All Forum Posts by: Chris Baber

A 190k sale price with 20% down is a loan on 152k.  At 7% interest, and 360 months amortization your payment will be $1011.26.  To back into the loan amount at the same payment, but at 0% interest, you end up with a loan amount of $364,053.6, so a sale price of $455,067.  That might not be an easy sell.

They may also believe they can't pay taxes, but we don't live in a world where that works.  Borrowing money costs money, whether you believe it should or not.  If they believe they cannot pay interest, they mean to say they believe they cannot borrow money, because that CAUSES interest, so they have to avoid the cause (borrowing), or get over it and pay what we all have to pay.

Just my opinion.

So, a little over a year ago, I quit my job to focus on getting my then primary residence converted to a Short Term Rental (First guest rented March 2018), which was shortly after acquiring a second property, which I'm rehabbing to turn into a STR also.

I've got over 100k in equity in the first STR (I'm at about 50% LTV now), and I'd love to take a HELOC against that property to reinvest. Generally lenders want to see 2 years tax returns (meaning: more than 2 calendar years) to prove the rental income. I'm not there yet, and don't want to keep waiting.

I know of a few lenders that will do long term (30 year) fixed loans on investment properties at decent(ish) rates, but I'd prefer to keep my current mortgage, and just get another line to use as necessary.

Anyone got any ideas?

Let them know your next move is to file a formal complaint with the regulatory agency, unless they handle it for you without issue.

then follow through if they don't, and tell everyone you know not to do business with them.

They sound competent, and I would try them, but they are not doing business in North Carolina, so I can't work with them yet.

I did try TurnKey Vacation Rental, and that was a horrible experience, and I'll never use them again.

Generally, with hard money, what I've seen is your costs (points &/or rate) go down as your experience goes up.  A couple deals under your belt (in the last 2 years generally) would save about a point up front or 1/2% interest as a very general average.  A couple more deals, more discount.  What I've seen is that if you sound like you know what you're talking about, and are honest about what you're trying to do, many lenders will give you a loan.  It may not be a great loan, but if the numbers of your deal work, and you can have money in your account in 7-10 days with little documentation on your part, it's worth considering.

Good, fast, cheap.  Pick 2

If you don't have a copy of the EIN paperwork and don't know how they have your address, I suggest calling them to get a new copy.  I couldn't find a way online, but didn't look too hard.  The phone number you want is on their site.

side note: have a real business address and business phone number and be sure it's listed in the business 411.

I'm not sure what about your business has changed from that screenshot.  From that D&B account, you should be able to add another company.  Do that and search for your new company information.  If it finds your new company, you have 2 with them and I suggest calling them to see if they can be merged and let me know what they say.

If it doesn't find your new company info (which would be best, since it keeps your history and is the DUNS your other accounts report to), then I'd just update thru iUpdate to have that DUNS number reflect your current company information as well as getting everything else as correct as you can (website, start date, phone numbers, etc.)

Once you verify your update completed and your D&B profile matches your EIN, and is all correct, then apply for the SAM account.  I also know nothing about government contracts currently, but I understand it further develops your profile and improves how you look to lenders.  The added bonus is that someday you may find some investment opportunity that requires this, and it took about a week or so to fully process.

Good luck

@Rich Hupper D&B has been not very good at doing my updates either.  I would use iUpdate to try again.  I don't think that site asks for documentation.  If (after about a week) they tell you it's done, know that their own site can take another week or 2 to update.  

If you register at sam.gov to bid on government contracts, that site was notified within a day of D&B telling me my change was complete.  It also helps your credit profile to be registered.  it's free, and they will help you for free if you want.

