Ideas for financing vacation rentals

[Luke Hoge]

Hi Bigger Pockets! My wife Caitlin and I are newly financially free from our real estate investments, mainly vacation rentals. Almost all of our income is from STRs with some LTR income as well. 

Because of this, it has become difficult to get financing on our most recent deal. Using a 1031 from a former property, we bought a 5br/5ba lake house in Virginia for $439,000. To do so we took out a Private loan for $351,000 which will balloon in June. Aside from the $88,000 down payment, we will have invested another $50,000 in renovations, improvements, and furnishings. When it is all said and done we will have invested over $130,000 out of pocket.

Now we are just looking for a good mortgage. This will be our 5th short Term rental and the one we are the most excited about. We cannot do another conventional loan because short term/vacation rental income doesn't offset debt in the same way that leases do, especially after all of our write-offs and tax depreciations (which we've gotten pretty good at). We also are not interested in using a Co-signer if we can avoid it. 

I have proof of income from our other Short Term rentals for 2020 all of which thrived in spite of Covid. 

Looking forward to feedback, tips, and experience! Thanks All!