Private Lending for STR Deals

[Kyle Flynn]

Hello All,

I am trying to put together a STR Deal in the North GA Area, and have found multiple deals that would cash net 12-18% Cash on Cash return year one. I have some capital to put into the deal myself, but unfortunately not enough to get into a deal on my own. Also, I have a solid network of people/vendors as well as property management experience.

The last couple of weeks I have racked my brain trying to figure out different ways of making the deal happen, personal loan, business line of credit, etc. Now I am trying to find a private lender that would be willing to lend towards a short term rental/airbnb/vrbo property. 

I have up to $20,000 to put towards my next deal, and am looking at properties ranging from 150-300K. On average after factoring furnishing, renovations, downpayment, etc I would need around 30-50K to get into my next deal depending on the property.

More than anything I want to get my next deal done within the next couple of months, and I could really use some insight or connections. 

Thank you!

[Nick Belsky]

@Kyle Flynn

You are going to need at least 20% for an STR with private money if not 25%. $20,000 will only get you to about $100,000 valued property.

Lenders who are experts with STR use AirDNA to qualify rents if no 12 month history is available. They also don't jack the rates up just for being an STR versus their LTR rates. I work with several who are experts with STR and offer reasonable loan terms.

Be careful as you search. Many will tell you they can do STR then fall out last minute or overcharge you for everything. STRs are no different than LTR other than how you qualify the rental income. That's it. Anyone who tells you otherwise is full of it. Even worse, some will tell you its a STR program but it's actually a No Ratio program. These are great programs for many reasons, but not for STRs. There are too many other options out there that still run right along with LTR rates and costs compared to a No Ration loan.

Cheers!