Housing market is too far gone.

lescivic

OT Supporter
Oct 13, 2003
1,942
Space Coast FL
Sounds a bit sketchy.

Chelsey Jones, a 29-year-old former grocery store manager in Columbus, Ohio, bought four rentals in the Smokies, three with Carles’s help. In all, Jones has borrowed $1.1 million over the past year for properties such as Big Bear Lookout, a four-bedroom cabin in Gatlinburg, Tenn., with shuffleboard, a hot tub, and an arcade.

Another company, Hometown Equity Mortgage LLC, which does business as TheLender, is promoting its “Non Owner No Income,” or “NONI,” loans to mortgage brokers.

 

calisteph6

Well-Known Member
May 5, 2005
16,492
KRAPROOM
Sounds a bit sketchy.

Chelsey Jones, a 29-year-old former grocery store manager in Columbus, Ohio, bought four rentals in the Smokies, three with Carles’s help. In all, Jones has borrowed $1.1 million over the past year for properties such as Big Bear Lookout, a four-bedroom cabin in Gatlinburg, Tenn., with shuffleboard, a hot tub, and an arcade.

Another company, Hometown Equity Mortgage LLC, which does business as TheLender, is promoting its “Non Owner No Income,” or “NONI,” loans to mortgage brokers.

Didn’t someone here post a tik tok basically outlining this sceme on how to buy 4 rentals with a normal interest rate? The Airbnb market in socal isn’t doing as well. Staycations aren’t as popular and cities are cracking down because full time residents got sick of tourists.
 

Gaunt

blood for the blood god
OT Supporter
Apr 16, 2005
9,444
KC
Sounds a bit sketchy.

Chelsey Jones, a 29-year-old former grocery store manager in Columbus, Ohio, bought four rentals in the Smokies, three with Carles’s help. In all, Jones has borrowed $1.1 million over the past year for properties such as Big Bear Lookout, a four-bedroom cabin in Gatlinburg, Tenn., with shuffleboard, a hot tub, and an arcade.

Another company, Hometown Equity Mortgage LLC, which does business as TheLender, is promoting its “Non Owner No Income,” or “NONI,” loans to mortgage brokers.

 

Gaunt

blood for the blood god
OT Supporter
Apr 16, 2005
9,444
KC
Sounds a bit sketchy.

Chelsey Jones, a 29-year-old former grocery store manager in Columbus, Ohio, bought four rentals in the Smokies, three with Carles’s help. In all, Jones has borrowed $1.1 million over the past year for properties such as Big Bear Lookout, a four-bedroom cabin in Gatlinburg, Tenn., with shuffleboard, a hot tub, and an arcade.

Another company, Hometown Equity Mortgage LLC, which does business as TheLender, is promoting its “Non Owner No Income,” or “NONI,” loans to mortgage brokers.

Jesus, reading this whole article is just straight out of 2008.

HomeXpress is trawling for more brokers to sell this kind of loan. “No income verification, no job listed,” Christopher Berrey, one of its account executives, posted on his LinkedIn profile. “AirBNB and VRBO are ACCEPTABLE!!!”
 
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lescivic

OT Supporter
Oct 13, 2003
1,942
Space Coast FL
Didn’t someone here post a tik tok basically outlining this sceme on how to buy 4 rentals with a normal interest rate? The Airbnb market in socal isn’t doing as well. Staycations aren’t as popular and cities are cracking down because full time residents got sick of tourists.
I know a guy that quit his job for Airbnb. Manages a few and owns one that is split into 3 rentals that he bought by loaning money from friends. Has horrible credit, so guessing he couldn’t qualify for one of those noni loans. Hope it works out for him but the recession has to be concerning.
 

lescivic

OT Supporter
Oct 13, 2003
1,942
Space Coast FL
Jesus, reading this whole article is just straight out of 2008.

HomeXpress is trawling for more brokers to sell this kind of loan. “No income verification, no job listed,” Christopher Berrey, one of its account executives, posted on his LinkedIn profile. “AirBNB and VRBO are ACCEPTABLE!!!”
Yeah, this can’t end well.

“The loans perform extremely well, flawlessly,” Ball says. “People with good credit have good credit because they have a history of paying their obligations in good times and bad times.”

What happens if, as is typical, families cut back on travel during a recession? Could there be trouble? Perhaps, he acknowledges. “It’s an interesting question,” he says.
 
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saabguy

Saab-free since 2013. Mortgage guru
OT Supporter
Aug 11, 2003
21,781
Loserville. Population: 1
Sounds a bit sketchy.

Chelsey Jones, a 29-year-old former grocery store manager in Columbus, Ohio, bought four rentals in the Smokies, three with Carles’s help. In all, Jones has borrowed $1.1 million over the past year for properties such as Big Bear Lookout, a four-bedroom cabin in Gatlinburg, Tenn., with shuffleboard, a hot tub, and an arcade.

Another company, Hometown Equity Mortgage LLC, which does business as TheLender, is promoting its “Non Owner No Income,” or “NONI,” loans to mortgage brokers.

It's likely a DSCR loan. Debt Service Coverage Ratio.

Investors can buy a property. Put 25% down. Don't disclose any income. Get an appraisal done with projected rental income. As long as the projected rent covers the projected mortgage payment, there's no need for qualifying income from the buyer. Just verify their assets and credit scores (for qualifying & rate pricing).

You're giving loans to investors with good credit and 25% invested. Not sketchy at all.
 