I gave nav my info, so far no issues.  They haven't been quite as useful as I'd hoped, but more sources of info is usually better.

this may help

If you previously applied for and received an Employer Identification Number (EIN) for your business, but have since misplaced it, try any or all of the following actions to locate the number:

• Find the computer-generated notice that was issued by the IRS when you applied for your EIN. This notice is issued as a confirmation of your application for, and receipt of an EIN.
• If you used your EIN to open a bank account, or apply for any type of state or local license, you should contact the bank or agency to secure your EIN.
• Find a previously filed tax return for your existing entity (if you have filed a return) for which you have your lost or misplaced EIN. Your previously filed return should be notated with your EIN.
• Ask the IRS to search for your EIN by calling the Business & Specialty Tax Line at redacted. The hours of operation are 7:00 a.m. - 7:00 p.m. local time, Monday through Friday. An assistor will ask you for identifying information and provide the number to you over the telephone, as long as you are a person who is authorized to receive it. Examples of an authorized person include, but are not limited to, a sole proprietor, a partner in a partnership, a corporate officer, a trustee of a trust, or an executor of an estate.

You will use your EIN for the applications, but you MUST make sure your D&B information matches exactly everywhere.  Your address, phone number, etc.

They should appear identical everywhere, so there's no discrepancy.  Much of the underwriting is automated, so if everything looks good, you get approved instantly.  If not, a person gets involved, and who knows what can happen.

I spent hours on the phone finally getting D&B to update my address from

xx somthing Stree, Suite 200 to read as 

xx something St Ste 200

Because that's how it appears on my EIN with the IRS.  Seems trivial, but it is important.

The big benefit to you is that once it's all right everywhere, you know your credit can/will be reported correctly to D&B.  D&B uses a business address to verify and report on a business, so if people report to different ones D&B can treat it like a different business, which is not what you want.

I completely agree with everything @Paige Kelsey said above.  I didn't want to take the time to type that all out, but she's spot on.

One additional point to what she said.  How well can you scale if you're handling all that.  You must have systems in place, or you'll get lost in the weeds.

I'm looking seriously into a property management company to take over for me, to allow me the time to find more properties.  I know they won't do it the way I do, or maybe not as well, but if they do well, and let me focus elsewhere, I'd consider it a good investment.

I live in a very popular tourist area (10M visitors last year I believe), and vacation rentals are very popular here.  I finally got mine listed in March and it's been very successful for me so far.

Lots of things to learn, and lots to invest to fully stock a complete house, with spares and extras and decorate and furnish.

I can't say it's a great long term strategy. Who knows what the environment for STRs will be in 5 years, or 10? Maybe oversaturated, maybe double the income, maybe the economy will no longer support so many travelers, maybe foreign investment will price the market to commercial rates and it'll be like finding MFR properties, who knows.

What I can say is that it's very worth it for me, now, to pursue more of them.  I own a house up the street I was doing the same house hack with; live in while rehabbing.  With the success of this one, I've just taken out a hard money loan to pay to finish asap so I can get it on the market before leaf season.  I expect rates to increase by 30-50% in the fall here.

This house might rent for 1300-1500/mo to a LT tenant.  Internet is satellite (terrible and unreliable, and unfit for working from home), and it's not close to anything commercial.  They will not treat it as theirs, and I'd expect to have to spend some rehab and cleanup once they vacate.

With STR, I've had the following bookings (not yet completed or paid, only booked)

Mar-Apr         $3,405

Apr-May         $1079

May-Jun          $4260

Jun-Jul             $5583

This is NOT what I've been paid these months, but these are gross numbers that were easy to compile.

My expenses are all of the utilities, cleaning, and MY TIME for managing all this.

Utilities average $400/month

cleaning cost about $300/month

supplies cost about $50/month

insurance cost about $100/month

I spend several hours a month writing reviews, researching strategy, fixing stuff, etc

Other expenses are maybe another 10%

I'm still setting up the business formally, and am probably forgetting some things right now.

For me, this is a good return on my investment.  I'm looking to duplicate this strategically moving forward.

All future investments in the STR market for me will also have to be cash flow positive in a LT strategy as a backup plan, as will equity in them.

An often overlooked side benefit of STR is that you've got eyes on your property a couple times a week. Nothing big or unexpected can happen to your place without you being able to file a claim against the occupants, and little things never have time to grow into big problems.

Make hay while the sun shines, but plan for rain.