Need financing for Rural New Construction of a STR

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Need financing for Rural New Construction of a STR

Chad Edwardson
Member since 2024 · 12 posts · 8 votes

i have built two STR properties since 2021 and have a third one permitted and ready to build. I own the land outright and can build the property for 225k. I'm running into the fact that the property is classified as rural so none of the lenders I have spoken to will touch a rural new construction. The exit plan is to hold in a DSCR loan. Any insight would be appreciated.

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Nick BelskyBusiness Member
Lender · Orlando, FL · Member since 2021 · 1k+ posts · 704 votes
1y

@Chad Edwardson

Are you working with a mortgage broker on this?  You simply need the right lending resources.  Rural does add a layer of difficulty but many lenders will not be concerned based on your experience, comps, and the overall numbers.  If your other experience is also in the same market, that is a compensating factor as well.  

Would be happy to dig into this with you to see what resources we have that may be able to help.

Cheers!

[email protected]
Belsky Mortgage, LLC522 Reviews
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  • Patrick Roberts
    Lender · Charleston, SC · Member since 2019 · 1k+ posts · 1k+ votes
    1y

    It's not just new construction - a lot of lenders wont do DSCR loans on rural properties, either. Make sure you can find permanent/take-out financing before beginning work, because even if you find a construction loan, you may not be able to refi out of it.

    0Reply
    • Chad Edwardson
      OP
      Member since 2024 · 12 posts · 8 votes
      1y
      Quote from @Patrick Roberts:

      It's not just new construction - a lot of lenders wont do DSCR loans on rural properties, either. Make sure you can find permanent/take-out financing before beginning work, because even if you find a construction loan, you may not be able to refi out of it.


      Thank you. I have found that to be difficult as well. I have found some DSCR options for rural.

      0Reply
  • Kody Rogers
    Lender · UT · Member since 2025 · 6 posts · 1 vote
    1y

    What state is the project in?

    0Reply
  • Erik EstradaBusiness Member
    Lender · Member since 2022 · 6k+ posts · 1k+ votes
    1y
    Quote from @Chad Edwardson:

    i have built two STR properties since 2021 and have a third one permitted and ready to build. I own the land outright and can build the property for 225k. I'm running into the fact that the property is classified as rural so none of the lenders I have spoken to will touch a rural new construction. The exit plan is to hold in a DSCR loan. Any insight would be appreciated.


    You can still refinance it on a DSCR loan as long as you have the certificate of occupancy. Depending on the property location, you could go up to 75% LTV on a Rural Property.

    [email protected]818-269-7983
    LuxePrivate Investments LLC 572 Reviews
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    0Reply
  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    1y
    Quote from @Chad Edwardson:

    i have built two STR properties since 2021 and have a third one permitted and ready to build. I own the land outright and can build the property for 225k. I'm running into the fact that the property is classified as rural so none of the lenders I have spoken to will touch a rural new construction. The exit plan is to hold in a DSCR loan. Any insight would be appreciated.

    There are a few DSCR lenders that will lend in rural areas if the numbers pan out but you need to have positive DSCR. 
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    0Reply
    • Chad Edwardson
      OP
      Member since 2024 · 12 posts · 8 votes
      1y
      Quote from @Chris Seveney:
      Quote from @Chad Edwardson:

      i have built two STR properties since 2021 and have a third one permitted and ready to build. I own the land outright and can build the property for 225k. I'm running into the fact that the property is classified as rural so none of the lenders I have spoken to will touch a rural new construction. The exit plan is to hold in a DSCR loan. Any insight would be appreciated.

      There are a few DSCR lenders that will lend in rural areas if the numbers pan out but you need to have positive DSCR. 

      yes, I’m really looking forward new construction financing in rural. 
      0Reply
  • Zach Edelman
    Lender · New York, NY · Member since 2022 · 1k+ posts · 1k+ votes
    1y

    How rural are we talking? Where is the property? There may be a path forward here depending on the answers here, especially since you have new construction experience. 

    1Reply
    • Chad Edwardson
      OP
      Member since 2024 · 12 posts · 8 votes
      1y
      Quote from @Zach Edelman:

      How rural are we talking? Where is the property? There may be a path forward here depending on the answers here, especially since you have new construction experience. 

