Do I keep this deal alive or not?

[Alexander Jenkins]

I have my first deal under contract and it’s getting down to the wire to find financing (supposed to close next Tuesday). I have someone that would be willing to do it for 11% interest which works with the numbers I’ve ran for this home, which I plan to make a vacation rental. The only hiccup is I need about 15% down and I only have about 5% currently. I’ve considered asking for a private loan from some friends or family but I’m nervous that there is a possibility of the property not performing as well as I am planning for it to. I feel like I ran the numbers pretty conservatively and still have it grossing about 35k a year. It’s under contract for 135k which would leave my payment at a little under 1100 a month before taxes and insurance plus whatever I would have to pay per month for the additional 15k a month I would need to barrow. Plus all the other expenses.

This is my first investment and I don’t have a ton of income to support it if it doesn’t provide for itself that well. So I am stuck and I don’t know what the best route will be. Any advice would be greatly appreciated! Thanks so much!

[Craig J.]

Originally posted by @Alexander Jenkins:

@Brad Sand

Thanks, the only number (which also may be the most important) that I’m not very certain on is the occupancy rate. I actually think it will do better than 65% but I felt like that was conservative enough. I just couldn’t find accurate info and the sites I checked had info for a whole area not a the hyper local resort area I’m buying in. And it was for all size and types of places. Just not very specific. I tried reaching out to a few vacation rental owners without much luck. Maybe if I contact some of the property managers in the area I could get more accurate occupancy numbers.

I think pitching it as a 33% return (or whatever all the exact numbers I have come up with) would be a great way to present to someone willing to put up the money.

I really appreciate all your ideas!

 Just keep in mind that while 65% may sound low on occupancy, that equates with renting this place almost 5 of 7 days a week all year.