“I’m going to the cabin this weekend!” How many times have you heard that from a neighbor, a friend or a workmate and thought that dream of a second home is out of reach for you. Think twice. Second homes are in reach for almost all of us. Mortgage expert Carrie Guarrero, debunks the myths around what it takes to get into your dream getaway.
Is 20% Down a Must?
It’s a common misconception that in order for you to afford a second home, you have to have plenty of money. According to our go-to mortgage expert, Carrie of Fairway Independent Mortgage, “plenty of money” is a relative term. We have good news for people looking into investing in a second home: you DON’T NEED 20% DOWN PAYMENT. The “plenty of money” aspect would have more of a role in maintenance, repairs, and affording the payment.
Second home mortgage rates are actually lower than commonly thought as long as you utilize your second home as an actual second home and not as an investment property. In fact, interest rates are very comparable to primary residences.
Three Things to Consider for Second Home Buyers
When looking into second homes or investment properties, there are three important things that Carrie highlights to her clients and these are:
- Reserves: When investing in a vacation property, Carrie cannot emphasize enough that you will always need reserves. Reserves are available funds you can use to pay your mortgage if an interruption in income does happen. You have to consider the possibility, God forbid, of temporary disability or loss of income. Carrie says that money in the bank is where magic is. You don’t need to worry if you have 6 months of reserves to subsidize your payments or debt load if something happens.
- Maintenance and repairs: Extra responsibility comes with owning a second home. A second home is an added layer of potential for maintenance and repairs as you will be maintaining two households. Costs can come out more than what you expect so make sure to plan carefully.
- Taking care of the property: This is the part that most people tend to overlook according to Carrie—regular maintenance, repairs, utilities still need to be taken care of even when life events prevent you from going to your vacation property. There are options available. In most cases, vacation property owners tend to self-organize into little communities with an association that employs a maintenance person to run around and take care of the grounds or properties. If that opportunity isn’t for you, you can always do your research. Carrie and her Fairway team help guide people through these things.
Can I Rent Out My Second Home?
With the rise of Airbnb and similar services, the trend of renting out vacation homes is on the rise. However, if you need to rent out your second home to afford it, it becomes an investment property. Investment properties and vacation properties are completely financed differently.
Your second home is a property for your own personal use.
You can occasionally rent it out but don’t count on the income. Carrie again emphasizes the importance of reserves because when you count on occasional rental income and it doesn’t happen, that could mean financial heartache.
From a financing perspective, renting out your second home once or twice a year shouldn’t be a problem.
Getting into nightly rentals or something similar, though, would qualify you for a different kind of loan. Take note that a rental home is considered a commercial property. For vacation homes, there are actually documents you have to sign indicating that you will not be renting your house on a daily basis. There’s a big difference between the two and Carrie would be more than happy to walk people through those variables.
Listen to the entire episode!
Loans Are Not as Complicated as the Media Portrays It to Be
For Carrie and her team who do loans every single day— and they’ve done a lot! — they understand that loans can sometimes be terrifying for those who are vaguely familiar. A lot of news headlines plant seeds of doubt in people’s minds. People get scared and don’t bother learning that buying a second home can actually be an option.
“Don’t disqualify yourself…don’t let that stop you. Check it out. What do you have to lose? Bottomline: people just need to pick up the phone and let’s walk through it. If the time is not right now, let’s make a plan to get where you want to be.” -Carrie Guarrero
For more information and to ask Carrie a question:
Producing Branch Manager
Some of the most amazing and successful products on the market today were invented by accident, and that applies to Ben VandenWymelenberg, founder of WOODCHUCK USA. It all started while he was a student at The U. He invented something that saved his iPhone. What he didn’t anticipate was the reaction from friends over that simple accessory. That reaction drove Ben into a business that creates beautifully designed wood products hand-crafted in Minneapolis. Today Ben takes you through Woodchuck USA’s history. From the innovative way they got their product into a college bookstore, to why their run at Target almost put them out of business. Find out the exact moment changed the course of their business, and how that moment turned Woodchuck from a business that sells wood products, into a business that has literally changed the environment through each sale by connecting people with nature.
Warning: Language used in today’s podcast may not be suitable for all audiences.
For a decade Nick Lundquist was a project manager at a large corporate bank. But then something happened. He began to feel like the work of his team went underappreciated. “My team and I did great work. We saved the company a lot of money.” He found it frustrating to go from one project to the next without feeling the benefits of the solutions they created. That’s when he realized it was time to branch out on his own, to create, problem solve and ultimately feel the results of his work – good or bad.
Nick was becoming an entrepreneur, and he took that passion and applied it to a true niche in the fitness industry. A dedicated athlete himself, Nick opened Tooth X Nail, selling hard-to-find, high end athletic apparel for cross functional fitness, weight lifting and yoga.
In this episode you’ll hear more about Nick’s decision to go out on his own, what it felt like those first few days after leaving his corporate gig, why brick-n-mortar has a place in our digital world and how his products are unique.
Welcome to the world of Nick Lundquist and Tooth X Nail on episode 56 of the Edina SW Minneapolis Advice Givers (r) Podcast!
- If you really need 20% down to finance a second home
- The 3 most important things when considering a second home
- The one thing you need before considering renting your 2nd home
- And more
Teenage ‘sisterpreneurs’, Isabel and Caroline, share the story of how making 150 bath bombs in their basement for the Uptown Art Fair grew into a nationwide frenzy carried in over 12,000 stores. Because of an ever increasing demand, the girls now locally employ 150 people to help them with their business. Additionally, they are supporting multiple causes around the world as a way of giving back.
