Best way to finance my first investment/short term rental

[Shannon Green]

This will be my first investment property. It will be a short term rental property. When it comes to financing, is it best to finance this first deal as a second home/vacation home? Only 10% down payment necessary. Or, should I be in financing another way? Any advice is appreciated. I am a newbie! 

[Jeff Chisum]

Hey David.  Happy to help!  Yes the fact that the historic or estimated income can not be used can be limiting for some.  If you can get that first one under your belt you can use the income after a year then move on to do another.  Fannie and Freddie allow one individual to have ten mortgages in their name.  
A DSCR loan doesn't look at individual income. 90% of the approval is based on historic or market data that shows the property will perform at a 1:1 ratio. PITI vs Gross Rent. 20% down on that loan.

[AJ Wong]

Quote from @Shannon Green:

This will be my first investment property. It will be a short term rental property. When it comes to financing, is it best to finance this first deal as a second home/vacation home? Only 10% down payment necessary. Or, should I be in financing another way? Any advice is appreciated. I am a newbie! 

Since this original post, many lenders have expanded underwriting. There are specific HIGH LTV products that allow STR income to qualify. Have several real estate and mortgage clients re-leveraging to expand their STR or general RE portfolios. We've used several 10% down programs for higher end purchases this year.

[Theresa Holl]

For anyone struggling to get financed, I have a friend who runs a company called unbankable and it might be a good fall back for you.  Happy to introduce you if interested.

[Wesley Myers]

What interest rate is everyone seeing with a 2nd home mortgage and 10% down these days?

[AJ Wong]

Quote from @Wesley Myers:

What interest rate is everyone seeing with a 2nd home mortgage and 10% down these days?

Depending on income and loan type, likely mid 7%'s..we've been utilizing some more creative durations as well, 30 & 40 year I/O. On the other end, 15-20 terms (not with 10% down) can see a 5% handle...