., Purchase Price: $475,000 ($197.9/sq. ft.).Estimated Market Value: $402,000 ($168/sq. ft.).Financing Terms: 2% interest rate, with a 9-year balloon.Unit B Income: $2,049/month (Section 8 tenant through November 2025).Unit A Income Potential: Similar rent or higher; Section 8 cap for the area is $3,234/month.Monthly Loan Payment (P+I): $1,386.Cash Flow Breakdown (if both units are rented at $2,049/month):Gross Rent: $4,098/month.Vacancy (10%): $410/month.Operating Expenses (37.3%): $1,376/month.Net Cash Flow: $943/month.Key QuestionsWould you be comfortable paying an 18% premium for financing at 2%, especially in a market where current mortgage rates are closer to 7%?

Id keep looking if it was not an approved short sale ( even an approved short sale takes a very very long time and theres no guarantee that you will even close on the house after months of waiting). q1)There are plenty of non traditional lenders that could offer you construction financing if the numbers make sense but it will cost you with points and a higher rate.

Increase the occupancy rate to 80% or higher over the next 12 monthsto increase the value.

I would spend a few bucks on nice ads in local magazines and/or do flyers in areas that are higher income. 

This is a very common issue that it seems a lot of LO's do not understand so they push borrower's to higher priced DSCR loans. or, they are not even licensed to sell anything else.

So, yes, you'll get a lower percentage of the cash flow (which isn't that high anyway for long-term rentals like pretty much anywhere in the world, including the US) but you'll get appreciation and loan amortization.b) You successfully invest in STRs and make enough money that you don't care that much about the higher taxes.To conclusion, as a foreigner investing in Spain, with a few exceptions of specialized niches, I focus on areas that have (high) capital appreciation and short-term rental potential.Hope this helps.

Ironically the invested capital is often very similar for either. because your either investing capital in # of locations to scale, or investing capital in higher quality ie higher cost assets and operational items. 

I’m honestly surprised it’s not ranked higher in the industry.

it ignores (1) all the costs that have to be expended simply to process a transaction, and (2) the higher maintenance costs you will be incurring in that type of neighborhood. 

Most hard money lenders will want to know about your track record - if you have no experience, partnering with someone who has a track record will likely be an easier path to approval (and likely higher leverage) than applying by yourself.