How to Obtain Financing

[LaTanya Green]

Hi all. I am interested in investing in short-term rentals but don't think I will qualify for a loan right now. My annual income is around $90,000, my monthly bills add up to about $4000 and I have one mortgage but not enough equity in the home yet.

I am interested in a small container or A-frame home near a vacation area in Texas. The homes I'm looking at are $57,000 - $70,000. I also don't have land yet but want something some and affordable. Can someone please offer advice on home to obtain financing?

[Doug Smith]

The key is having the cash down and decent credit for investment property. There are programs to where you don't need to show income personally...just that the property cash flows positively. That being said, there are two items in your post that a lender like us will struggle with. 

1) Any time you're under $100K for a loan amount, it's hard for lenders to really make much on the deal. Once you get below $75K, it gets really tough. We, and most other lenders, set a minimum loan amount. Keep in mind that we're usually regulated on percentages on what we can charge. 1% of $75K is quite a bit less than 1% of $300K, but our fixed costs remain constant. Those small amounts are going to limit the lender pool. 

2) Container homes are a bear to finance. Most traditional programs struggle to do them. That, too, will limit your lender pool. 

I know that really doesn't answer the question, but those are two very important things to keep in mind. Good luck.