All Forum Posts by: Lauren C.

@Dave Foster Thank you very much for that explanation. It would be impossible to guarantee closing on all of those properties, I guess that's the risk. 

What happens if I find a total of 3M in assets to purchase (4+ properties) per the 200% rule, and then I still have some money left over - is that automatic boot? 

Hey everyone,

I am considering my first 1031 exchange. PP was 900K, value now 1.5M. After everything is paid related to the sale, including mortgage pay-off, I think I have about 700K to spend. Both the relinquished and replacement properties are STR.

I'm looking at markets with purchase prices that are substantially lower than the one in which I am selling. I cannot purchase three properties without significant cash remaining. If I buy more than 3  properties, at 20% down, considering the 200% rule, it seems that I need to have 3M in value. It appears that there could be some $ left over. 

Question: Regarding the 200% rule, does that mean that the purchase price total of say, 4 properties, must equal no more than 3M, and I could employ an improvement exchange to make sure there's no remaining funds? Or, does the 3M include the funds for purchase+renovation and I'll be left with taxable $?

I refuse to "over-pay" for STR properties just because I want to avoid a taxable event, and I'm trying to scale my business without purchasing at the top of the market.

Thanks!

@Derek Idstein Did you find that people were going above asking + appraisal gaps etc. to grab properties there? 

Is it possible to BRRRR an STR using FNMA loan?

Have not seen anyone mention that they were able to do this due to issues w/FNMA counting projected income from STR instead of seeing a long-term lease in place prior to initiating the refinance process. (There are private lenders that do this, but this question is strictly referring to FNMA.) Also, I know that this is fine for a purchase (depending on whether the lender is familiar w/ underwriting using STR projected income when it is customary in the market) but this question is for refinancing.

It would be a BRRRR without the RENT prior to REFINANCE part.

Thanks very much.

Terri Wyzkoski I should have mentioned that the lender for both properties is a private lender that only does purchase and refinance (including cash-out), and it's a loan product that is specific to income producing short-term rental investment properties only (no primary/second home stuff)...however, there is a 5-year prepayment penalty. Otherwise, I'd have gone with that. But I'm going to message you privately.

Hello all,

I've been searching for the answer to this problem for a while, but I can't find anything definitive. I know I'm not the only one with this issue, so I hope some of you have some good information for us!

I have one rental property (and another in contract) that are owned by separate LLCs. It is for liability reasons. They are STR in the smokies. I have commercial loans based on DSCR. My husband and I are the only members of the LLCs.

That market is RAPIDLY appreciating, to the extent that the property I closed on in April is absolutely worth more now. And I'm doing some value-add improvements on the home in contract, including a kitchen remodel.

I want to get LOC on both homes in early 2022 to fund the next purchase(s)...let's just say the market either continues to appreciate, or stays stagnant at the very least.

****How do I get the equity out???****

The first lien on each property is not in my name, so I'd assume the LOC wouldn't be in my name, either. Is this just a commercial equity line of credit situation? And, if so, does ANYONE have any lenders that can do this? They would be able to see that they are income-producing properties, since I will have filed my tax returns at that point.

TIA!!!!

Here's a fascinating tale:

In 2009, Iceland had a spectacular financial meltdown leading to economic disaster, thought to be caused by over-zealous male bankers. The notion that men are aggressive (and sometimes irresponsible) risk-takers has been bolstered by a plethora of evidence, including one study that concluded that rising levels of testosterone in men turns risk-taking into addictive behavior.

After the banks collapsed, the women took over, and they saved the industry.

Prominent financier Halla Tomastir said their success stemmed from the following "Core Feminine Values": 

1. Risk Awareness: they don't invest in things they don't understand; 

2. Profit with principles: seeking not just economic profit but also a positive social and environmental impact; 

3. Emotional capital: when they invest, they perform emotional due diligence - looking at whether the culture/people with whom they partner is/are an asset or liability - "When you invest only money, not much happens."; 

4. Straight talking.

I don't know if it's accurate to call these "feminine" principles per se, but certainly, these tenets, with respect to real estate investing, are what's up.

@Candace Pfab Excellent! Will talk soon.

@Derrick Dill We actually did pay off the remaining balance on our car for this reason (it wasn't a lot anyway). So it seems I can only tinker with the I and not the D in DTI.

Hi everyone,

Seems like I might be stuck, but maybe someone has an idea here.

I bought one STR property in Sevierville TN just last month and will being searching for another soon. I used Visio Lending so that I could avoid the intense competition for cabins adhering to conforming limit; so instead of 2nd home loan, I put 20% down on a 900K (FYI no bidding war!) and I'll do the same for the second one...(Visio is great, highly recommend).

I'm going to pull equity out of my primary to pay for most of the next cabin, so my DTI will increase. DTI will not be affected by my Visio loans because they are asset-based loans in LLC name.

Then, I want to head to Gulf Shores, AL (or Blue Ridge, GA) because there seems to be less competition in the conforming loan range...will take advantage of 10% down 2nd home loan w/ conventional lender. 

But, I won't qualify for the full 548,250 since DTI increased due to the increased monthly payment on my primary. (Husband has W2, I quit my job to invest full-time). I want the most gross return from each property, since a less expensive one is the same amount of work, so I want the max loan per Fannie Mae guidelines.

Question: Is there ANY WAY around the fact that I haven't filed Schedule E for the two properties I purchase in 2021, and, because they are STR, have no lease agreements? I want a 2nd home loan, not investment loan, so I can't use projected rent on the subject property. I'd hate to wait until next year until the income from my Smokies cabins count towards DTI.

Thanks. I know others have similar issues with the STR income, too.

@Account Closed I used Visio for purchase of a cabin in Sevierville TN, and I think they do refinancing as well. For purchase, it was 20% down, 6% interest on 720K loan based entirely on projected STR income. Very smooth process. Highly recommend.