All Forum Posts by: Jeff Pullman

What are typical rates on commercial loans? It will essentially be a second h ome/investment vacation rental - mountain house that we use 20 days a year and rents for hopefully 150-200 days a year

Anyone have suggestions tactically for how I would go about getting a new loan (likely a construction loan) on a new property after recently closing on a vacation rental within the past year?

For the sake of illustrating the question, here are some hypothetical numbers

Need - 500k construction loan

Have - $15000 in monthly income and 6500 in debt payments (primary mortgage, vacation rental mortgage, car) - 43% debt to income ratio. 

New loan would make it something like 58% debt to income. 

The vacation rental is cashflow positive, has a 5 year record of gross rentals of $100k, and will cashflow positive this year. So not only does that offset the payment, but it actually adds income to the equation, but I am being told that until there are 2 full years of financial records on the house/business, all the debt counts but none of the income counts.

Are there strategies to get around this? Construction-to-perm loan servicers who are more creative in how they look at things?

Thank you for the helpful responses thusfar. Just to clarify a few things that I hadn't thought to mention:

1. The fixtures and wall coverings and flooring are already taken care of - nice tongue and groove, very nice hand-scraped floors, and lighting is covered

2. We're not big into expensive unique or authentic stuff - like animal skins, heads, or native american tapestries. We're totally fine with stuff that looks the part and is durable even if it may not be authentic bison hide or the wood of some rare hardwood tree. 

3. The main things I am thinking about here are large furniture - beds, sofas, tables, chairs. But I am sure there are things I am forgetting - having never done this before - but when I think about the expenses that's what is coming to mind.  

Anyone have a rough idea on what it would run to furnish a STR in a "Mountain Modern Lodge" style with durable, attractive, lodge/cabin style stuff.

Something like this...just did a quick search. https://www.willowcreekcabinre...

You know the look, though...natural wood, leather...browns. Something you'd expect to find at an upscale ski lodge out west or in Aspen. 

2500-3000 sqft, 4 bedrooms and a formal dining area. The "bonus" room is going to be set up as a game room so I am not considering the cost of a pool table in the overall budget. 

If anyone has any recommendations on specific designers or retailers (local or online) for this look that deliver a good value, please let me know. This would be in the Western NC/Eastern Tennessee Blue Ridge Mountains area

Hello, 

I am considering a short term rental - Single family home, mountain views, 3-5br, 1500-3000 sqft in the Banner Elk/Beech/Sugar area and have several questions that I am hoping the excellent resources on this forum can assist with. 

1) Thoughts on the relative strength of each area for STR potential

2) What demographic is the most common source of rentals in the area - i.e. single families, group vacationing, etc? 

3) We are familiar with beach (not beech) property in NC and have learned that there are certain sectors of the market that are easier to make money on (i.e. in Nags Head, it's really hard to make money on a $600k house...which is the low end of the market...but easier on a 2M house for a number of reasons. Is there a sector that is easiest or most difficult in this area - for example, if most vacationers are single families, I can see it being harder  to make money with a 6br home. 

4) Lots seem to be very affordable...is building a huge challenge? Obviously there are structural challenges with mountains, but I assume the builders here have it figured out. 

5) Does anyone have an idea what one could expect to spend to build per sqft, inclusive of all site prep?  If a 2000 sqft existing home was next to an empty lot, would one expect the final bill to come in more than or less than the existing home price? I wonder if the barrier to building is just not wanting to take on the headache/timeline.

6) Recommendations welcome for the following: Property managers, Builders, cleaners, handymen

7) For those of you renting in the area full time or close to it, what is a reasonable ratio of gross rents to purchase price that could be targeted in this market? Again, to compare to beach property, 10% is kind of the magic number...at 10% gross rents to purchase price, you can make money. Many of the deals out there now are more like 6-7% but you can find 10s and 11s. 

Sorry, this is pretty all over the place, but thanks for any and all help you can offer.