Navigating Short-Term Stay Success with Brian Bockholdt

Quick Summary

The conversation highlights Brian Bockholdt’s journey as a short-term rental investor and financer. Initially starting with a personal-use lake house purchase in 2020, Brian discovered the profitability of renting short-term properties, leading to the expansion of his portfolio, which includes properties in Marco Island, Florida. Leveraging his expertise as a mortgage loan officer, Brian discusses financing strategies, market conditions, and his approach to property selection and management. He emphasizes the importance of personalized strategies in real estate investment and adapting to market challenges.

Key Points

• Properties in Marco Island, Florida, including condos, single-family homes, and planned construction of a luxury property.
• Utilize second home loans creatively for multiple properties with lower down payments (10%).
• The best time to invest in real estate is now; waiting often misses opportunities.
• Condo financing in resort areas has become more restrictive, favoring single-family homes.
• Rising interest rates require more strategic planning by investors.
• Stay in your properties to experience them from a guest’s perspective.
• Focus on competitive amenities and proper pricing.
• Seek expert guidance for financing and market insights.

Full Transcript

Check on the full podcast on:

1. YouTube
2. Spotify
3. Apple Podcasts

Jeremy: All right, we are live with the Short-Term Rental Pro Podcast. I'm super excited today to be joined by Brian Bockholdt, who is not only a short-term rental investor himself—he's actually live from one of his properties right now—but he's also a financer.

Having done… how many properties have you financed for clients in your days, Brian?

Brian: Oh boy, well, dollar amounts definitely over a billion. I know that.

Jeremy: Oh my goodness!

Brian: Quite a few.

Jeremy: but thousands—probably thousands of different properties for investors.

Brian: Oh for sure, no doubt. That's definitely in the thousands.

Jeremy: Yeah, Brian is one of the leaders in the game for short-term rental financing, and he also has his own amazing portfolio. So, Brian, how did you get started in short-term rentals?

Brian: Kind of by accident. I think maybe that's the way it happened for a lot of people. We made a lake house purchase in 2021—2020 rather—a COVID, I would call it a COVID purchase. About an hour from our house, with not really any intention necessarily to run it, but we had some friends that had done something similar, and they rented a little bit.

We got into it, I was about as ignorant as that, just running our lake house out here and there in the beginning. Then, months later, during our first vacation here to Marco Island—it was supposed to just be a vacation—we left under contract, actually, on the condo that I'm standing in now.

With the two properties, I was given a mandate by my wife that we had to rent them like heck to try and make some money back. The rest is history. We've since bought a couple more properties down here and are building another one, and that's all transpired in the last two and a half years or so.

Jeremy: So, where are you from, and where was this first property you bought in 2021?

Brian: We live just a little bit south of Chicago, and we bought a lake house about an hour north from our primary residence.

Jeremy: And how much, if you don't mind me asking, how much did you buy it for?

Brian: The lake house? $595,000.

Jeremy: Okay, $595,000. Is it still kind of like a… because it seems like a lot of your— I mean, you're currently in one of your properties—where? Marco? Marco Island, in Florida.

Brian: Marco Island, yep.

Jeremy: Do you go to all four of your own properties pretty regularly?

Brian: Yeah. Since we didn't get into this with business as the original design, personal use has always been a huge component for us, no doubt. We're certainly way more business-oriented now in this space than we were in the beginning when we first bought the lake house. But yes, we use all of our properties.

Jeremy: So, would you consider it a lifestyle asset?

Brian: Most definitely.

Jeremy: Got it. Okay, so you got in with the first one in 2021, started renting it out. Were you personally surprised at how well it was doing? Did that inspire you to then add additional properties to your portfolio?

Brian: We were extremely surprised, actually, with how much we were able to get for the lake house, to the point where it was a constant battle of wanting to use it personally and realizing how much money we were sacrificing on a week in July if we did that.

Still to this day, we have to find that balance. But we were very surprised, for sure.

Jeremy: About how much did you put in your pocket.

Brian: About $7,000.

Jeremy: Wow, so $7,000?

Brian: Or about $1,000 a night in the summer.

Jeremy: A grand a night. So, what is this property grossing on an annual basis?

Brian: Oh, this property doesn't gross a ton because this is still the one of the bunch that we do use. Being so close to our price, we do still sacrifice a ton of money in the summer and use it for personal use quite a bit.

