Financing Options for STRs

[Brandt Fanion]

I'm looking to purchase a vacation rental in the Central Florida area, most likely somewhere within an hour of Disney. I've been working closely with a couple different lenders too finance the property as a second/vacation home, to be used primarily as an investment throughout the year.

My mother is looking to retire in the next 5 years, and really hasn't developed much of a strategy for retirement. We decided we would partner together to purchase a property to build a strong STR portfolio which would serve as a retirement vehicle for her. I would manage the properties and eventually take them over, and leverage the equity to buy enough units to replace my W2.

Right now, we both make decent money and we have about 60k to get started with good credit, but not much credit history. I just purchased a primary home 2 months ago that I will use as a rental in about 12 months.

On her own, she is pre-approved for 350k. In the Kissimmee area near Disney, 350k in a community that allows STRs, we would likely be looking at SFRs older than 10-15 years.

With all of this information, to me it seems like it wouldn't be too difficult to get started in STRs, but even with 60k and the pre-approval, one lender told us it would take all of our cash to close which would leave us nothing for furnishing and reserve capital.

Based on all of this information and knowing what you might about the market, inflation, and interest rates, what would you suggest for financing options? Should we wait to save up more capital before purchasing a property? Are there better options for getting started?