All Forum Posts by: Justin Melton

thanks for the reply!  If you get a heloc on your primary  home (plenty of equity there) do you have to meet dti requirements or can the str income qualify for the loan?  Thanks in advance! 

Quote from @Billy Sutton:

Hey, sounds like you’ve got a great setup already — love that your daughters help with the cleaning too. We self-manage our short-term rentals as well and totally get how important it is to really know your market (especially when platforms like AirDNA and Rabbu throw out numbers that feel way off).

If you’re confident in that $25k–$35k range, that kind of cash flow on a $120k property is solid — especially in a stable market near a university and hospital.

As for low down payment options, here are a few thoughts:

1. DSCR Lenders – Some DSCR lenders offer 10% down, especially if you've got a good deal and strong projected cash flow. You may pay a slightly higher rate or need to show some reserves, but it could work. Worth calling around to a few and seeing who plays ball with small-town properties.

2. HELOC on Another Property – If you've got equity in your current STR or primary home, a HELOC could be your bridge for the down payment without having to go in with a partner or pull from savings.

3. Local Banks or Credit Unions – We’ve found local lenders near our rural properties are often more flexible than the big banks — and sometimes more comfortable lending on “non-traditional” vacation areas if you can show cash flow and solid management history.

4. Seller Financing – Long shot, but if this property has been sitting or the seller is open to creative terms, you might get in with less money upfront if they’re willing to carry a note.

5. Partnership or Co-Buy – Not always ideal, but if there's someone you trust who's interested in passive income, you could offer a JV deal where they bring the down payment and you handle all operations.

Bottom line — I’d say if it cash flows and you know the area well, it’s worth pursuing even if you have to get creative. Especially since you already have the systems in place and can hit the ground running.

Let me know what direction you end up going — always curious to hear how folks make deal #2 work!

Can second home be dscr? I assume not….

We own one str in the Midwest (small college town) and it has done very well.  We actually purchased it for a place for my parents to stay occasionally but they are going to purchase something else.  Anyway, we are wondering about buying #2.  There is a house for sale in the same market that is for sale for about $120k.   AirDNA says $40k.  Rabbu says $17k.  Knowing the market Im confidently saying conservatively $25k and optimistic would be $35k annual revenue.  We self managed and my teenage daughters clean it.  It is proximate to a university and hospital.    

We aren’t flush wish cash right now for a down payment.  We could probably swing 10%. Any advice on down payment options with low down payment?  Thanks in advance!  

We had 46 stays so we collected $4600 in cleaning fees but cleaned it ourselves.  If we hire this out to be cleaned then we would have to subtract this from our profit.  If I annualized this and would have paid someone to clean we would be looking at $10k annually in profit.  

We purchase a property March 2024.  We started Airbnb April 2024.  My parents live out of state and the purpose was to give them a place to stay for an extended period of time and we will Airbnb it when they aren’t here to pay for the property.  They stayed about 2 months in 2024.

We self manage and clean the property ourselves for the most part.  We charge a cleaning fee of $100.  Our avg monthly expenses with reserves is around $1500 (mortgage, taxes, insurance, utilities, reserves ect).  Our average monthly revenue is $2,675.

We have had 46 stays so, $4,600 in cleaning fees (the cleaning fees are included in the avg $2,675 monthly revenue) If we have someone clean it, it costs $100.  

My parents have their home for sale and are considering moving into this property if they sell their home and paying us rent. However, I feel like the revenue has been great even though we bought it "for them" it could be a great long term play by keeping it and having them live elsewhere. I also am considering buying another one but we don't have the down payment. We currently have a DSCR loan on this property and paid $180k for it.

Can I get your opinion on what to do and thoughts on our revenue?

Our guests are a mixture of workers in town to those visiting university for homecoming/graduation ect.

My wife and I have owned an Airbnb since early March and are doing pretty well so far. We are in a small Midwest college town (MAC school) of about 60k people.  