But it pays for itself and nets a little something on top of that, while allowing us an absolute ton of personal use. We only do six or seven renters in the summer, and then we rent it over the winter. Obviously, the demand is much lower.

But yeah, I mean, it literally pays for itself.

Jeremy: That's good.

Brian: Yeah, about six to eight renters.

Jeremy: That's… wow, that is a dream. Six to eight renters a year, for about, what, a week apiece, pays for the entire mortgage, expenses, and repairs for a lake house property.

So, you got the first one, were surprised by how well it was doing, and then decided to buy additional properties—ones you wouldn't go to as often. Where are those properties? When did you get them, how much did you pay, and how are they doing?

Brian: Well, the next one was in Marco Island, which is where all the remaining ones are. That was the condo that I'm standing in now. We closed on that in February 2021.

The lake house was actually July 2020; that was the first one. This one, we closed in February 2021. Bought it for $695,000. Worth every bit of $1.2 million now. We didn’t do a single thing to it. That’s just how crazy the market got right after we purchased.

We thought we were purchasing high because even at the $695,000, they had jumped quite a bit.

Jeremy: You always think you're purchasing high, and then six months later, whop, I got a good deal.

Brian: So, this one does really well. Obviously, we got in at a good purchase price and interest rate. It probably does about $150,000.

Jeremy: Very solid. And then, what about the, when did you add the additional condos?

Brian: So, we bought a house here on Marco seven or eight months later. It would have been October of 2021, and we bought that for $940,000.

That one's gonna do about the same. It's a little more expensive than the condo, but it will do about $150,000 as well. And then, we bought another condo in January of last year for $500,000—just a little one-bedroom. We also bought a piece of land recently in December.

Okay, then we're getting ready to build a five-bed, five-and-a-half-bath, 4,200 square foot house on that.

Jeremy: That is gonna crush it.

Brian: So it'll be a $4.2 million valuation—at least in today's current market. we're gonna rent that for a while and see how that goes, but it'll be a monster.

Jeremy: All right, I want to get into—I want to unpack that because I'm personally curious. Well, I've never built anything. I have—I've only renovated, I've added finished square footage, but I've never actually built anything.

So, I'm curious, and this is going to tie into kind of the financing aspect. Brian, his day job, so to speak, is—yeah, tell us—what is your day job? And in the last couple of years, how has your business kind of shifted to largely working with short-term rental investors like yourself?

Brian: Yeah, well, my day job is mortgage lending. I'm a mortgage loan officer. I have been since I turned 18. I'm 48 now, so that makes 30 years long.

Jeremy: Wow, three decades.

Brian: Yeah, three decades. When we first just started, and by the time we bought our second short-term rental or so, we started to get in circles and meet and talk to people like yourself and other people doing the STR game.

Just my business, personally—which was always just standard primary residence stuff 95% of the time—the synergy with the clients, the like-minded clients that are looking to buy STRs, has just really blossomed.

I would say now probably 80-plus percent—maybe even approaching 90%—of my business is STR clients.

Jeremy: So second-home investors, largely investors. Okay, and tell us—so these first—so you've done, you yourself, and obviously we can talk about her clients, what you've done. But you've done those four properties you bought. Did you get a loan for each of them?

Brian: We did, yeah.

Jeremy: And what type of—if you don't mind me asking—what financing did you do for yourself? And then also, what I want to tie that into is, what loans do you recommend for your investors?

Brian: Well, so… I was able to do something pretty cool here in Marco that isn't an easy thing to do—which is buy multiple properties in the same market without having to ever once use an investment property loan.

Investment property loans are a great tool, but you're going to have a higher down payment requirement. For most people doing this, they want to get in for as little money as they can because the plan is to scale. They want to hold on to as much capital as they can so they can scale quicker.

We bought the first condo—the one I'm in now—with a 10% down second home loan. Then, about eight months later, we bought the house. That was a jumbo loan, so we did 15% down.

But we were able to do another second home loan just down the street only about eight months later.

The reason was there’s some nuance to that rule. You can’t typically do that, but since we were buying a completely different kind of property—going from a condo to a single-family home…

Jeremy: "We, we were upgrading properties.”

Brian: We were basically able to tell the underwriter the story: "You know, we love Marco Island, we love our condo, but we’ve decided with the time we’ve spent here, we would prefer a single-family home with a private pool versus condo life."

