All Forum Posts by: Steve Bell

Hi BP community,

Just need a little reassurance. Trying to close on 2nd STR tomorrow. Have not yet received a clear to close from my lender. Going the conventional loan route.

We are getting a little hung up because the lender knows we are at the top end of the DTI ratio, and they have been getting creative with trying to help us bring it down at closing so the underwriters will clear us.

The issue is our revolving credit. Our lender told us to use our HELOC to pay off all credit debt to consolidate the credit cards and hopefully get a lower monthly payment. Now they are telling me in the 11th hour they are not sure that will be enough and quite possibly may not be able to get a clear to close.

The lender months ago told me to go ahead and get this deal, and made it sound like they could make it work, are there legal and financial ramifications if the underwriter is unwilling to give us a clear to close and can’t buy the property?

Thanks in advance for any and all advice.

Hi Huiya,

I am pretty new this this myself, but with a partner this year we purchased our first rental property. I was more focused on cash flow and trying to replace income so I could leave my 9-5 sooner.

We turned our rental into an STR and must say it has gone well so far this year. We are currently looking at our next deal.
mad a newbie I would highly recommend reading as many books on the topic as you can find…there are lots of great beginner books here at BP. I would also recommend watching the podcasts. I still do that on a daily basis. I am a long way away from leaving my 9-5, but as so many investors say we took action and started that journey. 
1 more thing I would STRONGLY recommend maybe even more so than the others, find a local meetup, I attend mine religiously and I have learned so much from other investors.

Good luck!

Steve

Hi everyone,

Would love to hear experience with buying rent to own properties.

I am new to investing. I purchased a SFH earlier this year and started renting it out a few months ago. It is a STR and it's going great and now my partner and I are looking to scale.

However, as we gather resources to buy another property a close friend and colleague who lives near my primary residence has recently fell into some hard times.

She is currently going through a somewhat ugly divorce, but her hope is to keep the house where her teen children go to school. The area she lives in is too expensive for her to rent on a single mom’s salary. She is trying the best she can to find ways to scrape together extra money because she wants to buy her ex out to have the property to herself.

I would love to help her out. I spent the better portion of a year and a half studying and learning about real estate before getting in, so most of my knowledge comes by way of books, podcasts, and my local REIA meetup meetings.

I was curious to hear from someone who knows creative finance. I was wondering if it would make sense to offer to her to try and do a deal where I offer her a seller finance deal where we can structure it so she is in a rent to own situation from me?

Does what I typed even make sense? Could I take the title off her hands and keep her financing (she bought about 8 years ago when the rates were fantastic)?

Does seller financing with offering her a rent to own possibility even make sense? Could this benefit her? Does this offer an investor any incentives?

Thanks for any and all advice or thoughts.

My partner and I recently bought and rehabbed and furnished our 1st STR. Had my real estate agent come by to take a look at the finished project and got her unofficial opinion about the value of our new vacation rental.

She said that it could easily sell for $90 - $110k more than what we purchased it for. Given that analysis we think it would be worth it to try to get an appraisal and do a cash out refi, so we can pay back the HELOC we used for the downpayment, rehab, and furnishing costs.

I have a couple questions for the BP community.

1. Would anyone hesitate or have any reason NOT to get the loan refinanced other than getting an enormous interest rate hike on the new loan? Keep in mind we bought in Jan 2023 and our interest rate is a 6.625%. I have not looked at latest rates, but I know this is not anywhere close to the 2-3% rates we enjoyed just a short couple of years ago.

Another piece of info I neglected to mention, we received a second home loan on this property from our lender so we only put down 10% of the purchase price. 

2. Because we only put 10% down should we expect after a cash out refi that the lender will refi this into a conventional loan and expect 20% be left in? Would there be anyway we could ask for the refinanced loan to be a second home loan and we could get 90% LTV with the new terms?

3. If we did a cash out refi, will the lender be looking for the new % to be left in figured from the “Original” purchase price or would it be calculated from the newly “appraised” price?

Thanks in advance for any and all advice!!

We recently got an oral agreement with a cleaner who is experienced cleaning STRs. I am a first time STR owner and we plan to go live in next 4 weeks. but I have not heard anyone on these forums or in podcasts talk about whether or not you should have a contract with your cleaning personnel. We live too far away to clean ourselves or inspect often. Can anyone tell me advantages or disadvantages of having a contract with your cleaning personnel? If yes, beyond going to an attorney…where would we look for a well designed contract for a cleaner, and what might be important points of interest would we want to include? Thanks in advance for any advice!

Appreciate all the great suggestions, thank you everyone!

Andrew thanks for the reply…property is in Manistee MI.

Hello BP community,

We recently bought a property in a regional drivable location. However, we don't live that close. We are about 4 hours by car. The area is a smaller community with nearly 200 STRs. We plan to use our property as a STR, but our biggest concern right now is finding local trustworthy cleaners. Any suggestions on how to best find quality cleaners when you plan to self manage from a distance?

Thanks for any advice!

Makes sense thanks Michael!

Thanks everyone! Follow up, do borrowing rules about property as an investment or a second home change by state/county based on rules of regulations for investment properties in the area you are buying in? And what if currently there are no regulations for investment properties in the area you are buying in? Thanks again for any insight!