Want a step by step plan to finally purchase your first high cash flowing short term rental investment? Schedule a call with me to see if working together on this is a good fit. www.livingoffrentals.com/call
Love this breakdown! Thanks again Kirby! Question for you, since you do Multi family STRs. In the refinance, does the bank take your NOI / Cap rate and value like a hotel? I'm suspecting no, but that would be a dream if so.
Thanks Caleb! That is the million dollar question right! If you could buy a multi unit that is being used as a long-term rental and double the NOI by converting each unit to a short-term rental, then you could essentially double the value of the property. So far, I haven't seen many commercial lenders willing to use the STR income when calculating NOI on a commercial loan. Typically they look at what the property would (or did) rent for as a long-term rental and use that income number for the NOI calculation. Since I buy 4 units or less, my appraisals are residential appraisals, so they base the value on the comps, rather than the income, but it's a great question for 5+ unit buildings, and I think eventually banks will start using STR income for valuing properties!
@@LivingOffRentalsthanks for the response. I figured that was the case, but now I know. I hear about people turning old hotels in multifamily... I'd prefer to do the opposite given the right circumstances.
Want a step by step plan to finally purchase your first high cash flowing short term rental investment? Schedule a call with me to see if working together on this is a good fit. www.livingoffrentals.com/call
wow!
congrats on the new property!
Thanks Saad! Appreciate the support!
Great video!!
Thanks very much! Glad it was helpful!😀
Love this breakdown! Thanks again Kirby!
Question for you, since you do Multi family STRs. In the refinance, does the bank take your NOI / Cap rate and value like a hotel? I'm suspecting no, but that would be a dream if so.
Thanks Caleb! That is the million dollar question right! If you could buy a multi unit that is being used as a long-term rental and double the NOI by converting each unit to a short-term rental, then you could essentially double the value of the property. So far, I haven't seen many commercial lenders willing to use the STR income when calculating NOI on a commercial loan. Typically they look at what the property would (or did) rent for as a long-term rental and use that income number for the NOI calculation. Since I buy 4 units or less, my appraisals are residential appraisals, so they base the value on the comps, rather than the income, but it's a great question for 5+ unit buildings, and I think eventually banks will start using STR income for valuing properties!
@@LivingOffRentalsthanks for the response. I figured that was the case, but now I know. I hear about people turning old hotels in multifamily... I'd prefer to do the opposite given the right circumstances.
Great stuff. Did the listing description say “duplex” or was there some other term that made it hit for your search criteria?
Great question! It was listed as a multifamily property on the MLS so that’s why it hit my search on realtor.com.
Rob Lowe, is that you?
😄 He's my cousin.