BRRRRing a Vacation Rental

[Andy Whitcomb]

Hey BP!

I am planning to buy a cabin out in the mountains to fix up and keep as a short term vacation rental. I would like to use the BRRRR strategy, but now I'm realizing that I won't have a lease to show when I refi. Has anyone ever done brrr on a vacation rental? Any recommendations on how to refi without a lease in hand?

Also, I am planning to purchase this property in an LLC, which ads another layer of difficulty to the refi.

Thanks!

[Andy Whitcomb]

@Jessica Parker

Yes I’ve looked in to getting a line of credit on my STVR properties, but I don’t think I have enough equity to get one of a decent size.

I have been doing a lot of research on lenders for vacation rentals, and I have found two that I’m going to try out.

The biggest one, and most popular is Visio lending. I have heard this is the go-to STVR lender as they qualify the loan based on current (if it's a refi) or projected (if it's a purchase) vacation rental income. They definitely make you pay for it, with higher closing costs and a higher interest-rate than a conventional loan. but other than that it seems like a great option. 75-80% LTV on purchase and 70-75% LTV on refi, and they'll refi after only 1 month of operating as a vacation rental.

The other lender is very similar from what I can tell, it’s called Host Financial. These guys only lend on vacation rentals, and from what I’ve heard they will even do rehabs. I have not yet spoken to them, but i plan to do that soon.