A Little Bath History
Da Bomb Bath Fizzers are not your usual bath bombs. They’re handmade fizzing bath bombs with an exciting surprise in the middle. Sisters Isabel and Caroline came up with the idea at the ages of 10 and 11 because they weren’t satisfied with the bath bombs on the market, complaining they stained their bathtubs and felt sticky and gross. So bad they had to take showers afterwards. Definitely not fun for two young girls!
So, they started experimenting and making bath bombs in their basement. After a lot of online research and countless experiments, they perfected the recipe and added a surprise element in the middle of each—something that remains after the bath experience is over. They brought out their 150 final products to the Uptown Art Fair in 2012, sold out on their first day, and the rest was history.
Aside from turning a trial and error basement project into a multimillion business, the sisters have also coined and trademarked the term, sisterpreneur™. Sisterpreneurship is about pushing each other with respect, love and support, because at the end of the day, it’s about being a team and succeeding together.
Because of this unique entrepreneur partnership, the girls now have around 24 bath bomb types with additional seasonal or limited flavors. The details of their bombs are in their recently published book, Fizz Boom Bath!, but their creative process is basically centered around these three guiding principles:
- High quality ingredients that’s of cosmetic grade pigment that doesn’t stain and that’s good for the skin.
- It’s all about promoting fun.
- There’s a bomb for everyone.
Life Changing for the Whole Family
The sisters may be the main partners but the da Bomb journey has been life changing for the whole family as well. Huge credit goes out to the girls’ parents, Kim and Ben Bercaw. Both parents play a big role in overseeing and monitoring the business and production side of things. Even their little brother was material in coming up with their bath bombs for boys.
What’s special about these girls and their bath bombs is their low-key heroic dreams of helping out different communities across the world. The Earth Bomb is very important to the girls as partial proceeds go to various charities around the world that help clean and protect the world’s oceans.
Listen to Isabel and Caroline on the Edina-SW Minneapolis Advice Givers (r) Podcast w/Tim Murphy
The Future is Fizzy Bright
It seems like Isabel and Caroline are just on the start of a very exciting journey. As an ethical brand coupled with fun creative innovations, there seems to be just endless possibilities for these bright young ladies. College is definitely part of the near future as they’re very open to continually learn and add up to their business and life knowledge.
If there’s anything to be learned from these girls today is that, hard work, fearlessness and fun can actually be part of a very successful business equation.
Interested to purchase a bath fizzer for yourself? Find da Bomb at any of the stores listed here. For wholesale inquiries, please email email@example.com.
The Village is a community space where girl scouts and boy scouts meet, where dancers do their classes, and where birthdays, weddings and anniversaries are celebrated. It’s a community center that solely runs on donations, which happens to provide food for families. For Twin City lender Carrie Guarrero and her husband, Dan, the decision to manage The Village was easy, but introducing its mission to a community they just moved into was a little harder.
It Just Happened
Just over three years ago, Carrie and her husband Dan closed on their new home they were remodeling in Waterville, MN (Building a Dream Home Without Starting From Scratch is As Simple As a Rehab Loan). During that time, Carrie was chairing a local race and was required to attend a Waterville council meeting for a road closure related to the race. In the course of that meeting, it was announced that the Good Samaritan Nursing Home building was up for donation to any non-profit organization. Dan was serving as an Executive Pastor of a Burnsville, MN church at the time and had planned to simply commute, but Carrie shared with him the news about the Good Samaritan building thinking the conference may have interest. That set in motion the application process to receive the building on donation. Initially, they got a no and that made sense to them since they did not even live in the area yet, let alone have an active ministry. Fast forward several months, Dan resigned from his job and within 24 hours of doing that, he got an email from Good Samaritan saying that the other folks had taken a pass on the building and if Dan still wanted it, the building was his. That’s how the journey of The Village started.
Let the Community Decide
Carrie and Dan settled in the idea that they were brand new in the Waterville community, let alone brand new in the undertaking of leading a ministry. Being unfamiliar with the community’s needs, they prayed about it and opened the doors and let the community decide what it is they want to use the building for. They had a town hall style meeting, met up with the community and asked everyone’s opinion. It was a mix of skepticism and gratitude that eventually voiced out the need for a place where boy scouts and girl scouts can come to meet, a place where people can hold dance classes, a place for birthday and anniversary parties—which eventually turned out to be the place for all of these community activities.
You can do all these events on donation-based fees so there’s no set heavy fees that go with using the space. It’s perfect for any event or occasion without taking a toll on one’s budget. The Village has hosted birthday parties, anniversaries, and even weddings.
Listen to Carrie talk about The Village on the Edina-SW Minneapolis Advice Givers (r) Podcast!
Food Distribution – It Just Happened, Too!
Over time, The Village also began to function as a food distribution. Similar to how The Village started, the food drive just happened. It began when a sister ministry had excess bread and asked Dan if he wanted to take the overflow. He put the bread out on a bread rack outside The Village – some took the bread while some took photos. There was a time when cases of food came in without knowing where the food was coming from. The food sources continued to multiply and The Village now schedules a food distribution that feeds around 100 families per month.
The Village is now in operation for three years and currently accepts free will donations and provides food distribution with no questions asked. Listen to the rest of the podcast to learn more about donating and volunteering at The Village.
The Village in Waterville, MN, comes from the desire for one successful Twin Cities lender to return a favor she received years ago. Carrie Guarrero lived it. 22 years ago she was a single mom with little money for food. Her kids needed to eat, so she turned to a food shelf for help. She was grateful for the food, but will never forget how she was treated as she asked for help. 22 years later, Carrie and her husband have opened The Village, a place for community events and celebration, but more importantly, a safe, non judgmental place for a free meal. Learn about how it all started and get inspired by the impact one couple has made on an entire city. This episode is especially important for all of us who pack every hour of our day with business and family obligations. Sometimes we need to step back and think about our legacy. This is Carrie’s…