Jeremy: Yeah, that's what I’ve been told before. I’ve done second home loans, and then I tried to do second home loans again in the same market. The way it’s been explained to me is that it has to be an upgrade to a different type of property. Like, "Oh, I had this one for six months, now I’m leveling up," and the requirements are okay with that.

Brian: For the most part, that’s correct. A lot of things go into it. How long ago did you buy the first one? Did you buy it two months ago and already decide you want something completely different? That might be a harder story to tell.

It doesn’t even necessarily have to be an upgrade. It could be that you bought a four-bedroom and decided you don’t need a four-bedroom anymore, so now you want to downsize.

Jeremy: Okay, so you need something entirely different. All right, so you were able to get multiple second home loans. I get a lot of comments on social media saying, “Oh, you can’t do a second home loan for a quote-unquote investment property.” Unpack that for me.

Brian: Well, there’s a lot of misinformation on that exact subject. A lot of people just don’t understand it. When you use a second home loan, it doesn’t mean you can’t rent your property at all. There are no rules against renting your second home—even renting it a lot.

Quite frankly, you can rent your primary residence. I mean, I wouldn’t do it, but some people do, and there aren’t really any rules, mortgage lending-wise, against that either.

When you use a second home loan…

Jeremy: You can’t rent it all the time.

When you’re doing a second home loan implies some personal use aspect. The underwriting guideline literally says that a buyer will use the property for personal use some portion of the year.

Some portion of the year. So, what does that even mean? A lot of people say two weeks is the benchmark, but that’s not even in the written guidelines. It’s just "some portion of the year."

It’s also an entirely unmeasurable thing. No lender is going to track you to find out how many days a year you stayed at your property. Maybe one year, you’re there two or three weeks. Maybe the next year, you’re not there for two weeks. That’s totally okay.

That’s what everybody else in this space is doing. You want to use a second home loan because you can do something like 10% down. You’ll probably get a better interest rate than you would with an investment property loan.

Jeremy: Got it. And then for a primary—I’m just curious now—what does the language say for a primary home?

Brian: I’m not sure of the specific wording like I just rattled off for the second home loan, but there’s nothing prohibiting you from renting your primary residence.

Jeremy: The idea is that you intend to live there and for it to be your main residence. Right, like if you’re under contract on a primary house and you also get a lease somewhere else. Then it would look odd because it’s like, "All right, why are you getting a lease?" Correct me if I’m wrong, but really, it’s just about your intent. At that moment, you intend for this to be the place you live.

Brian: Correct. That’s exactly the right way to put it, too. Intent is the exact right word to use. At the time you’re signing the documents, your intention for that property is as a primary residence, second home, whatever it might be.

Your life can change quickly, though. You can buy a property as a primary residence and six months later, not need that home anymore—or need to move for another purpose.

Maybe it’s a job change, a life change like a divorce, or suddenly you’re pregnant with triplets, and the house you just bought six months ago isn’t going to work for you anymore. You can go right on and buy something else.

And you don’t have to change your old loan. Some people even think you have to refinance the loan because it’s a primary residence—you absolutely don’t have to.

Jeremy: You don’t have to tell anybody.

Brian: Nobody’s asking. At the time you sign the documents, your intent was to use it as a primary residence. Things changed six months later, and there’s nothing that can be done about it.

Jeremy: I’m trying to remember the name of the case, but somebody bought a house—actually, two houses—one as a primary and one as a second home. They had a lease document signed prior to closing, saying someone was going to rent the house for a year.

Yeah, that shows you clearly didn’t have the intent to live there if you’ve already signed a lease document.

Brian: That would be occupancy fraud. That would be mortgage fraud, for sure. But there’s still plenty of ambiguity. Things can change, but that would definitely be a no-no.

Jeremy: Got it. Guys, don’t mess around with any of that. So, to clarify second home loans, you need to stay there a certain portion of the year.

Brian, if I butchered that language, essentially second homes are okay for short-term rentals. The advantages are 10% down versus an investment loan, where you have to do what, 20% down?

Brian: Well, you can do as little as 15% down, but you really get hammered on pricing when you do that. You’re better off at 20%. Some banks, with their portfolio products, might require even 25% down for investment. So, worse terms and more down on an investment property.

Jeremy: All right, so 10% down for a second home loan. And then what would be an investment loan?

