All Forum Posts by: Zach Edelman

Are you self managing or outsourcing for management?

I would advise you on the DSCR loan to implement/request a low duration prepayment penalty (i.e 3 years - 1 yr PPP). This way you can easily refinance in a short time frame after closing and capture the equity you are obtaining from getting a property at such a quality price.

How do you plan to build those tiny homes? I know from experience financing additional tiny homes (not sure if you're looking to do this) can be difficult without having someone that has previous ground-up construction experience. Building a structure from the ground up, since you need to build/create foundation, can be difficult. 

Nice deal. How's the cashflow going so far? Lexington, KY certainly an underrated STR market.

No - but I'd say about 90% of my borrowers/investors utilize an LLC for what it's worth.

Thanks, Scott! Great outline. 

Why is this better than just paying off your entire balance before the statement closing date? Is there a difference?

I've seen some Smokies owners that cashflow well even with high-leverage debt. Obviously - I have also seen the latter, but I don't think having a loan at 75% or 80% LTV automatically rules you out for strong cashflow. Lenders also have interest only options that could help with cashflow especially on acquisitions to allow you to get the listing up, and have your listing gain momentum (some listings start off slow while they accrue bookings, reviews, etc.)

 @Robin Simon thank you for the referral. @Joy McQueary sent you a DM!

Cons I would say are achieving financing. PadSplit's have been difficult to finance because they are considered modified collateral. Lenders unfortunately don't want to foreclose on a home with 6,7,8 homes on a property that's a true single family home. Secondly, the appraisal often notes functional obsolescence because of this and a lack of a common area. The cashflow is great, but getting financing is difficult, especially for refinances post modification.