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Updated about 1 year ago,

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Mike Bator
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10
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Self-funded construction of 2 STR cabins ($620k each). Want to build 100 more by 2030

Mike Bator
Posted

I've self-funded the construction of two STR cabins ($620k each; land included) in separate locations over an hour's drive apart. Both are probably in the top 0.01% of all STRs nationwide at 99.2% occupancy, $772/night even when accounting for unbooked nights as $0. This equates to $281,965/year/cabin, with revenue covering all-in costs in 26 months and profits in 43.

Naturally, I aspire to build more. The goal is at least 100 cabins by 2030, but I only have the resources to construct one more in 2024.

How would you go about financing it? Challenges I'm facing:
1. My personal DTI ratio is at 49.9%, so personally I can't take any more loans.
2. Many lenders avoid funding construction loans for an LLC in rural areas.
3. Although I receive investment inquiries from guests every 2-4 weeks, none can invest a substantial $500k+. Dealing with less substantial amounts like $50k creates more trouble than it's worth.

Ideally, I need a single investor who can engage deeply with our numbers & vision and finance the construction of 3-10 cabins at once ($2-6m). After an 8-12 month construction phase, we can refinance the cabins, freeing up to 75% of the invested cash for the next construction round. And so on.

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