Newb looking for wisdom

[Sean Petrash]

Hi all! I'm a travel RN with a few flips under my belt, one commercial property that turned out well, and am looking to purchase a property in New Braunfels, Tx to live in for potentially 6 months out of the year. I thought it might be a good idea to make it an STR while we're on the road as the area does pretty well from I've heard. I haven't looked into the air DNA app to confirm this, but I know it to be true.

I've interviewed a few realtor/investors. I have a mentor in the game that is very successful as a yay or nay resource. I just started applying for lending and have excellent credit with zero debt so it shouldn't be a problem. 

One of the realtors was skeptical that I can get into this market for $200k, and, I agree, it's a bit of a stretch, but with the pay cut I'll be taking going down to Texas, that's about as much of a mortgage as we can afford on one income. Then, hopefully, recoup some of that cost when we're on the road. 

I may have to drive for dollars and scout out my own deal, but the problem with that is all of the stipulations that come with the STR restrictions. New Braunfels doesn't play. I've heard that as long as I'm outside of the city limits I should do ok. Other, lesser returns would be furnished finders, or just a straight 6 month lease with a tenant.

My question is, does this sound like a good plan to start off our real estate investment journey with as little debt as possible? What else should I be thinking about doing, or doing at this point? Thanks ya'll!!! :D

[Tanner Lewis]

Hey Sean - I actually have a deal in New Braunfels closing in a few weeks. Why try to qualify for a deal off your W2 income if you are going to STR it? It seems like a DSCR loan would be a better option to qualify for a higher-priced deal if AirDNA supports it.

[Sean Petrash]

Thanks Tanner! 

Right! So, I didn't even know what a dscr loan was until you brought it up, so thank you for that! It looks like those loans require 20% down, and I've been guided as a sort of philosophy, to use as little down as I can do that I can deploy more capital into other projects. 

And to clarify, I don't want a loan more than $200k because that's all I can afford if everything goes south. It's a way of hedging my bet using as little cash as possible. I could get a 3% FHA loan, pay on it for a year while forcing appreciation, then refi out the appreciation and the PMI.

That was my thought process anyway. Does that make sense? 

thanka again!