Brian: 15% starting down, but you’re going to get worse terms interest-rate wise. You get hammered at that 15% level for an investment property. You’d be better off at 20% or 25%. So, you’re looking at a much more significant financial burden on the front end with an investment property loan.

Jeremy: Got it. So, what I want to do—so a lot of people now are talking about, "Oh, interest rates." I want to get into what you're seeing today—like, what are the—and then kind of what you would recommend for folk.

But let's break it down. Just how crazy, on your side, was 2020, 2021, 2022 from a mortgage standpoint?

Brian: Pretty historically crazy. I mean, rates in the twos. I even did some loans for people—some ARMs—where people got as low as 1.7 percent. So, that was pretty good. It was pretty crazy.

Jeremy: I bet they wish… I bet they wish they’d got a fixed, fixed rate.

Brian: Yeah, maybe. Maybe, yeah.

Jeremy: Wow, so how many—I guess how many loans—I'm just curious, how many loans were you doing a week at that point?

Brian: It’s probably closing 250 units a year.

Jeremy: Got it, so like 5 a week on average?

Brian: Yes, like that. One every day.

Jeremy: That's crazy. So, I don’t know, let’s assume a half million dollars of purchase price. Multiply that by 250k, we're at… let’s see if I can do quick math… hundreds of millions. Over 100.

Brian: Over 100 million, yeah.

Jeremy: So, you did 100 million dollars of loans in 2020, 2021, and 2022? I guess so. Tell me, what are you seeing in 2023? I mean, personally, you know, I bought a house a month ago. I bought one in October of 2022. Like, I’ll speak for myself—I’m still, I’m still up. I got my foot on the pedal. But like, what are you seeing?

Brian: Well, there’s still a lot of people in this space buying. I mean, there’s no doubt about it. There’s a lot of investors on the sidelines, for sure, waiting for prices to come down and/or rates to come down.

They might be waiting for a while, especially on prices. Not sure that’ll even happen. A lot of people predicted we would’ve had that big drop in values already, and we haven’t. It’s kind of stagnated—it’s leveled off.

Maybe in some areas there’s been a slight dip, but it’s been slight, if it’s dipped at all. I know here on Marco it’s flattened, but we haven’t gone down in price really at all, if at all.

Most of the investors have the mindset—they’re jumping on things like the seven-year ARM. They have high confidence they’ll be able to refinance in the next couple of years. Maybe not back down to the twos or threes, but probably the fives.

A lot of people even pencil out their numbers that way. I mean, right now, you’re getting into something maybe in the sevens, and you have to make sure the numbers work at that rate, at that payment.

But you should be forecasting as well: “What is my payment going to look like if I’m able to refi it down to five percent in a year or two?” Just to see what those numbers would look like when that time comes.

But a lot of people still have their foot on the gas. The best time to—the answer to the question, in my opinion, “When is the best time to buy real estate?”—the answer is always now.

Jeremy: Or a year ago. Or before.

Brian: Exactly. The waiting game just pays off far less often than for people who are aggressive and just get in and do it now.

Jeremy: Yeah, and I would say the thing with real estate is, like with a stock, yeah, you could time it. A stock goes up, it goes down. There’s really nothing you can do to affect that stock price.

With real estate, you can affect it. Like, if you buy a house, you put value into it, you can actually increase its value regardless. The market could go down 10%, whatever market you’re in. You could buy a house in that market, the market could go down 10%, but you could have created 20% of value. And you don’t have to spend a million dollars to create value.

You can paint the house, you can put in new hinges and door handles, you can maybe knock down a wall that’s unnecessary and open up the floor plan. You can be a value-add investor, and you can affect the outcome of your investment.

So, if you’re gonna buy, you should look for properties that you can add value to, regardless, and not have to worry about, “Oh, home prices do this, home prices do that.”

Like, screw home prices. Roll up your sleeves, and you’re going to create value. So, you think the time is always good to buy. Don’t try to time the market. But I’m curious—so a 30-year, let’s just say, a 30-year second home loan. What rates are we seeing today for that?

Brian: A 30-year second home loan? You’re in the high sevens right now on a 30-year fixed with 10% down.

Jeremy: If you go to, like, 20% down, what are you seeing? Is it a little bit lower on the rate?

Brian: No. For the 30-year fixed, you’re really the same. Yeah, you’re basically the same on rate. Maybe a quarter lower or something like that, but it’s not super significant.

