All Forum Posts by: Michael Porche

Hey @Alex Persons! So Fox Lake is a pretty small market. I believe there is something like 30 or so rentals in that market. Doesn't mean its bad or good by any means but it may be riskier for that very reason. Seems like total revenue could be anywhere from 40k to 80k on average depending on the property. Seems like a very seasonal market with the high times during summer of course vs a slow down during the winter.

1. I am not investing there but I see some people who are from there being rentals
2. I'd recommend try managing it yourself if it's your first one. You'll learn a lot if you do
3. I'd say that is too much of a general question. They don't differ much from other areas besides accounting for snow removal and weather considerations that come with weather changes
4. Things I'd consider when investing in IL is really just being more clear on what your goals are. and work from your goals instead. After that, talk to the city planning and zoning. You get a lot of information from there. Ask yourself the question of what kind of landlord and tenant laws they have so you know the risk before going into it.

Hope that was helpful Alex

What up @Trent Reeve! Decent question for sure, but my question is why would you ask 'What are first timer investors looking for...?'. Wouldn't you rather know where experienced investors are looking to invest in? There are different strategies to utilize in every market we dive into. Sometimes LTR is best, sometimes STR is best, Some times section 8 is best. It all depends. But the best thing to realize is that you want to be in a position where you are utilizing the right strategy for the right circumstance.

Hey @Kevin Olson, there are a few options on what you can do. You can start off looking into a 2nd home loan. Try for a 10% down loan. The other option is you can investigate if it has any type of value added to the property. Maybe get a hard money type loan to add value and refinance out of it as to 1. take advantage of the lower down payment and 2. if its true value to be added (maybe sqft) then maybe you can even get a portion of your funds back. Both ways have different requirements.

Hey @Caleb Stevens! I sent you over a message... but to answer your question. This is definitely a hot topic.

1. For my new investments. Yes, I have found them to be good deals so far. We just refinanced on one with very high-interest rates which was a very hard pill to swallow, but there is room on the bone still for projections and people are still traveling. We have seen a slight slow down in bookings and occupancies which lower projections but that still doesn't cause me for concern.
2. For long-term STR host, I think the same still applies. In fact, they are typically positioned better than others due to having lower interest rates and having recovered some of their upfront costs.

Now the interest rates aren't as much of a concern due to you being able to calculate them into the deal. You can analyze a property with high-interest rates and if it still cash flows with great numbers, then grab it! because it's going to do even better if interest rates go down. Also if we are heading into a recession which should be official here in the next 1-2 months I believe (going by the definition of having the GDP falling for 2 consecutive quarters.) history tells us that interest rates will be lowered as to combat recession. Happens every one. Now to address higher gas costs and inflation. Those contributors definitely affect the travel industry. To what degree this year.. I don't know. The good thing is we can look at data going back quite a few years in certain markets and see how it affected each of those markets during a recession and even better, during a pandemic like Covid. That has given me a lot of confidence to continue to invest in STR's in certain locations because I can see the data before investing and I can plan accordingly. I hope that helps

@Cody Smith I would probably do what you are doing. But before I did, I would look to see how much more funds I would be getting by buying this property on the emerald coast. I would put it through my STR Analyzer, which considers every cost. do the comps of the property I am buying to get as a detailed revenue projection I can. Then see if it's worth it. I would want to be making double minimum before I would say yes. Maybe more since it would be from an LTR to STR... so maybe 3X as much as a minimum.

@Taylor King So it technically and definitely would be a fraud. However, I would talk to more lenders than just the one you are talking to. I have seen lenders able to do less down than 10% on 2nd home loans. Just depends on the product and who is underwriting/insuring the loan. The more people you talk to the better. But if you want to be committed to the less down payment, get it as your primary, and move there for a time being. If it's something you like, you stay? If it's not what you like, then leave. and you get the benefits of the loan  This is not legal advice btw

@Rose I. So that is a loaded question and you definitely have options. We operate our rentals the way you are hoping to build them out. I'd recommend talking to a specific CPA real estate investor who does stuff like this as for your guidance. I have a connection if you'd like. I say this because every situation is different and needs more specific answers to get a concise solution

Whats up @Cody Dastrup. 1st of all, congratulations on your work thus far! Awesome accomplishments. So there is a few things to consider here you need to be careful of.

1. Your single-family residence of 4/2 is not a commercial property. So your "permit" or added income doesn't provide actual appreciation value. The reason why is because appraisers work on a comparable sell model for ALL residential homes (1-4 units), not an income/caprate model like with commercial properties.
2. However, that doesn't mean someone will pay more for it because it has an STR Permit. Someone might seem more valuable because of that but if they use a loan that still depends on the lender and appraiser, and they don't take into consideration income or permit in its value.
3. Trailers are hard to get financing for. you have to find a mobile home financing entity or something like that. You should offer if the seller is willing to carry the note on the property.

Great question man, I just got the same rate as well. These are common practices as of today. Of course, there are other ways of finding ownership or lending but in regards to a typical interest rate for an investment property... yes

Yo @Kimble Miller! You can do whatever you want. lol. If you already bought the house and own it. As long as there are no restrictions prohibiting you from renting it out as a short-term rental then you should have no issues there. And what 'can' vs what you 'should' be doing is probably a large list of things but it all depends on your specific circumstance.