All Forum Posts by: Kristy Farmer

@Alberto Vazquez: Galveston is great. I’m next to the pleasure pier and beach but also close to a lot of attractions downtown. The west end of the island would be for beach rental properties and more seasonal. I had a really good December. I was surprised how many bookings I ended up with during the end.

@Andrew Postell:  I'll try to keep this brief as it is a little more involved.

1).  Loans:  Both commercial and/or residential options may apply.  I have looked at commercial mixed use properties as well as single family residences.  Likely all ugly ducklings on the market need some work so I like to put a lower down payment on a residential property and do the work with my money.

2).  Loss and taxes:  The loss was associated with a sale of a condo and write-offs.

The new taxes will be filed and refunded by February 15th. I've already done my book-keeping and will file asap. I asked to not take all deductions and my CPA said it would be fine - this is what I referred to as FIXED. I essentially won't write off the rehab or set up of the short-term rental (STR). I converted my upstairs unit in 2018 from a LTR. I actually decided to take my primary occupied residence unit downstairs and get it ready for STR this season. My other property was sitting on the market and didn't sell after my tenant moved out of it in February of this year. I will be renting it to a family member in January 2020 so the new lease will be signed. I currently live here in this property shopping for a new property to owner occupy in 2020 when she comes to occupy this investment property. I may be back in my primary residence unit (duplex as a STR in both units) and block out time in January and February if necessary. I have not changed my address for this as my primary. I am currently doing a streamlined finance on this property with an associated mortgage company, which will remove the FHA and PMI permanently and lower my payment another $150. I purchased it in 2017 and it's appreciated as well as the rehab I did in those two years. The income from this property will offset the loss on my other investment property so as to not show a loss again on this years taxes in 2019, yet to be filed. I hope this helps, and I realize it's totally convoluted. I do not want to do FHA again as I feel I will qualify for a conventional loan and it will automatically streamline or put 20% down.

Is there any way to count a room in a 4/2 house towards DTI on a future purchase? I'm sure I already know the answer to this question and I'm going to owner occupy one room and rent 3 out LTR. My DTI ratio is high based on my recent discussions with a mortgage lender for a refinance on my duplex under a FHA loan that I lived in for 2 years and has been converted to a STR in both units. Unfortunately, I can only fix one year to show income - this one. I now have a $19k loss from 2018 taxes reported. I can fix this year and show actual income to assist in my qualifying. I am trying to not go commercial. The DSCR would work for this property contingent upon inspection and appraisal...old house so I could put 25% down and go commercial. Are there any other hints for this process other than speaking to local banks and credit unions? I'm working on that one but also trying to educate myself for future. I had no idea deductions on taxes would hamper me so much. I thought I was doing a good thing with write-offs. Excellent credit so that's not an issue at all. It's in the high 700s.

@Belinda Lopez: I also have a POC at the GLO that may be able to put you in touch with the right people at the GLO and the new boundaries after IKE. I believe it’s associated with the new dune line on state lands on the gulf side.

@Belinda Lopez: I know that was quick. There’s a ton of misinformation in this post so please contact me. Ownership and wetlands determinations are completely different. Just because something is a wetland doesn’t mean it cannot be built upon, just that there are permits required. If this parcel is out west Galveston it’s subject to City of Galveston wetlands regulations as well as at the federal level. I’m back Wednesday next week. Realtors are typically clueless.

@Belinda Lopez: I’m out of state right now but contact me next week when I’m back at work. I’m in Regulatory and deal with this work.

@Christina Johnson my house is farther away from the Seawall and doesn’t make sense as a vacation rental. I’m getting someone who loves the space and wants to rent. I know it’s going to be taken care of and meets her needs as an artist.

I did find a mortgage company and they are wonderful! They’re looking into my duplex for refinance. I’m leaving the other one alone and borrowing from the equity if needed.

I’m self managing my vacation rentals for the time being. Which company do you work for?

I’d love to connect and chat with you sometime.

I’m having my mentor look for the next property.

It’s looking better now! Thanks for your input.

@Nathan G. It's worth looking into. The STR market is pretty good. It seems like booking.com is a good site to see what money comes in on rentals.

@Nathan G. What part of Panama? I’m familiar with most of Panama as my boyfriend at the time and I drove from Panama City to Bocas del Toro. If you go in front of the proposed road on the pacific side it’ll be cheaper land. It’ll be more expensive on the Caribbean side but I fell in love with that area. The Bocas town was not where I’d go. It was rough. The 16 islands are close by water taxi and I loved isla bastimentos.

Fellow Real Estate Investors-

I really need help at the best use of my money, equity, and future real estate investing goals. I have a full-time job and financing shouldn’t be an issue. I also have a great to excellent credit score.

Here's the scenario and my goals:

This year I listed a rental property (previous primary residence) house for sale in Galveston, Texas 77551 and it didn't sell, Property 1 below. I've decided to keep it and rent it. My tenant will be renting this house in January of 2020 for a one year lease of $1,700/month. I am currently living in this property until I find the next house-hacking opportunity this fall. I can always go back to my duplex that’s a vacation rental in the off-season if necessary. I am looking for good deals on Galveston Island this fall and winter.

My initial goals were the following:

Property 1 (LTR). To refinance into a 30 year note for a small amount of cash flow. This property has 3 policies: homeowners, windstorm, and flood. It's in an AE zone on the new FEMA maps.

I also wanted to refinance solely to remove escrow. It's had 20% equity for a while now, but the servicing company has been a huge pain to deal with and now that I kicked a couple of payments down the road when I asked for the 3 months due to Hurricane Harvey, they have stated I MUST escrow for the life of the loan.

The mortgage is roughly $140K and it's appraised on the county tax rolls for around $215K, which is what I believe it would also appraise for with appreciation and some minor updates that I've done over the years, perhaps a bit more, $225k.

Property #2 (now a STR – 2 units). Galveston, 77550 (I obtained this property as a primary residence under an FHA in late 2017): I tried to find options for a refinance on this duplex that is under an FHA loan. I've converted both units into short term vacation rental units. It's been rehabilitated a lot and more improvements to it. With what I've put into it in the last two years it should have no problem being evaluated at 20% now of equity. I roughly think it would be worth around the $330 to $340 k range, possibly valuated at $350k. I have an Airbnb income statement that I can provide. This STR is new and is self-supporting. The upstairs unit is 1 year old and the downstairs unit was available in August this year.

Now that I've done some research, there appears to be a lot of money involved in the refinances and I don't have enough equity to make it worthwhile. My intentions were to reutilize the FHA loan at 3.5%. Now, I'm thinking of taking a LOC on the first property or borrowing from my 401k for a 20% down payment. I need a place to live this year and it needs to be a 2 bedroom. I have a roommate that pays me rent that will be coming with me. He's my partner and working for me on this house-hacking hop. Any advice would be appreciated.

Thanks,

Kristy