I am looking to refinance two of my STR's in Asheville, NC.
Background: I had 2 couples cabins (not actual cabins) built, finished in December, on several acres of land in Asheville, NC. I financed the deal by a 50/50 mix of construction loan and private loans. I am looking to refinance both loan types bc they are interest only. I have 3 months of performance (so DSCR isn't an option.... unless there are DSCR options with only 3 months of performance) and the cabins are doing really well (top 1% for one and top 10% for the other) - even with the huge downswing in the market. I have a couple of interested lenders but nothing in writing yet. Before I go further with discussions I wanted to see if anybody had any suggested loan types/lenders. Also, the cabins are 450 sq ft and I had an appraisal done for the construction loan within the last 12 months and if I can get 75% of LTV of that appraisal - that would be enough to pay off my lenders. Thanks!
Lender · Asheville, NC · Member since 2020 · 463 posts · 507 votes
1y
@David Aylor I live and invest here in Asheville, and we, Movement Mortgage that is, can help you with this. Our in-house DSCR programs allow for STR income qualification, and also allow for cashouts on properties that don't have a performance history or are otherwise vacant. And perhaps best of all, we don't have prepayment penalties. I'll send you my contact info in a message.
Developer · Moscow Idaho · Member since 2024 · 224 posts · 143 votes
1y
What is your debt coverage? LTV is one thing but you need to have 1.2 or 1.3 debt coverage. The other issue is STR are not like normal rentals it is a business. I would suggested you create a llc that rents your cabins and set up a llc that runs your business. Banks don't like to lend on STR. It is a business loan not a real estate loan. Go to small community banks and credit unions. Also who ever is a lender on this format will probably reach out to you. You can get rates in the 7% area.
Debt coverage is above 1.5. The property is under my LLC. I have reached out to a couple of local banks and credit unions and they seem to get continually tripped up on there being 2 properties on one piece of land. Also, I am an out of state investor and the properties are 450 sq ft which they don't like either. Good to know about the 7%. I appreciate your reply and help!
Debt coverage is above 1.5. The property is under my LLC. I have reached out to a couple of local banks and credit unions and they seem to get continually tripped up on there being 2 properties on one piece of land. Also, I am an out of state investor and the properties are 450 sq ft which they don't like either. Good to know about the 7%. I appreciate your reply and help!
What kind of bank? If it is ok by county to have two proper they should not care. are you talking to a commercial loan guy at the banks. That should be a non issue. Don’t talk to mortgage broker just commercial banker who deals with investors. Almost all banks have one. At a credit union ask for a business loan officer. Most banks done co sided STR rent as rent. It is a business. They only consider the market rent on long term leases. That is what they will use for comps. So that might be hard.
@Matthew Becker - good to know to just talk to commercial bankers. In my initial screening (not talking to a commercial banker) the bank rep tells me that 2 properties on one parcel is a problem. I will start just asking to speak to the commercial banker. Thanks!
Investor · Baltimore, MD · Member since 2019 · 168 posts · 47 votes
1y
Call the county or town zoning person. See if the lot can be subdivided, so that each cabin sits on its own parcel. If it can be subdivided, financing will become much easier....
Call the county or town zoning person. See if the lot can be subdivided, so that each cabin sits on its own parcel. If it can be subdivided, financing will become much easier....
In many counties they allow multiple building especailly if they are small. They might not even be considered dwelling units. Did you pull a permit? Is their a drain fried. I would not subdivide unless you have to becuase there are cost involved with that. You might be just fine but if you did not pull a permit then I would not talk to the county. Just go with lender that is non conventional. I am getting rates in the 7% to 7.5% now. Which is just above owner occupied.
Call the county or town zoning person. See if the lot can be subdivided, so that each cabin sits on its own parcel. If it can be subdivided, financing will become much easier....
In many counties they allow multiple building especailly if they are small. They might not even be considered dwelling units. Did you pull a permit? Is their a drain fried. I would not subdivide unless you have to becuase there are cost involved with that. You might be just fine but if you did not pull a permit then I would not talk to the county. Just go with lender that is non conventional. I am getting rates in the 7% to 7.5% now. Which is just above owner occupied.
