How to finance a 5 unit multi-family Short Term Rental?

[James Humphrey]

Hi everyone, 

We are looking into a deal to purchase a 5 unit apartment building that currently operates as a short term rental. The price is $3MM. 

I have experience using DSCR loans that calculate the STR revenue to purchase smaller single family homes. But with this being a 5 unit multi-family building most lenders do not offer a loan product that will take the STR revenue into account.

Surely I'm not the first person to come up against this so I thought I would try and leverage this forum for advice. Does anyone have experience purchasing a 5+ unit multi-family building for the sole purpose of operating it as a short term rental? And if so, how did you finance the deal? 

Thanks in advance!

[Charles Carillo]

@James Humphrey

I would suggest speaking to local banks, and credit unions. Whenever I am having an issue with financing, I normally reach out to local institutions. They are much more reasonable and are more intertwined in a community than some lender states away. The credit committee is usually made up of local people who are familiar with the market they are in. Lastly, they like building relationships. Once you find a lender that finances properties similar to yours, start building a relationship.