All Forum Posts by: Daniel Alvarez

This looks like a solid alternative to a conventional, with greater flexibility, thanks for the tip

@Diana Muresan  yes that would be the plan, thanks

Wow this is spot on (and blew my mind to pieces!), thank you! It also helped me find this article, now that I know how to search for it (in case others come to this thread)

https://themortgagereports.com/27698/investment-property-mortgage-rates-how-much-more-will-you-pay

@Diana Muresan We are coming back to VA in a couple months after a stint in Canada and deciding whether to move back into our old home (now rented) or find a new place. We may refinance it to get some equity out, so want to know how that would work. Am I correct assuming that if we move back in it would have to be refinanced as a OO and if not as INV?

@William Tomlinson This is a project I’ve had in my list for years, but not a priority atm so haven’t really defined it yet. Some pointers I’m happy to share, being from Spain:

- the Camino has a robust and growing base of 300k+ peregrinos annually with avg spend of ~1,000€ back in 2016

- pricing and services offered vary broadly, nightly rates can swing from “la voluntad” (whatever you can) to 100€+ per night with spa etc.

- competition for accommodation can be fierce, esp near Galicia (lessens as you move away along the 7+ official caminos). Avg occupancy <60% I understand. There are publicly (“ayuntamientos” and “parroquias”) and privately run accommodations (businesses, like local hosts and Airbnb’s)

- generally about Spain, licensing can take long, e.g. new construction and tourist permits. Also acquisition costs can be high, esp if financing (with taxes easily add 10% of purchase price)

I’d add also these days the traditional albergue / B&B model can be quite saturated in many areas, so you want to identify those and stay away, then also certain customers segments remain underserved, like cyclists.

If language isn’t a barrier take a look at: www.caminosantiago.org

In terms of the abandoned towns you may spot a good deal but they are not easy to come by anymore. You can search also for “casas rurales” to broaden your property search.

Note as well that each municipality will have its own rules and requirements to acquire property and do business, meaning more time and costs to budget for -aside rant, the amount of independent “municipios” is a big socioeconomic problem in Spain that needs serious consolidation (what do you get with nearly the same amount of politicians as the US, and the most in the EU? More taxes and more chaos is right).

Sorry for the long post, hope it helps.

Does anyone have strong views on whether on rental properties 

1. ALL the interest from a cash-out refinance can be tax deductible (even if the cash is invested to buy or fix up another property), or
2. Only up to the original loan amount, or
3. Something else.

Currently assuming 1) but not at all certain...

@Diana Muresan on this one is cash out (current LTV is about 50%), it's an SFR in northern VA

@Diana Muresan I've seen on a conventional 15yr between 3.750 and 4.325 no points, LTV post refi between 65-70%. Have not tested 30yr yet.

Great thanks for all the responses. Wonder if the risk to the lender is that much higher, or if it’s just the way it’s always been done. Welcome any thoughts.

@Eric Veronica are there any particular key variables that help close the rate gap e.g. large portfolio etc. ?

I asked a broker to quote a refi for one of my properties both as a rental and as a primary, to see what gives. The only difference was the interest rate on the rental was 62.5bps higher. I was anticipating a higher rate but was caught by surprise by the spread, which I guess implies a considerably higher risk...

I understand during bad times an owner will walk away from a rental property before a home. On the other hand a rental offers additional income (not guaranteed, of course). 

Curious if there're better ways to go about this. Are there specialized lenders for investors out there? Would presenting the lease agreement help out? Market stats re dom?