All Forum Posts by: Zach Edelman
Zach Edelman has started 19 posts and replied 1227 times.
Post: Airbnb/short term rental calulator
- Lender
- Austin, TX
- Posts 1,263
- Votes 1,284
Hello Justin -
I recommend using bnbcalc.com from Jeremy Werden!
Post: Beeline for DSCR loan
- Lender
- Austin, TX
- Posts 1,263
- Votes 1,284
Forrest -
Not sure what transpired on this loan, or if it did even transpire, but I would give two pieces of advice here regarding DSCR lending, one of which specifically for STRs:
1. Bigger Pockets has a list of recommended DSCR lenders that they themselves have vetted/are comfortable reccomending. That is a great place to start.
2. When seeking DSCR debt for STRs, some key questions you should be asking your lender are:
- Can you underwrite with AirDNA? If so, are there any restrictions (i.e occupancy, market grade, etc, if DSCR is below 1.00x, etc.)
- Can you underwrite with historical booking history? If so, do you need a full year of booking history to underwrite using historicals?
- Can you use an STR based 1007? This really only exists in vacation markets but worth asking to make sure your t's are crossed and i's are dotted.
- What happens if the property appraises as rural? Again, this will only apply to properties in specific markets where the asset could be considered "rural" but if there's even a slight doubt/chance that the property could appraise rural, make sure you understand, what, if anything, are the ramifications.
Post: Short Term Rental Refi
- Lender
- Austin, TX
- Posts 1,263
- Votes 1,284
Not sure of any residential lenders that can value the property off the income approach if that's what you're looking for, but you can still get appraisals that include it. However, for any SFR and duplex, a residential lender will value the property based off the sales comp approach, just an FYI!
Post: indoor pool 10 bed 2 bath refi
- Lender
- Austin, TX
- Posts 1,263
- Votes 1,284
No residential lender will value an SFR based on the income it generates unfortunately. Perhaps if STRs develop into more of an official asset class in the yes of the secondary capital markets this could become a thing, but this is likely years away if it occurs. For now, on STRs that are SFRs (or 2-4 units for that matter), the only "consideration" you can get for the properties income ability as an STR is with the actual DSCR ratio, in which a higher DSCR ratio can lead to better rate, more LTV, etc, not higher valuation, however.
Post: DSCR Rent appraisal - Montana
- Lender
- Austin, TX
- Posts 1,263
- Votes 1,284
Hey Matt -
Same questions as Robin regarding occupancy. Certain DSCR lenders will be able to underwrite an the lower of an increased percentage of market rent (110%, 125%, etc.) and the in-place rent if the property is occupied. This can allow for higher DSCR, which can allow for more LTV, and thus less down. Certain DSCR lenders can also underwrite properties that are going to be utilized as STRs with AirDNA projections rather than market rent which can mean they're underwriting with a higher DSCR, and therefore can increase LTV, and thus less down.
Post: 3 yrs. later and over $750k in bookings. What I've learned about rental arbitrage..
- Lender
- Austin, TX
- Posts 1,263
- Votes 1,284
Very good outline, thank you!
Post: Looking to expand our STR portfolio in Florida
- Lender
- Austin, TX
- Posts 1,263
- Votes 1,284
Oakland Park, FL has some great inventory.
Post: Looking for DSCR lending
- Lender
- Austin, TX
- Posts 1,263
- Votes 1,284
Would recommend looking at Bigger Pockets list of recommended DSCR lenders. Great resource.
Post: Is it accurate you can only rent out 2 dwelling units in Atlanta Georgia as short STR
- Lender
- Austin, TX
- Posts 1,263
- Votes 1,284
Quote from @David Holcombe:
I wanted to add an update to this since the Atlanta STR legislation is so uncertain right now. So, Atlanta passed STR legislation in March 2022 that was very restricting. However, as of January 2024, they haven't written a single ticket or enforced their STR rules in any way. The city has acknowledged the current STR rules are not legally enforceable and based that on the recent court case in New Orleans where the requirement to have a primary residence in the city was deemed unconstitutional (Atlanta's current legislation has this Primary residence requirement). Atlanta's STR website shows they're delaying enforcement with no future enforcement date in place. City Council has said they're going to amend and update the STR laws in 2024. The revised legislation that they're trying to push through likely will not have a Primary Residence requirement or limit on the number of STR properties an investor could own. Instead what's in discussion is putting a "global cap" on the number of STR licenses available in the city. This Cap would allow room for some future new STR supply. They're trying to include grandfathering of existing properties (Grandfathering is common in Georgia like non-conforming duplexes, etc). Long story short, no, no one is currently enforcing the 2 property limit. I have several clients that have 10+ units operating as STR's in Atlanta with no issues. Future rules are uncertain but I'm optimistic they'll be favorable. If you need help identifying the best areas for STR in Atlanta, best operators, contractors, designers, etc, give me a shout. Good luck!
David Holcombe
Very helpful information, thank you!
Post: STR/ AirBnB investors
- Lender
- Austin, TX
- Posts 1,263
- Votes 1,284
STR lending specialist here. Would love to connect, Zeke!