Looking for ways to find a short term rental

[Austin Darnell]

Hello all,

I’ve ran into an issue when looking to fund a short term rental with only around $10k down. The area I’m looking to invest in is pretty expensive (Gatlinburg). This is my first investment property, and I’m wondering if anyone has any creative ideas that I can use for funding. 
Thanks!

[Dan Maciejewski]

The easiest, and often cheapest way is to get a seller carry-back.  Also called seller/owner financing.  I say often cheapest because sellers don't usually ask the rates that hard-money lender charge.  They usually ask a percent or two above prime, which sometimes can equate to the rate a bank quotes you.  This can be the whole mortgage, or more usually in my area, the rest of the down payment to cover conventional bank financing.  They have to be willing to take second position and the loan type has to accept it in the second case scenario.

The cons of this are that most sellers don't want to take the risk, and the ones that do usually want a big down payment.

Another option is to find partners.  This is a great way to raise your price point and to get into a great house that cash flows well.  I advise having a partnership agreement before starting.  That way everyone knows their obligations, splits, exit strategies and buyout options, etc. . .