Small Business Loan

[Albert Blair]

Has anyone got their real business started with a small business loan (SBA)? If so, how did your business plan look like? I’m not sure if I want to go that route. However, I do want to incorporate my properties into a business but just having a hard time trying to get started with the business concept, as well as how a website might look like. I only have one LTR but planning on scaling  in the near future with more LTRs as well as MTRs and STRs. Any help or examples would be really appreciate it. Thank you.

[Doug Smith]

Hi @Albert Blair, Unfortunately, the SBA and most banks do not back what they deem to be "Speculative Real Estate Investment" (their term, not mine) and will actually run the other way if you put that down as the purpose for your loan. Even if you're taking out a home equity line or some other form of loan from a bank, I wouldn't put that as your loan purpose. For reasons passing understanding, they and Federal regulators have been conditioned small real estate investors are bad news. They'll back large builders and developers, but not us little guys. You'll be better off putting together a little capital from friends and family and then dipping your toe in with a lender that specializes in backing investors. That doesn't mean you can't get a Fannie/Freddie loan for an investment property or possibly two, but they'll look at your global cash flow and that, sometimes, kills the deal. I hope I wasn't too discouraging.