All Forum Posts by: Kyle Seidel

Thanks @Zachary Paschke! @Thomas Rutkowski Even if I took out a loan on my life insurance which strictly went to help finance my down payment on an investment property it's not tax deductible? I agree that using life insurance is a great tool to help get properties quicker- without this option I wouldn't be able to have done this until next year. Glad to see a fellow Packer fan- hoping to make it to one of their public practices here asap!

@Zachary Paschke Thanks for the reply! I did technically take a loan out  on my life insurance and am paying 8% interest on it. Sounds like I’ll be writing that interest off on my taxes!

Hello, I live in Green Bay full time and recently bought a short term vaca rental condo in Nashville where I have a property management company run it. For me to swing the down payment I took some money out of my life insurance. Am I able to write off that life insurance interest on taxes since it went directly to my down payment on a investment property that I don't occupy? Thanks!

@Benjamin Vail ThNks for that insight about Airbnb- that’s great to know! I’m having Turnkey manage my property and they have a permit specialist. 

That's true about if there are a whole lot of other STR's. What they built a couple years back doesn't seem to allow any STR's. What they just recently built allows STR's but I'm not sure how many will be doing that. One thing I didn't mention is it is a 2-story townhome which I think helps me. Also I'll be traveling there about a month overall per year so as long as the worst case scenario is breaking even I'll take it.

Yes I am! $3,500/mo to break even is daunting but I think I can get that and then some the warmer months but the colder months I’ll be probably losing money. 

I'll post on here with any updates if I end up getting this place just so other investors in my shoes see an example of what buying a new construction STR would look like numbers wise.

@Luke Carl All of my numbers I get to very conservatively. What my goal is is to have even the most conservative numbers make sense so that reality will make it better than expected. Keep in mind I do have to furnish everything and with 0 reviews off the bat I’ll need to price it lower than I would with more reviews. LOL nice comment at the end there. 

Do you have any other insight or raw numbers from the Nashville market?

@Luke Carl Alloy is actually complete. These first 8 months I'm assuming a loss with setting it up and pricing aggressively. Starting in 2020 I'm trying to see what my potential revenue could be. Needing $42k/yr of revenue just to break even is pretty intimidating but if this place generates say $50-60k/ yr and thus I profit say $5k-$15k/yr it'll be very worth it to me. I do think this area will grow with the MLS team coming close by next year

@John Underwood I would also love to start out smaller but this is basically the only option I have. There’s a couple small 1 bed options available at Endeavor for $260k but that would need to be a portfolio loan which would add an extra $400+/mo to the mortgage because of the higher interest rate. The permits and hoa’s are also pretty nuts around Nashville so I’d like to have that backup option for a LTR if needed but with a $2,250/mo mortgage and needing to pay some type of expenses and plus say 10% to a property management company I’d be losing money if I had to get a  LTR. 

I'm going to Nashville next week and am hoping to buy a short term vaca rental condo that Turnkey will manage (18% commission). It's called Alloy and is located at 374 Herron Dr. which is 3-4 miles south of both Music Row and DT. Purchase price is $370k and I'm conservatively estimating a $2,250/mo mortgage payment which includes everything. It's a new construction 2 bed 2 bath 1,300 sq ft and looks really nice. Nashville is getting a MLS team and they'll play 1 mile away starting next year. This is also conservative but I'm assuming my break-even will be $3,500/mo revenue. I should keep about 75% of every dollar after that. I've had multiple ppl within Turnkey say their minimum they'll take on is $2,500/mo. Any Pro Forma income statement I've seen seems outrageously high ($8k/mo revenue). Is it reasonable for me starting in 2020 (since 2019 I want to price it very aggressive to get ppl in and get good reviews generated) to get $4k/mo revenue and make $350ish/mo profit? I'd like some thoughts because needing $3,500/mo revenue just to break even is very intimidating, however, in a few years I could also be making so much above $3,500/mo in revenue that I'm kicking myself. What's a reasonable average revenue to expect monthly?

Feel free to chime in your thoughts and I’d love to hear all your numbers if you have a short term vaca rental in Nashville- thanks!

@John D. It is for a new purchase and it's most likely going to be new construction since there are only a few existing hoa's in Nashville who allow for short term rentals... Not sure if it'll be one freshly built or one that won't be fully built until end of this year or next year if that makes a difference.

@Parker Borofsky I just messaged you. What you are saying makes a whole lot more sense to me. For an investment property I don't yet own the appraiser should do a fair market rent schedule and use 75% of that number to be conservative as you're saying. The other lenders saying I'll get $0 income in the DTI ratio is just silly and makes no sense. If the worst case scenario is the appraiser using 75% of long term rental income (which would be an even lower/more conservative # than STR income) that's fine by me!

@John Oden That's awesome! Just curious as to what your commission structure is, how you get places booked, and what you all cover? What would I need to do on my own from out of state?

@Patricia Steiner Thanks for that info and I'll do that and post any options I find for this particular scenario which I think more and more people will find themselves in.

@Julie McCoy Thanks for bringing @Parker Borofsky to the show! Parker I need a lender who'll classify my short term rental income as income that can be counted towards my DTI ratio. It's bizarre how all lenders seem to classify this as $0. If you can somehow get it to pass underwriting as long term income without me having to get a lease signed and all of that that jazz that would be huge.

I've been thinking about the 1 year lease option and am very confused as to how it would work... Supposedly it's supposed to have a lease signed and sec. deposit/rent paid before close but how can I get a renter to do that before I close and even have keys to the place to show them? I'm not sure if the builders would give me a key and let me show that unit to a bunch of renters when I technically wouldn't even own it at that point?