Can you finance furniture purchases?

Question

I’m looking into Airbnb / STR in some areas where there are large houses in good condition for very reasonable prices. The biggest issue is the houses sell as UNfurnished.

It would require a $30-40k downpymt to buy these houses but then another $30-40k to decorate & furnish them nicely (this includes all furniture up to & including window treatments, hot tub, etc. Even buying many items cheap on wayfair, the cost still seems like $30-40k total to nicely furnish a large house). Also I work a full-time job so I don’t have time to drive all over the place to buy things at antique stores, estate sales, etc.

Is there a way to finance the furnishings over 10 years (at a low reasonable rate) or something so I only have to spend $30-40k in cash for house downpayment up front instead of $60-80k in cash up front for house downpayment AND furnishings? Hoping to find some creative ideas here!

Avery Carl · Answer

Check out ClearBanc! I have heard of arbitragers using them to finance the furniture for their leased STR’s.

Nancy Bachety · Answer

@Mark Miles

A couple of things you said caught my eye. You’re just starting out with STR so your calculations might be off. You don’t want to “spend” cash on necessary items when really you’d be “investing” in furnishings. Ten years to finance depreciating assets? Do you have emergency money or are your numbers too close? It could be a way to deploy your capital or it could be you don’t yet have enough capital. Can you by with zero percent introductory rate credit cards and cash flow payments!

Paul Sandhu · Answer

Most estate auctions are held on Saturdays.  Most people (like yourself) do not have a job where they work on Saturday.  Take yourself to an estate auction with a truck or trailer and your checkbook.  Estate auctions are where I buy my furniture and appliances.  Smaller things come from Wal Mart.  I used to buy appliances from Lowes and H.D. but they seem to break shortly after the warranty period has ended.  Older appliances keep chugging along.

Every market is different, but I have been furnishing 3BR houses for between $1000 to $1500.  It just depends on who is bidding against me.

My tenants are rednecks or people from Mexico that do contract work in refineries.  Welders, fitters, boilermakers and the like.  A few psychotic mutts every now and then.

Kathy Hansen · Answer

As others have said, I think you can furnish for less than you think. I furnished my second listing (2 Bd/1 Ba) for about $13,000.

John Underwood · Answer

Many furniture stores have 0% financing for several years. I have not seen 10 years though. You could do an equity line against the property and use that to purchase everything needed. That should get you 10 years.

Michael Baum · Answer

@Mark Miles, here is a statement off ClearBanc's site:

Clearbanc charges a small flat fee on our capital that ranges from 6% -  12.5% depending on how you spend the funds. This isn't an interest rate,  and this is not a loan. You always know how much you owe.

Plus they are only funding eCommerce and SaaS (Software as a Service) companies. Even though you are renting online, I doubt it will quality but you can always ask.

Looks like an interesting company. I can see some advantages to using them for small capital investments. Also, they talk a lot about "Marketing Spends" so it might just be for marketing stuff.

Michael Baum · Answer

I agree with @Ken Latchers. Our home is 2400 sqft (not sure how that compares to yours) with 3 bedrooms, a kids bunk room etc.

We furnished the whole house from butts to nuts for under 20k. That is all new mattresses, kitchen complete, washer/dryer, plates, towels, sheets and on and on.

It can be done. Frankly I wouldn't finance new furniture. I would take the time to find good used stuff. All the furniture in our home is USA made, quality pieces. You can do it!

Ken Latchers · Answer

You don't need NEW furniture. I furnished nicely 6 units (20 bedrooms, etc) for maybe $35,000. Garage sales, used furniture stores, Craigslist, moving sales, etc. All nice, no crap including four poster beds. got a lot of nice vintage pieces also. After a few months, all your new furniture will be used anyway.

It is part of my theme and green policy.

Mark Miles · Answer

@Jeffery Wilen i looked into rent to own furnishings - prohibitively expensive for a large house unfortunately. would kill cash flow.

@Lucas Carl it's in a market that has a 100+ year history of both STR and LTR. 100% legal. i've spent a lot of time doing the research on this one. there's an opportunity here to buy some houses that have historically been used as LTR (these are large houses in good condition but unfurnished of course) and turn them into STR. really good opportunity here if i can figure out how to finance the cost of furniture!!

Luke Carl · Answer

@Mark Miles Where is this property? Why STR and not LTR? Have you checked if it’s legal? Many questions to ask yourself before you worry about furniture.

In a high traffic STR market the property will come furnished because it has always functioned as an STR since the day it was built.

Can you finance furniture purchases?

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