All Forum Posts by: David Taylor

So my wife and I are reaching our saving's goal for our first STR investment property. We have around $25k saved up for initial money, and will soon have over $12k for emergency funds.

How are you dealing with fears (if you have them) of how the housing market is behaving? Obviously, inflation is at an all time high, inventory is low, prices continue to increase, and interest rates are rising. As a first time investor, I'm having difficulty trusting the market to correct itself through increased rate hikes by the Fed. If inflation continues to outpace wages, and housing prices continue to rise (and everyone ALWAYS wants more for their house, especially seeing how sellers made out over the past couple years) along with high interest rates - how will anyone be able to afford to buy a home or invest in the real estate market? 

The difference in monthly mortgage payments is significant when moving from 3% to 5.25%, and it looks like interest rates will continue to rise. 

This doesn't seem like it will end well. I don't know how we can avoid another recession, or perhaps more likely, a depression. And if that does happen, who will be able to afford to travel and book all these AirBnB?

Someone, tell me I'm crazy - and that my concerns are unfounded. My wife and I are in our mid-40's and desperately want to leave our regular W2's. But we certainly don't want to be forced to return to them with our tails tucked between our legs because the market fell out from beneath us.

That’s a really great idea - since we hope to have a diverse range of properties through various markets, having a core lender we can continue to return to seems like it would be less complicated logistically. 

Excellent insight, thanks! 

Very interesting! Thanks for the great information.  

Ah! Thanks! Much appreciated.  

Thanks for getting back to me. Just to clarify, a local lender in our home area, or a local lender in the rental property market? Or, are you saying any local lender versus a nation-wide lender? 
Thanks:)

Because the real estate market is so hot right now, we are looking in multiple markets for our first STR purchase - all of which are outside of our immediate area.

Do you see any issues with us using a local (to us) lender, someone in our home town, to work with for this purchase? I frequently hear the importance of using a local lender (local to the market you are buying in), but because we are looking in several areas, I'm thinking it may be easier logistically to interview several lenders nearer to us, rather than the actual property markets. We live in central Wisconsin, and there are several good banks/CUs in this area - but many of the vacation towns we are researching have fewer options.

Thoughts?

Thanks for the input! While I personally like the novelty of the tiny home STR option, I'm not sure I'm ready to go that route, yet. I don't really have a good reason behind it other than not being comfortable with it at this point.

We have considered (and will definitely keep the option open for) house hacking. But in order to really make the cash flow work, I think we'd need to have something like a quad-plex. This is simply because we don't currently pay rent or have a mortgage, so any money we'd be putting into a mortgage that isn't at least breaking even (with help from our renters) wouldn't help us move forward. At least how I understand the process.

Valid points, and I appreciate the honest feedback. I looked it up - it wouldn't affect my DTI, but there are several considerations I'd need to be sure that I'm comfortable with. The more I learn about real estate investing, it seems like it is a "better" investment than the stock market as far as retirement goes. So the money pulled from there to aid in our real estate investment may pay higher dividends than if left to Wall Street. That being said, and despite it not counting against my DTI, an additional payment each month (to repay the 401k loan) pulls more available money from our regular income. I need to determine whether or not moving faster (by pulling from the 401k) offers greater benefits than patience and continuing to simply save the money needed for the initial investment. Just typing out loud here - helps me think:D

Thanks again!

Good points. We do not currently own a home. In fact, this will be our first home purchase - so the HELOC isn't an option for us at this time. I do have an established 401k, and had not thought about the option of taking a loan out from that. Interesting idea. I've heard of that being done, but I don't know what it entails.
Wouldn't a loan from a retirement fund count against your credit score/DTI, when you went to get a mortgage?