Existing Airbnb-Commercial realestate ? conventional? ideas?

Existing Airbnb-Commercial realestate ? conventional? ideas?

SD · Member since 2016 · 8 posts · 3 votes

We found an Airbnb property that went on the market.  12.5 acres, a 4/2 home, and 4 cabins w/ kitchenettes and Bathrooms, and another outbuilding that has a laundry room and a full bathroom for guests (they also have some glamping type spots). asking is 925k   They are saying 109k gross income a year from the rentals (this looks to include renting the house on Airbnb), I'm still waiting on additional financials, so there's lots I don't know yet. 

We would love to add this property to our little vacation rental business. Currently, we own (and live in) a building with basically a mother-in-law apartment that we've been renting successfully for the past two years. We do not want to sell or even mortgage this building if we can help it. 

If we can make this happen, We'd like to live in the home on the new property and rent both the units out where we currently live. This would get us a larger home and office (we have 2 businesses we work from home and we need the space) and a total of 6 rental units plus the glamping spaces.  

So the question is.... what's the best way to finance this? what type of loan? commercial or residential or ??   And is there any way to do this without pulling downpayment funds out of our current home?  Or at least as little as possible, I'm over 60 now and would rather keep totally paid-off properties, paid off. TIA :)

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Real Estate Agent · Kansas City MO · Member since 2021 · 12 posts · 13 votes
5y

Your best bet is to get owner financing. Period. Figure out who they are, tell them your story and leave the banks out of it. You need the full picture from them first and foremost.

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  • Real Estate Agent · Kansas City MO · Member since 2021 · 12 posts · 13 votes
    5y

    Your best bet is to get owner financing. Period. Figure out who they are, tell them your story and leave the banks out of it. You need the full picture from them first and foremost.

  • Real Estate Consultant · Denver, CO · Member since 2021 · 661 posts · 389 votes
    5y

    @Kaloa Devine This sounds like a good opportunity if you can get some or all owner financing. On the other hand, if you do cost segregation on your existing and new property, you would likely have little to no taxes to pay for a year or more. That increase in cash-flow could pay off any loan you might have to take out to secure the new property. And, if the new property is going to be your forever home to eventually be willed to your children, you will have no recapture owed by your estate upon death. We can talk if you need more information.

  • SD · Member since 2016 · 8 posts · 3 votes
    5y

    Thanks seller financing isn't something I thought of (duh) I'm not sure it would be an option for the seller since we are solidly in a seller's market but I'll talk to the agent.

    I need to learn about cost segregation too!

  • Rental Property Investor · North Fork, NY · Member since 2016 · 1k+ posts · 631 votes
    5y

    Why can’t you get a second home mortgage?

  • SD · Member since 2016 · 8 posts · 3 votes
    5y

    @ Nancy Bachety I'm over 60 and really wanting to keep this property paid off. Personal preferance I guess. I am looking at a HELOC now and might do that if I can figure out how to pay it off ASAP. There's still a ton I dont know about this new property. The owner has this business commingled with her other business, so there's no real clear P&L on it and we still havent received the numbers we've requested. I havent given up but not holding my breath at this point.

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