All Forum Posts by: Michele S.

@Michele S. I guess what I am really asking is that if there are 4 bedroom, 4 bath homes that already have what you need - why not just buy one? Why over complicate it?

Keeping cashflow, maintenance and room sharing in mind, Padsplit works best with about 6-8 bedrooms. It can go higher or lower but according to other hosts that I've spoke to, that's the ideal room count. Also, if I found a 4/4 in the right area for the right price, I would still want to close up any living and/or dining areas and any interior community areas. This helps to avoid conflict. I am not necessarily looking for something that needs a lot of work outside of creating more bedrooms and making it Padsplit ready.

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Atlanta, Georgia

Quote from @Robin Simon:

Quote from @Michael Dumler:

@Michele S., as a licensed real estate agent who focuses predominantly on rent-by-the-room acquisition, the majority of my clients finance their deals either conventional, DSCR, or cash. As a self-employed 1099 individual, your best route is most likely DSCR. Even though interest rates and terms won't be as desirable as conventional, you'll have an easier time getting pre-approved. Underwriting will assess the performance and appraisal of the property based on traditional long-term rental comps. Therefore, when you are analyzing deals, it's important that you also run the numbers as if you were to hold the property as an LTR. Moreover, most DSCR lenders require title to be held in an LLC. As far as financing the rehab, this will have either to be cash out of pocket or will need to come from your private lender. Hope this helps!

There is unfortunately a lot of issues going on in the DSCR Secondary Markets with regards to PadSplits right now - Wall Street is insistent on considering them SRO/Boarding Houses and are pulling back making financing these (if theres any sort of alteration at all) very challenging at the moment

Thank you for that information! I have a scheduled call to Padsplit in just a few minutes

0 Votes

Atlanta, Georgia

Quote from @Michael Dumler:

Thanks Michael!

0 Votes

Atlanta, Georgia

Quote from @Andrew Postell:

@Michele S. Ok, so basically if you have your 25% downpayment you can just go buy any property off the MLS. Any reason why we wouldn't just go that route and not need any renovation work?

I would most likely use MLS to find a property but for Padsplit I would want to add bedrooms and possibly bathrooms to maximize bedroom count.

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Atlanta, Georgia

Hello there,

I believe is my first post so bear with me. I have been lurking on here forever, but just recently became a member so that I can access all the extras.

I am considering investing in a home to Padsplit, but not quite sure what the best structure for financing would be. There will definitely need to be a reno budget to, at the least add bedrooms, and I am looking to stay under 400k. I chatted with a lender about the DSCR loans and he said that Padsplit (room shares) would not technically qualify for DSCR although if it's vacant at the time of closing, it should be fine. I don't want to do anything questionable and want to come out of pocket as little as possible. I have a high credit score but I am also possibly over leveraged. I do potentially have access to private money if needed, and a 401(k). I am new to this idea and in the beginning phases, so I'm not even sure what other questions I should be asking. I do not want to fully apply for anything at this beginning phase since I have more research to do, so hoping I can get some help here.

Thank you in advance for your expertise!

0 Votes

Atlanta, Georgia

All Forum Posts by: Michele S.

Michele S. has started 1 posts and replied 5 times.

Post: How to finance a future Padsplit??

Post: How to finance a future Padsplit??

Post: How to finance a future Padsplit??

Post: How to finance a future Padsplit??

Post: How to finance a future Padsplit??