Advice/feasibility of financing first STR investment
Hello, first-time poster / potential new investor—apologies for my total lack of knowledge and experience. I'm wondering if it's possible to find financing as a first-time buyer to purchase two adjoining properties that are currently successful STRs, using one home as a primary residence while continuing to rent the other as an STR. To put it in specifics, $800k total purchase, each property produces about $67k/yr according to Awning data. I've got about $120k liquid assets. I don't have the provable income to do this as a traditional mortgage, but is it possible to find a lender for this based on the previous renters track record? What kind of financing am I looking for? Or am I barking up the wrong tree? Thanks!
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#2 Short-Term & Vacation Rental Discussions Contributor
- Olympia, WA
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#2 Short-Term & Vacation Rental Discussions Contributor
- Olympia, WA
It is a tough question @Jon Dieringer.
I want you to ask yourself if you are really ready to afford this venture.
Whatever an existing STR is pulling in right now is not indicative of future success. Most of it depends on the owner and how they manage it. STRs are a hospitality industry so you need to be at the top of your game.
One issue is that you will be relying on a single place to cover the nut so the DSCR lender will need to look at that. 800k for 67k a year isn't going to cashflow.