Asset-based STR financing w/ no points upfront?

[Dan A.]

Has anyone worked w/ a lender that offers asset-based STR financing w/ no points upfront and low or no prepayment penalties? No problem if it would require a 20%+ down payment and reserves. Sounds like it might be a longshot based on the convos that I've had w/ lenders so far, but maybe some of you have had better luck..

[Kenneth Garrett]

@Dan A.

I've financed many LTR properties with commercial financing which is what your talking about. The names of the financing vary, but the concept is the same. It's based on the properties ability to cash flow. Lenders typically require the DSCR to be 1.25 or better. Usually you will need 25% down. I've used this method with many BRRRR projects. I used private lending to buy and rehab and refinance with commercial financing. I'm not sure the concept works the same with STR. Might have to buy it, hold it for two years to prove the income and then refinance it. I've had the best results with using small local lending institutions. Stay away from the large banks.

Good Luck.