Looking to purchase a beachfront $1mil property in Ventura county. The neighboring property is an Airbnb and makes approx. $100,000 annually.
I am not sure if I would need to put 20% down as a conventional, 30% down as a commercial loan, or if there are any other options. Can anyone recommend a good short term vacation rental loan products? Or maybe recommend a good local bank in the area?
Real Estate Agent · Sacramento, CA · Member since 2019 · 44 posts · 38 votes
5y
Hi Amberly- depending on the structure, if its a single family residence, you may qualify for a second/vacation home loan that is a fairly common product for most lenders. I personally use a close friend and trusted lender Ross Rushton with Fairway Mortgage LLC (based out of Sacramento) whom I do nearly 80% of my client deals and use personally for my real estate purchases.
My wife and I are actually approved at the moment with Ross to purchase our first AirBnB property using the second/vacation home loan. The key is to be able to purchase outside of where you currently own your primary residence. The distance is somewhat relative and specific to your lender. That being said, this loan option allows for you to put down as little as 10% for the downpayment and allows for 5% to be gifted. Additionally, it qualifies for lower interest rate when compared to an investment property loan that can require 20-25% down.
Feel free to DM me if you want more info or if you'd like Ross' contact info to reach out. Best of luck with your purchase.
Real Estate Agent · Sacramento, CA · Member since 2019 · 44 posts · 38 votes
5y
Hi Amberly- depending on the structure, if its a single family residence, you may qualify for a second/vacation home loan that is a fairly common product for most lenders. I personally use a close friend and trusted lender Ross Rushton with Fairway Mortgage LLC (based out of Sacramento) whom I do nearly 80% of my client deals and use personally for my real estate purchases.
My wife and I are actually approved at the moment with Ross to purchase our first AirBnB property using the second/vacation home loan. The key is to be able to purchase outside of where you currently own your primary residence. The distance is somewhat relative and specific to your lender. That being said, this loan option allows for you to put down as little as 10% for the downpayment and allows for 5% to be gifted. Additionally, it qualifies for lower interest rate when compared to an investment property loan that can require 20-25% down.
Feel free to DM me if you want more info or if you'd like Ross' contact info to reach out. Best of luck with your purchase.
Real Estate Agent · Sacramento, CA · Member since 2019 · 44 posts · 38 votes
5y
One other thing, make sure to run your numbers. There's definitely a threshold on price and occupancy that make AirBnBs a lucrative investment though falling below this threshold by either being underpriced or under-occupied, can result in you having to pick up the tab to subsidize the property. This might not be a bad result as you'll have a family vacation home at a fraction of what a non AirBnB investment property would actually costs.