant profit. I have seen too many first-time investors try to gut and rehab a house and find themselves underwater on the deal. 

It just depends on your goals. If you are first starting, it makes the most sense to target high cash flow markets like the Midwest or the South and work on building a backbone of good cash flow that can allow you to chase appreciation opportunities. Once you narrow down to a city and an investment strategy, you will want to find team members to help you. First: a realtor that works with investors in your market. Second: a lender who specializes in your investment strategy. Working with both of these team members will help you narrow down your buy box to find that first great deal

The financing for this deal will likely be tough: it is rural (most lenders don't touch), Airbnb (VERY few lenders will do rural STRs), and a mobile/tiny home (which eliminates pretty much all private lenders). Some commercial loans may be available, but nothing in the DSCR/private lending space could finance this. Suppose you do want to pursue this strategy. In that case, I suggest talking with a short-term rental lender and figuring out their requirements before you get into a tricky situation down the road and cannot secure financing for this.

Hey Trent, regarding your credit, you still may be able to acquire financing depending on what your score is. Most DSCR lenders have a minimum of 660, but there are a few that can go down to 620. I suggest going through the BiggerPockets "Find a lender" to get you matched up with a lender you can qualify with.

Hey Katie, the top two people you need to have on your team starting are your realtor and lender. I know you don't want to pay the extra 3% commission to a realtor, but they can really save you from investing in a below-quality neighborhood and help reduce your days on the market (saving you with financing costs). They are also a really great source of deal flow and a great resource when you are just starting out. 

The second person you need on your team is a lender. Just make sure their products align with your investing strategy, and get a feel for their guidelines so you can edit your boy box with your realtor so you do not waste your time chasing down deals that no lender will touch.