All Forum Posts by: William Beck

10% isn't bad. I wouldn't overthink it and just let them handle it. Unless they don't know what they're doing and you're getting your butt kicked. Maybe give a trial period and then go from there. If they lock you in for a long term commitment though, that might be something to be skeptical of. 

Ask a few questions:

Is it regulated or illegal? 
Do people go here through the course of the year or is it seasonal?
Is it expensive to buy there?
Are there other people doing it in this area? Yes, is it saturated? No, Is it a bad area? 
Is everyone else on Bigger Pockets trying to buy there which is pushing prices into ridiculously overpriced territory?  

Branson is like a carbon copy of Gatlinburg. Except lake instead of mountains. Drivable tourism destination that serves the central portion of the US. I made a video about it on Youtube titled "What Is BRANSON?" . Check it out!

Check again in March. It'll be strong

Lenders!!! 

You absolutely have to find out if the condo property is going to be okay with the bank you choose if you're getting a loan. As Kevin mentioned, the HOA is technically a 'party' of the transaction and they need to directly disclose things like, what's the HOA fee for this unit, are there any special assessments, is there anything that hasn't been paid by the seller, etc. They also need to share documents they have for on the HOA's budget, financial situation, declarations, insurance info, etc. That way someone who's buying doesn't' get surprised by some crazy special assessment, or find out the HOA doesn't have any money in their bank account and would need to increase fees or have a big assessment to pay for stuff.

The biggest reason for bringing this up about banks is the term "Non-Warrantable". This is getting into the weeds but absolutely essential to know about.  If a condo is non-warrantable the bank won't be able to sell the loan off on the secondary market because of the requirements by FannieMae/Freddie Mac. If the bank isn't able to sell off on the secondary market, they're going to be stuck with it, and they're basically not going to commit to the loan terms they shared. In other words, they'll shut you down immediately on the spot and say, "sorry can't help you out" even if it's mid transaction. 

From my experience, most banks that aren't local commercial lenders, who've already gotten this info because of the experience with deals in these difference communities, want to know this info as well and issue a condo questionnaire directly to the HOA for basically the same info. They'll ask a ton of questions regarding: If a certain percentage of the units aren't owner occupied; the HOA has a lawsuit against it; Operate as a hotel or motel (aka Condotel); or the HOA is underfunded ... and a bunch of other 'risk' factors that I won't list out. If certain answers to these elements trigger a red flag to Fannie Mae/Freddie Mac, they will not buy the loan on the secondary market because it's deemed too risky.

If you get a commercial loan you can pretty much avoid this since the banks will keep that as a portfolio loan and not sell off to a 3rd party with extra red-tape and requirements. It's a higher down payment (20% typically), but not going to BLOW UP YOUR DEAL a few days before closing. Thankfully I've not had it happen to me but there's been a few close calls!

Hey @Tony Gorokhovsky I used to answer this question daily and definitely curious to know about your experience. Where do you currently have your STR's? Agree with Kelly about Branson. I'm actually an agent with her office so I might be biased but it's a hidden gem for sure.

Just depends on where you want to do the STR. Succinctly, people need to live all over and need long term housing but people don't necessarily need to travel everywhere. Just depends.

Leavenworth. Chelan. Cle Elum. Snoqualmie Pass. Packwood. 

<Insert "That's the Million Dollar Question!" joke>

If the budget is a million you could definitely do both. Maybe open your mind to other markets for STR & LTR since the returns you'll get in a market close to home may not work out based on where you live.

Don't buy really nice things, especially furniture, that you have any degree of emotional attachment to. I want my place to be cozy and inviting and nice but I'm not going crazy on changing out all the furniture, redoing the interior decor, etc. 

In the past 12 months I've had guests destroy or damage: 1 tower fan, 3 sunroom patio chairs, 1 Pull out sleeper sofa, 1 queen sized bed & box spring. I've got a great insurance policy which has allowed me to replace these items pretty easily but it's a great lesson learned on the wear and tear furniture will take in a very active nightly rental. 

Plus for kitchen items, if you get a really nice wine opener, frying pan, or knives, etc. ... they might disappear. 

On the flip side, don't buy super cheap crap that's going to break easily. For example, The sunroom chairs in my condo were doomed from the beginning as the seller who sold me the furnished condo put some really cheap fabric ones in there that were going to break eventually. I bought all metal ones to replace those and they've been doing just fine and get the job done.