Cash out refi for Airbnb farmhouse retreat

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Cash out refi for Airbnb farmhouse retreat

Member since 2022 · 3 posts · 0 votes

I own an Airbnb in a desirable vacation rental market. The area is more rural, however it's a desirable vacation destination and we offer a high end farmhouse retreat experience. I know rural properties can be a little tricky to navigate, but curious what max leverage would look like on a DSCR Cash out refi on a deal like this. Ideally using STR AirDnA projections as well. I own other STR's. Thanks!

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Austin ClarenceBusiness Member

Lender · Phoenix, AZ · Member since 2023 · 136 posts · 32 votes

What is the acreage? Are there any comps? I would say 75% would be fair but maybe even 80% depending on the answers above

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Andrew Zamboroski
Lender · Member since 2021 · 498 posts · 131 votes
2y
Quote from @David Pearl:

I own an Airbnb in a desirable vacation rental market. The area is more rural, however it's a desirable vacation destination and we offer a high end farmhouse retreat experience. I know rural properties can be a little tricky to navigate, but curious what max leverage would look like on a DSCR Cash out refi on a deal like this. Ideally using STR AirDnA projections as well. I own other STR's. Thanks!
Pretty niche type of project, but, certainly doable if it’s in a good STR market. Does it have any history at all to pair with projections? If so, we have had success still getting projects approved at 75% on a cashout.
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Austin ClarenceBusiness Member
Lender · Phoenix, AZ · Member since 2023 · 136 posts · 32 votes
2y
What is the acreage? Are there any comps? I would say 75% would be fair but maybe even 80% depending on the answers above
[email protected]650-906-2376
Austin Clarence with NEXA Mortgage553 Reviews
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Jacob Sherman
12 Penns Trail Suite 138 Newtown, PA 18940 · Member since 2023 · 1k+ posts · 319 votes
2y
can cashout rural to 75% no income no doc on the DSCR program . If its a short term rental and the long term rent doesn't cover the mortgage then will be a 70% no ratio
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Erik EstradaBusiness Member
Lender · Member since 2022 · 6k+ posts · 1k+ votes
2y
Quote from @David Pearl:

I own an Airbnb in a desirable vacation rental market. The area is more rural, however it's a desirable vacation destination and we offer a high end farmhouse retreat experience. I know rural properties can be a little tricky to navigate, but curious what max leverage would look like on a DSCR Cash out refi on a deal like this. Ideally using STR AirDnA projections as well. I own other STR's. Thanks!

You would realistically be looking at 60-65% max LTV on a rural property. What will be harder is the fact that it's used as an STR and a Farmhouse. You may need to consider looking at a local commercial bank.
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David Pearl
OP
Member since 2022 · 3 posts · 0 votes
2y
Quote from @Alex Hunt:

Hey David, back in January we closed a rural STR purchase in the NC mountains. Max LTV should be 75%LTV based on the basic factors, credit & DSCR.

Happy to check this out with you, if you’re still looking!
Thank you however that was a purchase. What i am talking about is a cash out refi. Was it an STR? How many acres? Marked rural on the appraisal? Did you do a 1007? If so did they use STR rents or market rate rents for the DSCR? 80% on a purchase is pretty typical, so i can see how you got 75% on a rural purchase. But cash out is different
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David Pearl
OP
Member since 2022 · 3 posts · 0 votes
2y
Quote from @Andrew Zamboroski:

Quote from @David Pearl:

I own an Airbnb in a desirable vacation rental market. The area is more rural, however it's a desirable vacation destination and we offer a high end farmhouse retreat experience. I know rural properties can be a little tricky to navigate, but curious what max leverage would look like on a DSCR Cash out refi on a deal like this. Ideally using STR AirDnA projections as well. I own other STR's. Thanks!
Pretty niche type of project, but, certainly doable if it’s in a good STR market. Does it have any history at all to pair with projections? If so, we have had success still getting projects approved at 75% on a cashout.
Owned for over a year but still working on the STR seasoning. How much seasoning do you typically look for? 1007 required? If so, using market rents or STR?
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Andrew Zamboroski
Lender · Member since 2021 · 498 posts · 131 votes
2y
Quote from @David Pearl:

Quote from @Andrew Zamboroski:

Quote from @David Pearl:

I own an Airbnb in a desirable vacation rental market. The area is more rural, however it's a desirable vacation destination and we offer a high end farmhouse retreat experience. I know rural properties can be a little tricky to navigate, but curious what max leverage would look like on a DSCR Cash out refi on a deal like this. Ideally using STR AirDnA projections as well. I own other STR's. Thanks!
Pretty niche type of project, but, certainly doable if it’s in a good STR market. Does it have any history at all to pair with projections? If so, we have had success still getting projects approved at 75% on a cashout.
Owned for over a year but still working on the STR seasoning. How much seasoning do you typically look for? 1007 required? If so, using market rents or STR?
David,

What do you mean by STR seasoning? A 1007 is ordered, but, also look at current or past rents or air dna projections.

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Alex Hunt
Lender · Member since 2022 · 441 posts · 134 votes
2y
Quote from @David Pearl:

Quote from @Alex Hunt:

Hey David, back in January we closed a rural STR purchase in the NC mountains. Max LTV should be 75%LTV based on the basic factors, credit & DSCR.

Happy to check this out with you, if you’re still looking!
Thank you however that was a purchase. What i am talking about is a cash out refi. Was it an STR? How many acres? Marked rural on the appraisal? Did you do a 1007? If so did they use STR rents or market rate rents for the DSCR? 80% on a purchase is pretty typical, so i can see how you got 75% on a rural purchase. But cash out is different

Hey David,
- Yes, it was a short-term rental (STR).
- 0.74 acreage
- The property was marked as rural on the appraisal.
- 1007 form not utilized
- 75% of AirDNA data was used for determining market rents.
- The potential loan-to-value ratio (LTV) for the cash-out refinance could range between 70-80%.
Let me know if you like to take a look at the property.
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Timothy Hero
Lender · United States · Member since 2020 · 1k+ posts · 499 votes
2y
DSCR lenders have become iffy on STR financing. I know of one who actually closes on them, but expect a higher rate. I believe they raise rates around 50 bps for STR's. They go up to 75% LTV for cash-out and rural is fine for STRs.
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Sasha MohammedPro Member
Lender · Costa Mesa, CA · Member since 2018 · 337 posts · 245 votes
2y
theoretically you could go 70% cash out on DSCR with STR income to qualify (currently considered "vacant" property), even if rural. Not every lender would allow for rural, nor STR income to qualify... but they are out there. However, the caveat to this is that there need to be acceptable comps in the area. Your property sounds to be more unique, therefor likely making it challenging to find acceptable comps. if the property is common for the area, it's likely this could be a non-issue with the right lender.
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