Need Advice: Financing Vacation Home & STR

[Jordan Mummau]

Rates are low. My wife and I are considering purchasing a second home in the Florida Keys. It appears as though qualifying for a 10% down second residence loan is a pretty common program throughout the mortgage community. My question is, what's the best way to go about acquiring the property. I've bought and sold plenty of foreclosures, however the damage left after hurricane Irma in that area is a little daunting for a property I can't get eyes on. Also, I'm considering offering as-is cash on a property on the open market, however I have concerns that a lender will require more than the 10% on a secondary home when attempting to complete a cash out refinance. So although I might be able to get a better deal upfront with a cash offer, I may be laying more money out in the refinance. Our goal here is to use the property 3 to 4 times a year and rent it the rest of the year. Our bigger goal is to have a long term investment in areas that actually appreciate in value over 10,15,20 years (I understand the Fl Keys may not be the greatest investment area for us to maximize upward trajectory but selfishly we have always dreamed of having a place in the keys). Our local market is great for cash flow investment properties but lacks any type of upward appreciation or value movement (very rural market). Aside from the general questions above, if anyone has more specific knowledge around the keys, specifically Marathon and the advantages of having a stilted home vs concrete build vs modular vs ground level, how that effects insurance rates, financing etc would be greatly appreciated. 

Lastly and possibly most importantly, I'm wondering if holding this in an LLC or commercial type of loan may be better to offset the personal debt to income ratio. I understand this would probably prohibit me from getting a 10% down loan but if it allows me to show the income generated from the rents on the property to maximize the income over the debt is something I'd consider. I don't want this to have a drastic effect on my ability to continue borrowing in the future so I'm trying to figure out how to hold this asset appropriately.

Your insight in any of the above is greatly appreciated!