Yes, we are fully permitted (building, septic, well, etc). I'd prefer not to subdivide bc the plan is to build another cabin in the coming years and then sell in 5-7 years.
Call the county or town zoning person. See if the lot can be subdivided, so that each cabin sits on its own parcel. If it can be subdivided, financing will become much easier....
In many counties they allow multiple building especailly if they are small. They might not even be considered dwelling units. Did you pull a permit? Is their a drain fried. I would not subdivide unless you have to becuase there are cost involved with that. You might be just fine but if you did not pull a permit then I would not talk to the county. Just go with lender that is non conventional. I am getting rates in the 7% to 7.5% now. Which is just above owner occupied.
Yes, we are fully permitted (building, septic, well, etc). I'd prefer not to subdivide bc the plan is to build another cabin in the coming years and then sell in 5-7 years.
There should be no problems. Get in a room with a commercial banker rates are better in some cases then 30 year money. Last loan I did was 6.25 when rates were 7.5. Go to community banks and credit unions in the area the cabin is located.
I am looking to refinance two of my STR's in Asheville, NC.
Background: I had 2 couples cabins (not actual cabins) built, finished in December, on several acres of land in Asheville, NC. I financed the deal by a 50/50 mix of construction loan and private loans. I am looking to refinance both loan types bc they are interest only. I have 3 months of performance (so DSCR isn't an option.... unless there are DSCR options with only 3 months of performance) and the cabins are doing really well (top 1% for one and top 10% for the other) - even with the huge downswing in the market. I have a couple of interested lenders but nothing in writing yet. Before I go further with discussions I wanted to see if anybody had any suggested loan types/lenders. Also, the cabins are 450 sq ft and I had an appraisal done for the construction loan within the last 12 months and if I can get 75% of LTV of that appraisal - that would be enough to pay off my lenders. Thanks!
It definitely sounds a little tricky. My first concern would be comparable sales available. Happy to see if we can make a DSCR loan work. We can usually use projections from air dna. Happy to connect!
I am looking to refinance two of my STR's in Asheville, NC.
Background: I had 2 couples cabins (not actual cabins) built, finished in December, on several acres of land in Asheville, NC. I financed the deal by a 50/50 mix of construction loan and private loans. I am looking to refinance both loan types bc they are interest only. I have 3 months of performance (so DSCR isn't an option.... unless there are DSCR options with only 3 months of performance) and the cabins are doing really well (top 1% for one and top 10% for the other) - even with the huge downswing in the market. I have a couple of interested lenders but nothing in writing yet. Before I go further with discussions I wanted to see if anybody had any suggested loan types/lenders. Also, the cabins are 450 sq ft and I had an appraisal done for the construction loan within the last 12 months and if I can get 75% of LTV of that appraisal - that would be enough to pay off my lenders. Thanks!
It definitely sounds a little tricky. My first concern would be comparable sales available. Happy to see if we can make a DSCR loan work. We can usually use projections from air dna. Happy to connect!
Sounds good! I'd be happy to connect - let me the best way to reach you
Lender · Asheville, NC · Member since 2020 · 463 posts · 507 votes
1y
@David Aylor I live and invest here in Asheville, and we, Movement Mortgage that is, can help you with this. Our in-house DSCR programs allow for STR income qualification, and also allow for cashouts on properties that don't have a performance history or are otherwise vacant. And perhaps best of all, we don't have prepayment penalties. I'll send you my contact info in a message.
Investor · Asheville, NC · Member since 2015 · 187 posts · 112 votes
1y
Josh at Nantahala Bank can also do this, and well. Appraisal is an issue as discussed above, with two houses on one property, finding a good appraisal is quite difficult. As also mentioned above, subdividing is a vastly better route if possible, but proceed with great caution, since subdividing can be a gigantic pain in the rear end.
Josh at Nantahala Bank can also do this, and well. Appraisal is an issue as discussed above, with two houses on one property, finding a good appraisal is quite difficult. As also mentioned above, subdividing is a vastly better route if possible, but proceed with great caution, since subdividing can be a gigantic pain in the rear end.
Good luck with it!
Thanks for the info! I'll reach out to Josh. Yes - prefer to avoid subdividing if possible