Jeremy: And then on the ARM products—which, can you explain what an ARM is for those who don’t know?

Brian: Sure. An ARM is simply a loan where the interest rate is not permanently fixed. There are five-year ARMs, seven-year ARMs, ten-year ARMs… we even have a 15-year ARM.

All ARMs, typically—and with us, at least—all ARMs are amortized over 30 years, just like a 30-year fixed. But the seven-year ARM is fixed for the first seven years. After seven years, it becomes an adjustable rate.

Jeremy: And what does it adjust to?

Brian: It would basically adjust to the current market at that time. So, and there’s always a cap. Like, for ours, there’s gonna be a five percent lifetime cap. So, if you get in at seven, it can never go up any higher than 12.

Jeremy: Then 12. Okay.

Brian: They can go down just as easily as they can go up.

Jeremy: And what would they shift to after seven years? Like, would they go from seven to—can they go from seven to twelve and then stay at twelve forever?

Brian: In the first year, they could increase their entire cap, which would be that five percent, potentially. But again, it’s just going to go to whatever the current market is. So, if that is 12 and—or if it’s 14—it’s going to go to 12.

Jeremy: It’s gonna… and now, I’m assuming it is based off, like, the Fed Funds Rate?

Brian: Yeah, well, it’s actually right now based off of the LIBOR. The LIBOR has gone away. It’s the SOFR, it’s called. And so, it becomes a six-month adjustable after the seven years, or the ten years, or the fifteen years—whatever ARM terms..

Jeremy: Where it’s fixed for those first seven, or 12, or 15 years.

Brian: And then, once it becomes adjustable, it can adjust one time every six months.

Jeremy: And what is that current rate you’re seeing? Let’s say a seven-year ARM—what for that first seven years is what that looks like?

Brian: So, a lot of different things impact it. Whether it’s jumbo or non-jumbo. The rates, with ours at least, are cheaper if it’s jumbo. We have better rates for new construction. So, it’s a little difficult—I mean, I don’t wanna put out like an exact quote because it can range really from the sixes all the way to the high sevens, depending on various factors.

But depending on someone’s situation, it might be to their best interest to take the ARM over the 30-year fixed products. And we just kind of look at that on an individual, case-by-case basis and determine what’s best for that client at that time.

Jeremy: Got it. So, you really have a personalized approach to each client. Pretty… What I want to get into—what I’m curious about personally and something I’ve never done, which I feel like I have experience in a lot of different things—what I don’t have is new build.

What’s that look like? Like, for me—let’s just say, let’s just say I had an additional, I don’t know, like 15,000 or 10—let’s just say ten thousand bucks of, like, DTI I can work with additionally. What could I do from, like, a new construction standpoint? How does that work?

Brian: Well, it’s not too much different than buying a pre-build. The process is a little different. The mortgage side of it is not necessarily that much different.

As far as building experience, I have no building experience. So, I’m doing this one with a partner. My partner is a Chicago developer, so I’m kind of the silent partner. We’re in at 50/50, but he’s running the show.

So, I’m not—this is the first house that I’ve ever built too. So, I’m learning for sure as I go.

There’s a lot of advantages to building. The cost of the land and the cost of the build on this particular project will be about 2.5 million. That’s what we’ll be into it for, and right now it would be worth about 4.2. So, obviously, we’re walking into a ton of equity.

Jeremy: And what did you have to put down?

So, on the—let’s just say, let’s break it apart. When you were identifying the land, how did you finance the land itself? How did you finance the construction? Do you roll the two together, or are they like separate pieces?

Brian: Well, so we did it all at once, and that's one way you can do it—where you purchase the land and you get the construction loan all at the same time.

If you have your plans and specs in place already, then that's something you can do. In order to get the construction loan, you need to actually have all the plans and specs. Otherwise, you would buy the lot first—20% down on a lot loan, that's pretty much an industry standard.

The lot was $850K or so, $860K. 20% down on that, and then 10% down on the construction loan. Typically, depending on the loan size, it can be more than that if it's into the jumbo territory, but the equity from the lot loan is applied to—Right, so like if you put $200K down on your lot, when it comes time to do the construction loan, that's $200K in equity that you already have going into the construction model transaction.

Jeremy: Got it. So, let's say, in your example, you bought the land—let's just call it a million. So you put $200K down, and then the building cost is going to be like $1.6M…

Brian: About $1.5M.

