All Forum Posts by: Keetaek Hong

@Mick Hofmann that's so interesting. I imagined Sedona would be more amenable to STR given that it's a touristy destination. Not the case eh?

@Kevin Romines - Wow thanks so much for the education! I surely didn't know that potential LTR income could be counted towards income. I may be stating the obvious, but I am guessing this is strictly an investment loan (not a vacation home loan). Also, does it matter if I have an experience in rental management or not? (just like how DSCR looks at your prior experience).

@Brandon Beardt - Out of those numerous creative financing options, are there a few that majority of investors rely on? 

Would both of you say that the lenders who would consider these investment loans are a relatively different set of lenders who often deals with primary residential loans? 

Hi BiggerPocket gurus!

I have a noob question that I couldn't wrap my head around. How do you finance multiple single-family homes for short-term rental purposes as a single investor without hitting DTI limit??

Hypothetically, if I have $1M in the bank, and say that I want to buy five(5) $1M houses with 20% down. The lenders wouldn't consider my rental income. If so, to meet the typical 36% LTI, then.. my monthly income should be somewhere around 75K (900K annual). (see the math below)

Are there any creative ways to finance the houses? Is DSCR even an option for short-term-rentals?

Thanks SO MUCH in advance! 

* How did I derive $75K monthly income requirement?

- Monthly mortgage for 5 houses: Roughly $25K

- Loan-to-Income at 35% = 25K * (100/35 ) = ~ $75K/month = $900K/year

@Bruce Woodruff that is inspiring :) 

My inclination towards those cities has more to do with maintenance/operation. It may not incur the best cash on cash with competitions, but at least there would be bountiful contractors and cleaners that I can mobilize. As I am an out-of-state investor, automating that is essential for me. 

@scott 

@Scott E. In all fairness, does AirDNA factor in future booking dates? I believe the data is driven by past bookings. Hence it doesn't quite reflect the shift in the market? no? Keep me honest! 

Hi BP! I could use some help narrowing down the STR market to invest!

How's the Prescott? Sedona? Flagstaff as an STR investment? We are hoping to expand our footprint from Scottsdale to somewhere outside.

1) Cash on cash? Are the houses too appreciated to see a good cash flow? Is the recent small market correction help at all?

2) Seasonality? Are those places suffer from seasonality a lot? 

3) Regulations? What's the city/county ordinances per STR look like? Are they in favor? against?

4) Demographic? I can see Sedona being an international attraction. How do Prescott and Flagstaff do? Do they attract good traffic? 

Any insights would be MUCH appreciated! 

Assuming I can be disciplined around making a periodic lump-sum principal payment, would this still be a concern? (Assuming there is no pre-payment) 

We are looking to acquire a Short-Term-Rental in AZ. From one of the lenders, we are seeing a favorable rate using ARM 7/6 IO-only (30yr amortization) option.

If I am willing to make a periodical lump sum payment during the high season of the rental, is there any downside to going IO-only option? 

I am looking to form an LLC with my family to pool the seed investment for a multifamily. (Seattle WA). Also looking for a real-estate-focused CPA who could help us with a tax strategy. Any recommendations??