I am searching high and low for funding for my first short term rental. I am under contract, and the first lender I used to get the pre-qual denied the deal once all documentation was submitted. I'd been working with Lending Home. They denied the loan because the property is classified as rural. Which, in their definition, means there are not 10 comps within 1 square mile. Those are some very tight requirements!
The property is located in Burnsville North Carolina, which is a small mountain town outside of Asheville. It's a great spot for fishing, cabin-ing, and enjoying Western NC. It's located in a small community which already has 2 or 3 successful STRs operating.
Here is who I have tried working with so far, and why they also denied the loan:
Lending Home: too "rural" (not 10+ comps within 1 square mile)
Visio: their minimum square footage is 750, and this cabin is 600
Lima One: do not presently loan on short term rentals
Finance of America: if property is vacant, they'd require long term (30+ day) lease to be signed within the first 3 months. after this time period, they do not check whether the property is being rented short or long term. BUT, they also denied due to the property being '"too rural".
Corevest: they offer a 12 month bridge loan which is the closest thing i've found to working. after that time i'd need to refi into something else. the rates are 6-7% which does still mean the numbers make sense. i'm considering this option..
I have not pursued conventional loans because my partner and I would like to keep this property vested under our entity. Thanks for any help, amigos!!!
