Vacation Rental Business Plan

[Nicole Jones]

I am in the process of beginning a business plan for a few private lenders. This is for a vacation rental business in a huge tourist spot in California. From the lenders perspective... what would be the most important items that you would want to see? What medium is preferred (video, power point, plain old portfolio etc.) What sections/topics/highlights are most desired? How long or short should it be? This is for a short term hard money loan until I refinance. I understand that any lenders primary concern is their return but how would I convey this the most succinctly? I am looking around the $500,000- $700,000 range depending on a few factors to be determined this week.  

[Michael Seeker]

Most lenders/investors I've dealt with want to know the risks and exactly when and how they are going to get their money back. The financials are certainly an important piece, but if you are borrowing from somebody, they want to know that your business can afford to service the loan but also that the principle will be recoverable. Is this loan going to be secured by property? If yes, at what LTV?

What is your exit plan?  You mention a short-term loan and refinancing, however have you had conversations with any commercial lenders to determine what sort of requirements they have for loans on short term rentals?  What if you're not able to get financing, how do you plan to make your investors/lenders whole?