We pay about $1700 for mortgage, insurance, utilities ect.   April was our first month and we did $2498 (our cut after airbnb fee).  May was $4200 because we had one 7 night and a 15 night stay!!  The month of June my parents stayed in the property from out of state (the whole reason we bought it)  July was $2200 (only 3 weeks mom and were here first week of July).  

So far in August we have $1800 booked (first 2 weekends) then a week stay from Wed-Wed The 21st-31st are current not booked. What is the best strategy to book these 10 days and longer stays like 7-14 days?  I have been offering weekly discount but thought of doing a special with a minimum stay for those dates.  Thoughts?  Our other long stays have been people in town for work (one was a staffing company manager and one worked on windmills) thanks in advance!

I just had a guest check in and the ceiling fan blade (less than a month old) fell off and hit him in the head (no injuries or anything) but they would like me to come take a look at it.  I live close and that’s not a problem but any advice on n how to handle it?  

Quote from @Michael Baum:

Hmm, Proper and others have pool liability coverage that is specialized for STRs. Like the dock liability insurance which is specialized for waterfront properties. At least that is what I have found in my research.

I am by no means an expert on insurance. I am just someone who would be willing to pay an extra $100 a year to not worry about a specific issue if offered.

I will work to find out more. 

I think that is kind of puffery.  They are charging you maybe a separate charge if you have one but I just don’t buy there is a “special” or “extra” liability because you have a pool. Same with a dock.  Just because you don’t see a specific charge for it doesn’t mean it’s excluded.
Some companies may have guidelines that they won’t insure STR if they have a pool but if you disclose it and it’s not excluded-it should be covered on the general liability.  Just my .02 and once again police’s do vary from company to company so obviously do your due diligence! 

Quote from @Michael Baum:

I have been working on a post about insurance and it is very complicated.

Proper is very expensive but it is very comprehensive. That doesn't mean it is better than others depending on your needs.

So, I recommend getting a full quote from Proper. Then use it as a baseline of the best coverage then check everything against it.

You want solid replacement coverage. We are at $400 per sqft to rebuild. You would want cash replacement for downtime due to damage. We have up to 50k in replacement revenue for downtime.

If you have a pool, you want that specialty coverage of course. If you are on a lake, you want coverage for that (we are and do). We added dock coverage even though we don't have a dock.

Other things to think about is coverage away from the house. We have that kind of liability for the time people are out and about. I figure that if I recommend something, like a boat rental or digging for garnets, that a slick lawyer could come back around and sue if something happened while doing that experience.

There is a ton more to go over but a good agent can help. Also, don't forget to look at all insurers. Many companies are offering STR coverage.

I will also say don't listing to a single person who tells you AirBNB and VRBO 1m dollar guarantee is insurance. It isn't. It has value but you don't want to rely on it for anything more than fixing stuff the guest broke or snagged. It isn't insurance.

 I’m an insurance agent and not sure about “special coverage for a pool.”  You need to disclose that you have a pool obviously but not sure there is separate or specific coverage for that, same with the dock.  

With general liability you have exclusions.  If not excluded, then it’s generally covered.  That’s where proper I think gets many clients is they specify things that actually don’t need specified. If you had a $1,000,000 General liability policy with a $500,000 sub limit for a pool for example, this is to your disadvantage-not advantage.  

All this being said, insurance contracts are complicated and I’m by no means an attorney, just giving my .02.  

We recently got 2 weeks of bookings for executives from a staffing company in our area.  It’s nice to have a couple weeks booked per month.  In my small city (70,000 or so) we have a university with about 20,000 students with a nursing school, hospital, and obviously several mid size employers that I’m sure have people travel into this area for business purposes.  

Initially we thought weekends for football games, homecoming, graduation and ect would be our clientele but  I’m liking the idea of weekly stays from these types of guests.  

Pair that with maybe professors, traveling nurses (they would be longer than a week) or other corporate business I think I’ve found a niche here.  

We have 3 bed /2 bath condo that is modern with nice appliances.

Besides putting it on Airbnb and letting bookings roll in, how can I reach out to promote this property?