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atxmike

This is my custom title
OT Supporter
Nov 28, 2007
2,550
Austin, TX
Yeah, this can’t end well.

“The loans perform extremely well, flawlessly,” Ball says. “People with good credit have good credit because they have a history of paying their obligations in good times and bad times.”

What happens if, as is typical, families cut back on travel during a recession? Could there be trouble? Perhaps, he acknowledges. “It’s an interesting question,” he says.

How many of the borrowers even had credit during the last housing crash?

I know someone with two Airbnb's, losing his shirt. He was trying to explain it to me at the beginning and it never seemed workable because the occupancy rate he needed made the cleaning fees so high unless the average person stayed 2 weeks.
 
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atxmike

This is my custom title
OT Supporter
Nov 28, 2007
2,550
Austin, TX
It's likely a DSCR loan. Debt Service Coverage Ratio.

Investors can buy a property. Put 25% down. Don't disclose any income. Get an appraisal done with projected rental income. As long as the projected rent covers the projected mortgage payment, there's no need for qualifying income from the buyer. Just verify their assets and credit scores (for qualifying & rate pricing).

You're giving loans to investors with good credit and 25% invested. Not sketchy at all.

How accurately do you think an appraiser can be on revenue for an Airbnb property in Ohio tho?
 

saabguy

Saab-free since 2013. Mortgage guru
OT Supporter
Aug 11, 2003
21,781
Loserville. Population: 1
How accurately do you think an appraiser can be on revenue for an Airbnb property in Ohio tho?
Rent isn't usually calculated from projected AirBnB. That's too much of an uncertainty. No telling if new owner will rent it out for 12 months or 12 days, they may only do part time and use it for personal use some. Typically the projected rental income is based on a long term tenant (1yr). As long as the property cash flows with that estimate, then you're fine. If you choose to airbnb it instead, then go for it.
 
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lescivic

OT Supporter
Oct 13, 2003
1,942
Space Coast FL
It's likely a DSCR loan. Debt Service Coverage Ratio.

Investors can buy a property. Put 25% down. Don't disclose any income. Get an appraisal done with projected rental income. As long as the projected rent covers the projected mortgage payment, there's no need for qualifying income from the buyer. Just verify their assets and credit scores (for qualifying & rate pricing).

You're giving loans to investors with good credit and 25% invested. Not sketchy at all.
This sounds sketchy. So what happens when she can’t collect the same Airbnb fees with the recession and has no other source of income to pay the mortgage because she quit her job?

Chelsey Jones, a 29-year-old former grocery store manager in Columbus, Ohio, bought four rentals in the Smokies, three with Carles’s help. In all, Jones has borrowed $1.1 million over the past year for properties.

Jones expects to make a $150,000 profit this year from her rental properties: her Smokies homes, along with one in Ohio and two more under construction in Florida. That’s almost four times more than she earned in her grocery job, which she quit in 2019.
 

saabguy

Saab-free since 2013. Mortgage guru
OT Supporter
Aug 11, 2003
21,781
Loserville. Population: 1
This sounds sketchy. So what happens when she can’t collect the same Airbnb fees with the recession and has no other source of income to pay the mortgage because she quit her job?

Chelsey Jones, a 29-year-old former grocery store manager in Columbus, Ohio, bought four rentals in the Smokies, three with Carles’s help. In all, Jones has borrowed $1.1 million over the past year for properties.

Jones expects to make a $150,000 profit this year from her rental properties: her Smokies homes, along with one in Ohio and two more under construction in Florida. That’s almost four times more than she earned in her grocery job, which she quit in 2019.
Well I wouldn't expect projected rentals to go from fully booked to 100% vacant. You could say the same for any business. What if you're a contractor and due to the recession, people aren't spending money to build or remodel? What if you're a lawncare business and all your customers start cutting their own grass? If she can't afford to keep them then she can sell and will probably have gained some equity during her time owning them. I would expect she would be able to keep them rented enough each year to pay the mortgage each month. Her projections were for $150k in income...prior to that she was making $40k at a grocery store, so she's got a cushion to play with
 

Slimmy

Yep.
Mar 14, 2000
135,666
Ft. Lauderdale
Oof, just got this week's releases, just 1 model that's 2 houses away from my parents.

And it seems like they raised the list price $15K over the same model last month...

:hs:
 
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Finest

OG #93
Mar 16, 2000
34,800
Wisconsin
Rent isn't usually calculated from projected AirBnB. That's too much of an uncertainty. No telling if new owner will rent it out for 12 months or 12 days, they may only do part time and use it for personal use some. Typically the projected rental income is based on a long term tenant (1yr). As long as the property cash flows with that estimate, then you're fine. If you choose to airbnb it instead, then go for it.

When I inquired about getting a mortgage for an investment property, I was told I needed to provide 1 yr rental income to qualify. But I don't own the house yet, so how do I get 1 yr rental data?
 

zizi

OT Supporter
Jan 11, 2005
6,924
Our new home smells so bad and the carpets are so messed up we're getting new carpet upstairs and sanding/refinishing the existing hardwood on the 1st floor and stairs and adding new hardwood to match the existing hardwood at a cost of a little less than $20k.
 

saabguy

Saab-free since 2013. Mortgage guru
OT Supporter
Aug 11, 2003
21,781
Loserville. Population: 1
When I inquired about getting a mortgage for an investment property, I was told I needed to provide 1 yr rental income to qualify. But I don't own the house yet, so how do I get 1 yr rental data?
They want you to show rental income on your taxes? If that’s what they’re asking…they are wrong.
 

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