All Forum Posts by: Nick Velez

@Rachael Palmer

I HIGHLY suggest you utilize @Josh Green, he has that market dialed down and has the results to back up all of his claims. 

As far as financing, the property does not need to be in a LLC. There are pros and cons to each set up but the biggest con of closing in a LLC is it typically requires business purpose loans that have less advantageous terms than conventional financing. No one can tell you which method is best as it depends on your personal risk tolerance, financial position, etc. Feel free to message me and I can through you through each scenario, but your attorney is going to be your best resource when it comes to liability.

@Alexander Phillips

Wow, this is a mess and I have so many questions. It is unfortunate that you are in this position and it sounds like you have had very little to no communication from your representation or lender. 

I assume this is a 3rd party lender you are using and not the builders lender? I can not fathom how you were not informed that this was a DSCR loan and you should absolutely inquire about the specifics such as whether your are IO or not and the pre payment penalty. 8.4% is high in todays rate environment, even for DSCR.

Unless the appraisal literally just came in before closing, you should not be informed this late into the process that the DSCR ratio does not work. This is improper communication and expectation setting.

Why is the listing agent putting tenants in the property and why are you communicating with them, do you not have your own representation? Are the leases even valid, if they are not signed by you or your property manager? 

Your options are going to come down to what your purchase agreement says. Odds are you will lose your EMD if you back out, which may be a better option than sticking with this deal (depending on the amount and how it impacts you financially.) If you have a financing contingency in place, that could have been your scape goat when the DSCR ratio no longer worked.

More than happy to review any documents you have an offer any advice I can if you shoot me a message. 

@Davidangel Muniz

The best target market for you really depends on your financial situation and what you can afford. There are some great markets to invest in such as Pinellas county, but there is a barrier to entry to have a performing property. There are plenty of transient markets in Florida where the supply of median home priced properties can cash flow well but it would make no sense to purchase a luxury property in that market. 

I would argue that the MOST IMPORTANT factor for success will be a boots on the ground team that knows the STR market in and out. Utilizing a realtor whom owns/manages properties in your desired market and can give you concrete real numbers is such much more valuable than running hypotheticals on AIRDNA.

A lot of my successful Florida investors are purchasing performing properties in Pinellas county with @Josh Green. 

@Bryce Kennebeck

Kudos to you for operating a STR house hack! When it comes to qualifying, the income reported on your schedule E for the rented units will be used for qualification. Items such as electricity/water are not counted against you UNLESS you wrote those off as an expense, which you likely did.

For the departing unit, you will need to provide a lease to have any income from that unit count towards income. This is where the tricky part of STR's come into play since no lease exists.

One thing to note with FHA is that unless you are moving 100 miles away, you can not use departing primary rental income to qualify.

I would connect with a lender to see what your current situation looks like so you can strategize for a future move. Best of luck!

There are a few maps online that show the unincorporated areas of pinellas county down to the street, and then you can cross reference the county zoning website. Once you look at enough properties, it is easy to know whether one is located in unincorporated pinellas or a different municipality. 

If you have any questions about STRs, I HIGHLY suggest talking to @Josh Green. That is his local market and he has it down to a science. 

@Ryan Marble

Orlando and Tampa are definitely different markets but like most markets, design and amenities tend to be the key players. With that said, the design in Orlando is going to be much more theme park centric while Tampa allows you to be a lot more creative. In either location, if you are not boots on the ground, you absolutely need a realtor who has STR experience and ideally properties themselves. Market metrics are great but you can not be real numbers from their own portfolios or past clients. If you are considering anywhere in the Tampa area, I HIGHLY recommend you connect with @Josh Green. 

@Josh Green

I can't speak to going rates on a business loan but I would think that is a fair rate for a 35k loan and 5 year term. A HELOC is going to be in a similar range for a primary, but offer a longer term.

If your plan is to pay off the line in the near future with a refinance, I would not be too considered with term length or rate. If, however, you think it will be a few years, you are likely off securing a HELOC which will result in a longer term and lower payment.

@Brianna Buscemi

If I could do it all over again, I wish I would have purchased a 2-4 unit property instead of a town house as my first property. The new builds are very attractive with all of the incentives, but they are often in weird corners of the town and do not command as high of rent as more prime locations that have been around for awhile. A 2-4 unit is going to cash flow much better after you depart, which will help you qualify for properties in the future. 

I would connect with a local expert such as @Josh Green, who can help you search for properties and run numbers when deals pop up. I know he has personally done several house hacks and has helped a plethora of clients repeat the same model he followed. 

Don't give up and stay on the hunt!

@Erik Browning

Well said and I have dealt with the same thing. Many of the people that reach out act as if no one told them someone would be reaching out, which blows my mind. 

It should go without saying that if you put your info in somewhere, it will be shared. And those on the other end have a duty to try and help you.

@James Thompson

A large portion of my clients have been purchasing STR's in the Tampa/Clearwater market and several that have purchased last year, are reaching back out to purchase another this year because their numbers have been so strong.

Like all STR markets right now, it is imperative you know exactly what needs to be done in order for you to perform in the top percentile of properties. Gone are the days of throwing up an average property receiving great returns with minimal effort. If you are considering the Tampa market, I HIGHLY suggest you connect with @Josh Green. I firmly believe he is the most knowledgable agent in the area when it comes to STR's. Several of my clients refuse to use anyone but him after seeing the value he provides.