Jeremy: $1.5M, which means you'd be all in at $2.5M. You would need $500K down to fund that. So then you would have to raise it, or you'd have to invest an additional $300K in cash to now fund this $2.5M all-in project.

Brian: About right, yeah.

Jeremy: Got it. So you're gonna put… if you put $500K—and this is where it's crazy—if it actually comes out worth $4.2M, now that $2.5M is going to go to $4.2M. So, you're gonna have $1.7M of equity in the property on an initial cash investment of $500K.

Brian: Correct, that’s what we’re hoping for. So, and we might even STR this one. It’s even up in the air. I mean, if it's still worth $4.2M in 18 months when it's built, we might just sell it. Right.

But yeah, if the market does… yeah, the market does cool and it's worth $3.5M—or, and I doubt it would go down that much, but say it did—then we're not in a hurry. We'll happily turn it into an STR until the values are back up over $4M.

And that's one thing about real estate values—you can be afraid they're going to go down, and they will go down at some point. There will be a cycle; we'll hit it at some point again where there'll be a nice dip—10% or 15%, maybe even 20%.

It will happen at some point, but it always goes back up. I mean, there's never been a time in history where they went down, and they didn't go back up. Look at 2008—look at how far values crashed in 2008.

And by five or six years later, they were back—or maybe six or seven, or seven or eight years later, they were back to where they were. And now they're double what they were.

Jeremy: Yeah, and what I said to people who were like, "Oh, is real estate gonna crash? Like, the prices are too high, yada yada," it's just like, well, are there really that many homes being built?

It's really… it's a game of supply and demand, essentially. And it's hard to build a home. And now you have more experience than I do—is it hard to build a home? I mean, you're working with a home builder, so I think that's a slight advantage you have there, but it's difficult.

Yeah, zonings and the permits—places make it very challenging to build. You're building a nice thing. You're building a multi-million-dollar house, which a lot of times developers or cities want—nice houses.

As much as everybody acts like they want affordable housing and politicians say what they need to say to get elected, it is hard to build affordable housing. It's hard. That piece of land you're on—you probably couldn’t, if you wanted to, put like a 10-unit apartment complex where you’d rent for a thousand bucks a month.

I'm sure they would have. They would have laughed at you. I mean, they would have said to the city—they would have said to, like, the locals—"Oh, we're trying to do affordable housing." Then I'm like, "Don't do that. Don't. Actually, please build a really nice, big, expensive house that costs millions of dollars."

Brian: Yeah, not a lot of affordable housing on Marco Island at the moment. But yeah.

Jeremy: Got it. So you're building a… okay, so your goal with this house is potentially to flip it.

The thing that I think is cool about building is—like, I'm very—people say, "Oh, what's a good market? Marco Island's a great market. It's a terrible market. This market is amazing." Like, for me, a lot of times it's about the right property.

I mean, obviously, having good market fundamentals is important. You don't want to see that a market has five times as many short-term rentals as it did three years ago.

And in order to do really well, the ones that are crushing it are just, like, multi-million dollar properties with all the amenities. They need the heated pools, the hot tubs, the basketball courts. Like, I'm gonna stay away from that personally.

But as long as I can be in a market, and I can have—it’s not ultra-competitive—and I know that I'm gonna have a very competitive property… but a lot of times, that means the right property.

And being able to build from the ground up gives you a huge advantage because you can customize the home to have high potential as a short-term rental. Is that something you're doing? Are you trying to make it, like, a very attractive short-term rental, or are you just trying to build the nicest home possible?

Brian: I think we're just—we're not as focused on that. Yeah, we're just trying to build a really nice home. So, and like I said, I'm along for the ride, kind of, on this deal. So, we're really just following the professional's lead. We want to make sure that it isn’t just done perfectly as an STR.

But if we do sell it, obviously, there's a good chance we’re going to be selling it to somebody as a primary—more likely than we would be selling it to somebody at that price point anyway.

Jeremy: So, it'd be a very wealthy person from, from New York, or Boston, or Chicago, or Canada, or something—who wants a second home in Florida.

Brian: Sure, or primary.

Jeremy: Or primary, I'm sure, moving there.

True. Okay. Because that gets my head spinning. I'm like, when I think about floor plans I love for short-term rentals, like, if it's a five-bedroom house, I want that basement to be the bunk area with the game room. I'm just imagining what I would do with the space.

