STR-based GRM

[Surf Cat]

Seems like an easy bear trap to put your foot into, for how much.

ZZGAMAZZ always seems to put up situations like these here on the Forum. He's definitely the winner of high risk, far from the normal, assignments taken.

I wonder if the annualized $$$$ of the daily rental would be similar to the anualized $$$$ of the weekly or monthly rental when modified by vacancy percentage????

You shouldn't have to wonder about anything if you're going this route. The borrower should provide you with at a minimum, 2 years of Str rental income and expenses for you to conclude your analysis. I mean, they probably advertise on VRBO or Airbnb. All of the data is right there at their fingertips. Ask for it.

 

[ZZGAMAZZ]

ZZGAMAZZ always seems to put up situations like these here on the Forum. He's definitely the winner of high risk, far from the normal, assignments taken.


You shouldn't have to wonder about anything if you're going this route. The borrower should provide you with at a minimum, 2 years of Str rental income and expenses for you to conclude your analysis. I mean, they probably advertise on VRBO or Airbnb. All of the data is right there at their fingertips. Ask for it.

Yea but the subject's actual rents are meaningless, aren't they, because the OV describes market rents? Obviously my 1st STR.

 

[Surf Cat]

Yea but the subject's actual rents are meaningless, aren't they, because the OV describes market rents? Obviously my 1st STR.

WTF?! What the hell are you doing? Concocting some voodoo numbers to make it work? Actual rents are meaningless?

If you're doing this on a 2.6, 1004 looking for a grm.... look for long-term, annual leases, put it together and get out of this.

 

[BRCJR]

Rental Income from the Subject Property: Short-Term Rental | Fannie Mae

selling-guide.fanniemae.com

 

[ZZGAMAZZ]

WTF?! What the hell are you doing? Concocting some voodoo numbers to make it work? Actual rents are meaningless?

If you're doing this on a 2.6, 1004 looking for a grm.... look for long-term, annual leases, put it together and get out of this.

Regarding Posts #11 and #13:
Since when do the subject's rents have an impact on the Opinion of Rental Value, any more so than the selling price of a subject property has an impact on the Opinion of Market Value? Learn to read and understand written language; and tame your inherent need to be bombastic and rude, which displays poor upbringing and which presumably affects your relationship with stakeholders as well., ergo the baseline perception of the Public Trust--that appraisers are shortsighted and rude--with a caveat as disclosed previously that this is my 1st STR assignment. [Please refer to Post #14 above for a whiff of the potential positive influence of the AF. If yoo're displeased with my role in the industry, or the AF, either block me or schule a duel at high noon, just save your worthless attempts to be a bully to for your intimates, as embarrassed as I am to actually take the time to respond, but unnecessary rude behavior always upsets me, although it should amuse me more so. LOL

 

[ZZGAMAZZ]

Rental Income from the Subject Property: Short-Term Rental | Fannie Mae

selling-guide.fanniemae.com

Are the lender's responsiblity to determine the subject rents based upon results of an appraisal, or obtained directly by the lender from the borrower for purposes of qualifying for a lona?

 

[BRCJR]

Are the lender's responsiblity to determine the subject rents based upon results of an appraisal, or obtained directly by the lender from the borrower for purposes of qualifying for a lona?

I think the rent/income and expenses would be taken from a tax return. If no STR history, we would base our LTV on the value of the real property as a single unit residential (non STR). If located in an environment, where adequate data exists, with comparable sales we would look at the market rent/income/expenses provided by an appraisal.

I guess my answer is, it depends.

 

[Dublin ohio]

Are the lender's responsiblity to determine the subject rents based upon results of an appraisal, or obtained directly by the lender from the borrower for purposes of qualifying for a lona?

Seems in your case they want you to provide the documentation

Documentation to Determine Monthly Gross Rental Income

The lender must document a current housing payment to use any rental income from the subject property in qualifying.1 Purchase: The Single-Family Comparable Rent Schedule ( Form 1007) must be completed based on standard long-term rentals, or The lender must obtain validated rental data for other short-term rentals from Multiple Listing Service (MLS), or property management companies. Validated rental data must include: three comparable short-term rental properties. Comparable rental properties should be from within the same market area (including subdivision or project) as the subject property, when possible; daily, weekly, and/or monthly rental rates for these comparables; number of days rented in the last calendar year; and relevant factors that could impact the property's use as a short-term rental, if applicable. The lender must retain all documentation used to determine monthly market rents in the loan file.

 

[DWiley]

Is the nightly/weekly "rent" for an STR really rent? Or is it business revenue? If it is really revenue rather than "rent," is a GRM analysis a valid approach?
I would not touch doing an STR on a 1007 with a GRM with a 200' laser. YMMV.

 

[Dublin ohio]

I am new SFREP client working my first Short Term Rental assignment ever, based on 2.6 format.

As I create the top half of the 2-part STR narrative, near bottom of the STR page 1, the text appears word-by-word in the Income section on 1004 page 3 where Market Rent is multiplied by GRM to obtain Income Approach OV.

Is the link between the STR form and the 1004 form intregarl to STR methodology that consequently establishes a short-term-based GRM--which might make sense if it disclosed and if the client is aware of the distinction between that and a typical GRM? [asking because I don't know if it is a software glitch or the industry way to determine a STR-based OV.]

Thanks peers.

What exactly were the assignment conditions, just rental data on a 1007(per Fannie ) or developing an income approach based on an analysis of STR analysis. If it's the latter, it very well be outside of your wheelhouse