All Forum Posts by: Luke Stewart

Since the heloc is on a separate property it wont be tied to the new property in any way, so you are correct that you will have 20% in equity immediately upon closing. You will just have to pay back the HELOC. That being said, are you looking to add value to the property? You didn't mention if you're looking to increase value prior to refinancing, BRRR method. Assuming you are remodeling, the biggest hurdle you could hit is the ARV in todays market. With markets dropping you could get sandwiched between prices/rates today and prices/rates in 6 months after your rehab. Just something to be careful with.

End of the day, the equity required on refinancing will be up to the lender who is refinancing your property, if its an investment property they typically require 25%, but depending on your credit some lenders could require less. I am no expert in this topic but this is the way I understand it. 

This technically violates the STR laws in Denver, he cant live in the ADU, he must live in the primary and then can rent the ADU. By living in the ADU he forfits the right of the primary being his actual primary, which is required to operate a STR. He needs to be careful because he can get a hefty fine and lose his license.

I love this! Great work, I am looking to do this same type of thing in Denver and I am curious how it went getting the STR license in Denver? I was reading on BP the other day that new laws may be coming into effect on STR in Denver that will affect basement units for STR. One in particular was that you cant have doors or walls cutting off the primary to the basement unit/STR rental as that would change it from being part of the primary to a separate residence. I have not see actual updates to the laws but it was being discussed like it was going to happen. Do you maybe know more?

I think @Ryan Williams nailed it, the 1% rule doesnt work in Denver, but look at equity. I have multiple goals but one is to house hack a duplex in Denver and that means immediately that I will not be cash flowing or covering the entire monthly payment with the rent collected from the other unit. However I know that the equity gained each month is high and when I move out I should be able to get rents up to have a small cash flow. I think Denver is becoming a big 1031 market. You build up equity then move it into something nicer or with more doors. You just have to shift your mentality about it. If you are trying to replace income ASAP, then an expensive market can make that tricky without STR.

I will have to look into bank statement loans, I know DSCR loans but that's not quite the route I am going with this property d/t amount of down payment. If I cant get a second home loan until spring that could change haha. I have never heard of bank statement loans but thank you for the heads up, Ill be sure to look into them!

W2, but a fair amount of my wages is non-taxable income, not sure that matters. It seems to be the fact that I work 3 month contracts is to be risky since they cant guarantee future contracts and pay. 

I have hit a hiccup with using a second home loan to buy a condo. I am a travel nurse and have had 3 lenders deny me due to me working contracts and the inability to confirm future pay. I know there are other travel nurses out there and definitely other contract workers. Does anyone have a lender that does conventional loans that will write for contract workers?

I work full time, I do not take long breaks in-between contracts, I own my primary residence (great cash flow and rate, leaving this for later down the road), I have a credit score of 810, I have low 6 figures savings and same in retirement. I know there are lenders out there that will work with me, but so far I am striking out. I would love some tips!

@Cameron Brulotte this post is it! I am a travel nurse and I rent my place out aimed at travel nurses. I like the midterm because its less turnover, I have had nurses, people waiting for their homes to be remodeled or built, business people in town for an extended time. I have had them all be great. I love the midterm because I have found people to be more respectful, they aren't there to party but they leave sooner than a long term which allows for adequate repairs and maintenance to be done so things stay up to date. I aim at nurses because its what I know, and there is a chance they stay longer than 3 months, but I am about 50/50 on past renters being nurses.

That being said, Furnished Finder is great, I also use airbnb and vrbo. Just remember with FF you will have to create your own lease, its not like airbnb so no insurance or contracts unless you have them signed. If it is nurses, getting a husband and wife is always my favorite. Also, if you can do pet friendly that will help your cause! best of luck and welcome to the midterm game!

I love all the answers above and I think if you are looking to retire in 10 years then that has a big influence on it. If you are leaning towards selling it to get out of managing the property, I would suggest considering investing in the market right now. Everything is down considerably and even on a low rate of return you could make substantial gains over the next 10 years (using this as retirement). If you need the $1000 a month rent as income then renting isn't a bad option.. if not, you may find it more hands off and less stressful to go purchase index funds. Lets say you end up with $200,000 cash after the sale, and put that in a fund that generates 9% a year, in 10 years you have $473,472.74. It really just depends what you feel more comfortable with. You could rent it, make $12,000 a year cash flow and keep adding equity, if the market keeps appreciating you may end up with a net positive outcome 10 years down the road above the market. What I would NOT do is refinance it as your mortgage rate is excellent. You have lots of options, and none seem bad to me!

 Thats what I have been using for my place in Denver, furnished finder and Airbnb. It just seemed limited supply and expensive for whats left over. How has our midterm place done throughout the winter?