Which, honestly, now, just based off this conversation, I want to do a new build. I want to…

Brian: Okay, I'll let you know how it goes.

Jeremy: You’ve sparked my interest. Not that you've tried to at all, but dang, that might be the next… that might be the next domain.

Brian: Maybe.

Jeremy: Yeah, I need a builder. Anyone who builds, let me know.

Brian: Ask me in six months or so. We haven’t even started. We haven’t even broken ground yet, but we’re getting close.

Jeremy: Yeah, you haven’t even broken ground yet. Okay, cool. So, you’re financing, and you’ve done construction loans, land loans for investors in that… in the past?

Brian: Oh yeah, and you can build a second home. It's really the same terms, down payment-wise, as it is on a pre-built. So, you know, 10% down—you can do it, 10%. You're gonna pay a little more for the lot, like I said—20% down on a lot loan.

But unless you go over a million dollars on the second part—I mean, construction loan—you can still do 10% down on a second home construction amount.

Jeremy: And you can still do it for a primary construction loan. Can you do 5%?

Brian:No. It’s 10%. Yeah, it’s 10%.

Jeremy: Got it. I was about to say, because then you could… I mean, you could intend to live there, and then you finish construction two and a half years later. At that point, you’ve got kids to feed.

Brian: Yeah, a lot can happen, that's for sure. Two and a half years, you can… yeah, that's the world.

Jeremy: But to me, that's a world though. That's 10% of my life right there—that's a world away.

Okay, very cool. So, what would you say to the new investors you’re talking to who, you know, maybe they haven’t… maybe they didn’t buy in 2020 and they didn’t buy in 2021? I know you said real estate always goes up, but I guess, is there a particular type of property or place or any, like, things you can see where investors are having success?

Brian: Well, I can speak a lot to my personal experience on it. I think it's very valuable to spend a little time in your property. So, like I mentioned earlier, we stay in all of our properties at least a little bit.

So, even if it is less of a personal-use thing for you and it's more of a straight business, I find a lot of value in at least being in our properties once or twice a year to live in it, feel it, and experience the good of it and the bad of it that the renters go through.

I have yet to decide whether I like single-family homes better than condos, but I think I like single-family homes better than condos.

I think HOAs are not always the funnest things to deal with. Plus, condos are actually something that's becoming very difficult to lend on in this space—condos in resort-type areas, which is where you buy second home properties by a beach or in vacation-like areas. And the condo lending is getting very difficult. So, that's another reason, maybe.

Jeremy: Is there a reason for that? I’m just curious.

Brian: Yes, pretty much all of the condos in a resort-style area are going to be deemed non-warrantable, which means you can't get a conventional loan on them. You cannot get a Fannie Mae or a Freddie Mac-backed loan.

But then, even lenders who can lend from their portfolio—where they're not lending based off of Fannie or Freddie rules—they still don't really like them in their portfolio either, just because of the transient nature of the developments.

So, a lot of lenders are just not even lending on condos in resort-style communities. So, you need to find a special type of lending, and then whenever you find a special type of lending, you pay for it with the terms.

Right. So, the more creative something is, or the more implied risk there is on the lender’s side, you’re going to pay for it as the consumer with the terms—interest rate, down payment.

A lot of these condos, you're not able to do the 10% down, second home loan. You're putting down 20%.

And you're also getting less favorable terms as far as fees and interest rates. So, single families are a lot easier to finance right now than condos. This is really—all this change has really happened in the last couple of years.

Jeremy: Got it. So, I mean, that's one change. Also, the second home loan—for a few years, their second home loan and a primary were at the same interest rate.

And then, about a year ago, they unhinged—or they unpegged them, I think that was their official terminology—and pushed it a little bit closer to an invest… or pushed it closer to an investment loan. Yeah, that's one of the changes you've seen too?

Brian: That's—so basically what they did was they were aligned as far as interest rates were concerned. They were exactly aligned with primary residences at the time.

There was a little bit more of a down payment requirement for a second home. It was 10% down, whereas, of course, conventionally you could do three and a half, or three percent, or five percent, as programs allowed.

But interest rates—they were priced the same. Now, while you can put down less money on a second home loan (10%), the pricing is the same as an investment property now. So, they used to align with primary on interest rate, and now they align with investment property.

Jeremy: Got it. Okay, but the down payment requirement is less.

Brian: That's the main advantage, yeah.

