All Forum Posts by: Jayson Cain

@Chris Thomas - I've been both a lender and an investor and here are the basic steps you can follow:

1. Find a Hard Money Lender: Start by identifying reputable hard money lenders who specialize in financing rehab projects. They will assess the property's value based on its after-repair value (ARV) and lend you a percentage of that value to fund the purchase and renovation.
2. Secure the Hard Money Loan: Once you've found a suitable property, submit your application to the hard money lender and provide the necessary documentation, such as the property details, rehab plans, and your financial information. If approved, you'll receive the funds to purchase the property and begin the renovations.
3. Complete the Rehab: Use the hard money loan to finance the property purchase and carry out the necessary renovations. Ensure that you stick to your budget and timeline to maximize your returns.
4. Get a New Appraisal: Once the rehab is complete, hire an appraiser to assess the property's value based on its improved condition. This appraisal will be crucial when transitioning from the hard money loan to the DSCR loan.
5. Apply for a DSCR Loan: Contact lenders who offer DSCR loans and provide them with the updated property appraisal, your financial information, and any other required documentation. They will assess the property's income-generating potential, such as rental income or projected cash flow, to determine your eligibility for the DSCR loan.
6. Convert to DSCR Loan: If approved, the DSCR loan will replace the hard money loan. This type of loan considers the property's income potential and cash flow to determine the loan amount and interest rate. It allows you to secure long-term financing with potentially better terms and lower interest rates.

Remember, each lender may have different requirements and processes, so it's essential to research and compare multiple lenders to find the best fit for your needs.

Reach out if you have any additional questions from the steps above. :)

@Sam Wilson - When it comes to financing your next deal, there are a few options you could consider. Here are some ideas:

1. Refinance one or more of your current properties: Since you have a significant amount of equity in Property 1 and Property 2, you could consider refinancing one or both of these properties to free up some cash. This could potentially improve your debt-to-income ratio (DTI) and help you qualify for a loan for your next project.
2. Consider a cash-out refinance: Another option would be to do a cash-out refinance on one or more of your properties. This would allow you to pull out some equity as cash, which you could then use for your next project. Keep in mind that this would increase your debt, and therefore your DTI, so you'll need to make sure you can still qualify for a loan.
3. Look into alternative lending options: If traditional bank financing isn't an option, you could consider alternative lending options such as hard money loans or private money lenders. These types of loans typically have higher interest rates and fees, but they may be more flexible when it comes to DTI and other underwriting requirements.
4. Partner with someone: If you're struggling to qualify for a loan on your own, you could consider partnering with someone who has stronger financials. This could be someone who could co-sign on a loan with you, or someone who could invest in your project and provide some of the financing.

In terms of moving into a new primary home to house hack, you'll want to make sure you're taking into account the costs of this move and how it will impact your DTI. You may need to wait until you've completed your current project before taking on a new primary residence.

Personally, I like using DSCR loans for my own investments and have recommended them to my clients as well. Using DSCR loans can be a good option to bypass the DTI requirement. It's a way for lenders to look at the income of the property itself rather than the borrower's income. This means that if the property can generate enough income to cover its debt service, the lender may be willing to overlook the borrower's high DTI ratio.

I hope this helps give you some ideas for how to structure your resources and move forward with your real estate investing goals.

Congratulations on your new property! It sounds like you're taking the right approach by considering the comfort of your guests, especially families with children. In my experience, providing comfortable sleeping arrangements for families is key to attracting and retaining guests in a vacation rental.

Regarding your question, I would recommend considering the space constraints of the room before adding a twin bunk bed. If it will make the room feel cramped and uncomfortable, it may not be the best option. A trundle bed, on the other hand, could be a great alternative as it provides an additional bed without taking up too much space.

It's also worth considering the demographics of your potential guests. If families with multiple children are your target market, having a twin bunk bed may be more appealing to them. However, if you're also targeting couples or smaller families, a trundle bed may be a better fit.

Ultimately, the decision depends on your personal preferences, the space available, and the preferences of your target market. I hope this helps you make the best decision for your property.

 +1 for Jeremy 

When analyzing vacation properties, it's important to look at a variety of factors to determine the potential rental income. While looking at comps on platforms like Airbnb and VRBO can give you a good idea of what similar properties in the area are charging, it's also important to consider the seasonality of the area and the demand for vacation rentals during certain times of the year.

In terms of estimating rental income, I typically look at both daily rates and monthly rates to get a better understanding of the potential earnings. If you're using the Rent Estimator on BiggerPockets, I would suggest using the monthly rent estimate as a starting point, and then adjusting it based on the average nightly rate you expect to charge and the number of days you anticipate the property will be rented out each month.

Another helpful resource for estimating rental income is Airdna.co. This platform provides detailed data on Airbnb rental trends and revenue for specific areas, which can be very helpful when analyzing the potential earnings of a vacation rental property.

I hope this helps!

Hey Laura! Based on my experience managing my own short-term rental properties, here are my recommendations:

1. 1. Yes, I highly recommend having a contract in place, even for just one listing. This helps protect both you and the property owner in case of any issues.
2. 2. As a property manager, you typically get paid monthly by the property owner. Payment method can vary, but it's important to have a clear understanding of how and when you'll be paid. Personally, I prefer to receive payment via direct deposit.
3. 3. Yes, as a property manager, you would typically collect your fee based on the total amount of nights booked by guests. If you offer weekly or monthly discounts, you'll need to adjust your fee accordingly.
4. 4. In my experience, the property owner is responsible for paying the cleaners. However, you can certainly handle this for them if they prefer. Just make sure it's clear who is responsible for payment.
5. 5. Yes, it's typical for property managers to recommend outside vendors for services like snow plowing and mowing. This helps ensure that the property is well-maintained without adding additional responsibilities for the property manager.
6. 6. When setting up the listing on Airbnb, you'll want to use the property owner's name as the host. As the property manager, you would be listed as the co-host. This helps avoid any confusion for guests.

I hope this helps! If you have any further questions, feel free to ask. 

From what I understand, it's a fund that specializes in STRs. If that is the case, then it's probably a cashflow-type and the DSCR is high.

However, I think they buy residential 1-4 unit properties. If you're considering them, I would confirm how they do the valuation when they exit the fund. 

If it's being valued using comps (since they are 1-4 units) and not using NOI and cap rate like commercial properties, the return might not be there at the exit.

Hi @Greg R.,

I'm based in Southern California, but I have started my out-of-state real estate journey in Indianapolis. Now, I have a portfolio of Short Term Rentals and Long Term Rentals. I've started looking at Columbus because my business partners have found success doing Mid Term Rentals there and the returns are solid.

I've also helped other investors with their DSCR loans and flip projects in Columbus. Happy to share my experiences and chat with you more if you're interested.

Hi @Kristina Nguyen,

I'm based in Southern California, but I have started my out-of-state real estate journey in Indianapolis. Now, I have a portfolio of Short Term Rentals and Long Term Rentals. I've started looking at Columbus because my business partners have found success doing Mid Term Rentals there and the returns are solid.

I've also helped other investors with their DSCR loans and flip projects in Columbus. Happy to share my experiences and chat with you more if you're interested.

Hi @Isaac Yoshioka,
I'm based in Southern California, but I have started my out-of-state real estate journey in Indianapolis. Now, I have a portfolio of Short Term Rentals and Long Term Rentals. I've started looking at Columbus because my business partners have found success doing Mid Term Rentals there and the returns are solid.

I've also helped other investors with their DSCR loans and flip projects in Columbus. Happy to share my experiences and chat with you more if you're interested.