Private Lender Terms for STRs

[Joseph Sheahan]

Does anyone have any experience with raising private money for STRs? I'm looking for a framework of terms and structure for this scenario. I have found a good amount of info on what that would look like with flips, but not for STRs. Also, does/can this work with only raising part of the money via private money and the rest via a DSCR loan? Thanks in advance!

[Robin Simon]

Quote from @Joseph Sheahan:

Does anyone have any experience with raising private money for STRs? I'm looking for a framework of terms and structure for this scenario. I have found a good amount of info on what that would look like with flips, but not for STRs. Also, does/can this work with only raising part of the money via private money and the rest via a DSCR loan? Thanks in advance!

DSCR Loans are typically great for STR purchases - however, DSCR Lenders are going to require at least some "skin in the game" - so won't be able to have a 2nd lien for the down payment. However - DSCR Loans are "LLC friendly" so can raise that capital through a partnership/LLC format.

This article published here on BP may help - sharing it here:

Short-Term Rental Loans: What Are the Options and How Do DSCR Loans Stack Up?

https://www.biggerpockets.com/blog/short-term-rental-loans-a...