Jeremy: Got it. Okay. So, if someone is listening—buying a home versus a condo—it’s gonna be easier to get financing. So, you can do second home loans for short-term rentals, only have to put 10% down.

What are some other tangible things that you want to share from your—A) being an investor yourself, and B) being a financier for other investors?

Brian: Do you mean like as far as from the STR side or just lending tips?

Jeremy: Anything—STR, financing, investing, real estate. Give us the Brian Bockholdt keys to success. In life, too. Life as well? Family?

Brian: Yeah. Man, I don't know. That's a tough one. You caught me off guard with that one. I don’t know. I just—you’ve got to be… you’ve got to kind of be all in it, especially now.

I mean, you know, there was a time not that long ago—very recently—where it was very difficult to fail. I mean, it was almost impossible. You bought something, you threw it up, you took some pictures with your cell phone, you threw it up on Airbnb or Vrbo, and you made money, right?

And it's still an incredible investment opportunity. It's still an incredible business. And I'm more passionate about it now, even though it's far more difficult than it was a year ago or two years ago.

I’m far more passionate about it now than I was in the beginning, and I even believe in it much more now than I did in the beginning. And even though—in the beginning—it was like printing free money, you just have to do a good job now. You've got to be in that top third.

You have to. You just gotta outshine the competition. But it's not that difficult because, I mean, here on Marco Island, a lot of my competition is still taking pictures with their cell phones.

They're still not putting any… real—they're not amenetizing their units. They're not putting in any of the nice new amenities that you see. Whatever it is—whether it's arcade games, or a nice coffee station, or whatever—a lot of people are still not doing that.

So, you can't set it and forget it anymore. You've got to be hands-on. You've got to be checking your pricing. You've got to be doing research. But it's still an incredible business opportunity, investment opportunity, retirement plan, and also something to enjoy yourself.

Like I said, we do a lot of personal use. So, it's been a game-changer for us as a family. I mean, I'm here—my kids are at one… are at the house that we talked about. I'm here at the condo doing this with you. The kids are in the pool right now at the house, waiting for me to get done so we can get the jet skis in the water.

You know, there are so many reasons, man. So many reasons. It's been a game-changer—game-changer financially, and from a family aspect, and everything in between.

It's been phenomenal. Recommend it to… recommend it to everybody and anybody. It's a lifestyle, for sure.

Jeremy: Got it. So, for folks who are listening, who want to get started, want to buy their first house, maybe they don't know what their financing options are—maybe they've talked to a lender who doesn't know what they're talking about—how can they get in touch with you?

Brian: Well, I'm happy to. They just reach out to me in any capacity—email or phone number. Email or phone—and I'm happy to have a good chat. 15 minutes, go over—you can pretty much get to the bottom of someone's situation in about a 10- or 15-minute phone call. We can probably figure out just about exactly where you're at and kind of how to take the next steps from there.

Jeremy: And what is your email?

Brian: My email is Brian—B-R-I-A-N—dot M, like Michael—dot, again, B like Boy, O-C-K-H-O-L, D like David, T like Tom—@Huntington.com.

That's Huntington like it’s sound. It's spelled H-U-N-T-I-N-G-T-O-N dot com. It's a long email. Brian.m.bockholdt@huntington.com

Jeremy: Got it. Or you guys can just look up "Brian Bockholdt Huntington Bank," and he'll pop up.

Brian: I'm there. You can Google me.

Jeremy: Yeah, and yeah, definitely, if you want to know what your options are. And even for folks who, maybe, like for me—I couldn't get a loan a year ago. But I think… I think I talked to Brian about my situation, and the setup—you need two years’ tax returns, like, "This is what you need: two years' tax returns, etc., etc."

So, for folks, this is a long game. You want to put yourself in the position today to maybe get a loan next year, or get a loan the year after. Real estate—Brian's been doing it for 30 years. That's a 30-year mortgage right there. So, we're in this. We're in this for a good time, as you said, the lifestyle component. And we're in it for a long time.

So, you guys are in the right place. Brian, it's been such a pleasure having you today. Thank you so much for coming on.

Brian: Hey, man, it's been a pleasure being here, and I really appreciate you having me on. Thanks, Jeremy.

Jeremy: All right, Brian. Until next time.

Brian: All right, you bet.

Jeremy: And guys, that's it for the Short-Term Rental Pro Podcast. Stay tuned for next week!