All Forum Posts by: Mike S

@Mike S The 10% down loan is meant for a second home/vacation home loan.  Many people will purchase a second home using these loans and when they are not using it, they will rent it short-term on AirBNB or VRBO.  I am not a lender but my understanding of the current regulations on these loans is that so long as you intend to use it as a second home, AND you retain control over it (e.g. you're self-managing and not handing it over to a PM), there is no rule against utilizing it as a vacation rental when you're not using it personally.  Do verify with your lender.

What @John Underwood said is correct - you can't use projected rental income to offset the debt from a vacation home, just like you wouldn't be able to use projected rental income to offset the debt from a primary home loan.  You can only use projected rental income to offset debt from an investment loan, which is a minimum 20% down.  

So it boils down to understanding what each product is meant for.  You can purchase a property, plan to vacation there a couple weeks a year, and rent it out the rest of the time on your own, and utilize the 10% down loan to purchase it as a vacation home.  If you have no intention of using the property personally, then by all means get an investment loan at 20% down and use projected rental income to help offset the debt.  

@mikeS I am/was under the same impression as you about 10% for a second home and then renting it for STR.....BUT thought I read you (personally) have to use the property so many times a year to be considered a 2nd home. I am a total newbie though, and am still getting the lingo down. My husband and I are analyzing and almost getting to the pre-approval stage.

@Luke Carl assuming banks are allowing your Schedule E income. My last 3 banks refused to allow it ‘due to COVID’. It even killed my personal home refi a few months ago. They just keep making up new rules as they go.

@Mike S. You guys are working me hard tonight lol

There are very few areas you can’t self manage. So few you really don’t need to know about them as they won’t come up. I’ve been buying here since ‘15 and the only one I remember is hidden mountain east. Ask tour agent to be sure.

As far as prices -this is a long conversation that is open to interpretation. Purchase prices are going up daily but so are nightly rates. I’m getting on a Tuesday in March what I used to get at Christmas. I don’t have a crystal ball but I think they’re going to keep going up.

The hard part seems to be finding them. Although I have not bought in 4 months and I’m not on the sales side I’d things. I really had no problem finding a winner last time I was looking but I also got really lucky! @Julie McCoy is the expert there but she is extremely busy. I threw up the bat symbol let’s see if she bites.

@Mike S  FYI.. Be prepared to trust your realtor and do a deal site unseen or high odds you will lose it if you have to wait and visit before you do a  deal.  I have a friend who tried for 2 years and finally gave up, but he can't do that and he lost a lot of opportunities.  The way things have been the past two years, good properties will have offers and go pending contract within 48 hours if not less.  Good properties will also have multiple offers and quite frequently go to a highest bidder scenario.