AirBnB & VRBO in Small Markets

[Cody Dastrup]

THE QUESTION (s): Is there a workaround to financing a prefab as an investment property (short term rental) through a traditional lender (example https://factoryhomesoutlet.com...)? If not, is there a modular builder that is affordable and has cabin-style options? 

If you're interested in my story, here is what I am trying to do... 

Hey Everyone,

This is my first post and I am brand new to the Bigger Pockets network/world of real estate investing. I will preface what I am about to post first by saying that I have access to quite a bit of private capital and a great relationship with a lender but that I want to do this the "right way" as I am looking to scale this and help others that I care about building wealth.

The "Bad": I've identified multiple markets that have large barriers to entry including a limited supply of homes on market, significantly inflated housing prices. Markets are long-distance from a major city (lack of contractors, crew, supplies, etc.). The high level "problem" is that to buy into these markets would cost way too much and eat into revenue significantly.

Example: A cabin town in Montana that is within 20 min of Yellowstone, with 0 active listings sub $350k. 2 bed, 2 bath 1500 square foot cabin listed for $475k (.8 acres).  

The "Good": Because these markets have such large barriers to entry, there is little competition. Very few "investors" in area. No major hotels/Mdu's. Anyone buying an investment property is paying well over normal market value, thus increasing $ on nightly rental market. High demand/low supply. The land is cheap and always for sale.

Example: .62 Acre lot available for 65k currently

Opportunity: Building is too expensive and time-consuming based on a lack of supplies/labor in area. I'd like to purchase a plot of land (65k), pour a foundation (15-20k), and place a modular/prefab home on the property. The issue with prefab homes is that the bank is telling me that I cannot take out an investment loan on the property and that it would have to be listed as my primary residence. I asked about a modular home and have been told that a modular WOULD NOT be considered prefab, and that I could do a modular. Problem is that the modulars that I am finding are all "environmental companies" that are selling a product that is overpriced and frankly ridiculous options for what I am doing. (would cost the same as building).