STR lenders, do you have a one you've used and recommend?

Question

I am looking fotlr a vacation home, 10% down lown. Do you have any lenders you've used in would recommend?

The overall goal, is to get 10 Str properties within 7 years.

Thank you for your help.

Joseph Bafia · Answer

As @Jeff Langley mentions, location is important with lenders as not all can go to every state. We used the same bank and lender that financed our primary home (First Citizens) to purchase several STRs. You can test several banks, but we chose one where we felt the lender knew us and our situation. These were bought as 10% down 2nd home loans. We've also bought other STRs through asset based lenders, but those were 20% down.

...And also very possible to get 10 properties in 7 years. We're up to 8 in just about 2.5 years. Various strategies, partnerships, creative financing and some grinding!

Peter Mckernan · Answer

@Alex Bekeza thank you for the insight and info on this one!!

Alex Bekeza · Answer

@Peter Mckernan I'm finding that if you can muster the 25% down that there are some options emerging with significant rate advantages over Host Financial.

On that note, @Josh M., I think the trick to scaling the STRs is less about 10 low down payment options but rather a modified version of BRRRR (Air BnB style) where you can force value and recoup/re-use a fair amount of the original capital. Figure low down hard money option to cash out refi/perm debt. 10% down is likely only available via Fannie/Freddie which would get exhausted prior to reaching 10 properties.

Gerald Pitts · Answer

Find out who the other STR investors use in that area. They are the most experienced with STRs, and know about the 10% down 2nd home loan.

Josh M. · Answer

Great responses, thank you, I appreciate the encouragement and may hit you up with some questions on scaling in the future. Thanks

Peter Mckernan · Answer

Hey @Josh M. I would look into your area, I know of one (I have never used them to complete an STR purchase) that is called HOST Financial and they require 20% down. There are some portfolio investors that may do 10% down 2nd home purchases or smaller banks. This is a one time purchase as second home then you'll be bumped into 20% down after 1 time purchase. It's nice to have that ability and use that program for sure then step into 20% down.

Jeff Langley · Answer

There are many lenders out there but a lot of them have specific state licenses, so it depends on the area you buy in. May i ask how you plan to achieve 10 properties in 7 years? I’m intrigued

STR lenders, do you have a one you've used and recommend?

STR lenders, do you have a one you've used and recommend?

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