To qualify for a $900K DSCR loan, you would typically need to show rental income of around $8K per month, assuming property taxes are about $10K annually and insurance is around $3K.

Let’s say the main tenant accounts for most of the annual revenue with a lease ending soon (is healthy and probably looking to resign).

I’m a U.S. citizen who has lived my entire life abroad, but I still submit my tax returns annually.

There are also additional costs of operating and maintaining an LLC, like separate bank accounts, annual report filings, tax filings, etc.2.

Once all three units are operational, you’ll have three income streams to support your expenses.Evaluating if it’s a Good Deal:Cash-on-Cash Return: After figuring out your total investment (down payment + repair costs + holding costs), calculate your net annual cash flow (rental income minus expenses like mortgage, repairs, insurance, etc.).

.$38k Investment I 12% Annual Priority Return I 25.7% IRR I 2.9x Multiple I Hold Time 5-7 years

This can help reduce the principal more frequently, which means you'll pay less interest over time compared to just making monthly paymentInterest Savings: Bi-weekly payments often result in more interest savings over time compared to a single large annual payment, as the principal is reduced more frequently.Flexibility: If you have a good year financially, making a large principal payment can give you flexibility, but it may not be as effective in reducing interest if the loan has high monthly compounding.If you're looking to pay off the loan sooner and save on interest, bi-weekly payments are generally more effective.

This creates two loan payments ($100,000 of equity and $300,000 on the new mortgage).Key NumbersHome Equity Loan Interest Rate: 6%Mortgage Interest Rate: 7%Rental Income: $3,000 per monthExpenses (management, taxes, insurance, maintenance): $800 per monthIncome and ExpensesMonthly Rental Income: $3,000Monthly Expenses: $800Monthly Mortgage Payment: $2,000ExplanationThe investor earns $3,000 in rent each month.They pay $2,000 on the investment property mortgage and $800 on other expenses.This leaves $200 profit each month or $2,400 per year.However, you have to pay $6,000 interest on the equity borrowed.This leaves you with an annual loss of $3,600.This example shows that while the rental property generates positive monthly income, the interest cost of borrowing the initial $100,000 results in an overall annual loss.

And yeah, having 12 million annual visitors to that area helps also. :)

There are also additional costs of operating and maintaining an LLC, like separate bank accounts, annual report filings, tax filings, etc.2.