Short-term Rental Financing

[Yasser Rodriguez]

Good morning, everyone.

I appreciate all of the wisdom this forum and series has provided in my life. I was hoping some more experienced people can guide me in the right direction 


I would like to target a 3/2 or so home in a beach community for purposes of using it as a short term rental.


two options:

1) personal financing via vacation home mortgages and use umbrella insurance

Con: 

You are less protected from a liability stand point and I am actually working in a field where you’re more likely to get sued overall.

2) a 2 person LLC, but financing then is limited to commercial, correct ? Can someone educate me regarding who provides good commercial lending and what your experience is with this path? What are the usual terms, % down, etc

thank you all again in advance. 

[Simmy Ahluwalia]

Quote from @Yasser Rodriguez:

Good morning, everyone.

I appreciate all of the wisdom this forum and series has provided in my life. I was hoping some more experienced people can guide me in the right direction 


I would like to target a 3/2 or so home in a beach community for purposes of using it as a short term rental.


two options:

1) personal financing via vacation home mortgages and use umbrella insurance

Con: 

You are less protected from a liability stand point and I am actually working in a field where you’re more likely to get sued overall.

2) a 2 person LLC, but financing then is limited to commercial, correct ? Can someone educate me regarding who provides good commercial lending and what your experience is with this path? What are the usual terms, % down, etc

thank you all again in advance. 

Echo Matt's comments below. Also, if you are purchasing an STR Condo, make sure to find out from the HOA if it's warrantable vs. non-warrantable. Google this if you need more clarification. And, make sure the HOA doesn't have any rental restrictions.