      Dahlonega GA 30533
      0Reply
    • Erik EstradaBusiness Member
      Lender · Member since 2022 · 6k+ posts · 1k+ votes
      1y
      Quote from @Chad Edwardson:
      Quote from @Zach Edelman:

      How rural are we talking? Where is the property? There may be a path forward here depending on the answers here, especially since you have new construction experience. 

      Dahlonega GA 30533

       Do you have 12 months of short term rental history? Or any other STRs in the area with 12 months of history?

      [email protected]818-269-7983
      LuxePrivate Investments LLC 572 Reviews
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      0Reply
    • Chad Edwardson
      OP
      Member since 2024 · 12 posts · 8 votes
      1y
      Quote from @Erik Estrada:
      Quote from @Chad Edwardson:
      Quote from @Zach Edelman:

      How rural are we talking? Where is the property? There may be a path forward here depending on the answers here, especially since you have new construction experience. 

      Dahlonega GA 30533

       Do you have 12 months of short term rental history? Or any other STRs in the area with 12 months of history?

      Yes
      0Reply
    • Erik EstradaBusiness Member
      Lender · Member since 2022 · 6k+ posts · 1k+ votes
      1y
      Quote from @Chad Edwardson:
      Quote from @Erik Estrada:
      Quote from @Chad Edwardson:
      Quote from @Zach Edelman:

      How rural are we talking? Where is the property? There may be a path forward here depending on the answers here, especially since you have new construction experience. 

      Dahlonega GA 30533

       Do you have 12 months of short term rental history? Or any other STRs in the area with 12 months of history?

      Yes

       Happy to connect 

      [email protected]818-269-7983
      LuxePrivate Investments LLC 572 Reviews
      WebsiteView Page
      1Reply
  • Jaypee Pau
    Member since 2025 · 23 posts · 7 votes
    1y

    That’s awesome you’ve already built two STRs sounds like you’ve got a great system going. Rural construction loans are definitely trickier. I ran into something similar and eventually found that smaller local banks or credit unions were way more open to rural builds than the big lenders.

    Also worth checking if any lenders specialize in land + build packages in your state. Some niche lenders fly under the radar but are actually super flexible with rural or STR-type properties. Once it's built, your DSCR plan sounds solid. Good luck hope this one gets off the ground soon too.

    0Reply
    • Chad Edwardson
      OP
      Member since 2024 · 12 posts · 8 votes
      1y
      Quote from @Jaypee Pau:

      That’s awesome you’ve already built two STRs sounds like you’ve got a great system going. Rural construction loans are definitely trickier. I ran into something similar and eventually found that smaller local banks or credit unions were way more open to rural builds than the big lenders.

      Also worth checking if any lenders specialize in land + build packages in your state. Some niche lenders fly under the radar but are actually super flexible with rural or STR-type properties. Once it's built, your DSCR plan sounds solid. Good luck hope this one gets off the ground soon too.

      Thank you
      0Reply
  • Chad Edwardson
    OP
    Member since 2024 · 12 posts · 8 votes
    1y

    Yes, three properties

    0Reply
  • LaMancha Sims
    Lender · Atlanta, GA · Member since 2019 · 241 posts · 41 votes
    1y

    Hi Chad Lender Here In Georgia, Let's Connect And Discuss Your Deal.

    0Reply
  • Nick BelskyBusiness Member
    Lender · Orlando, FL · Member since 2021 · 1k+ posts · 704 votes
    1y

    @Chad Edwardson

    Are you working with a mortgage broker on this?  You simply need the right lending resources.  Rural does add a layer of difficulty but many lenders will not be concerned based on your experience, comps, and the overall numbers.  If your other experience is also in the same market, that is a compensating factor as well.  

    Would be happy to dig into this with you to see what resources we have that may be able to help.

    Cheers!

    [email protected]
    Belsky Mortgage, LLC522 Reviews
    WebsiteView Page
    1Reply
    • Chad Edwardson
      OP
      Member since 2024 · 12 posts · 8 votes
      1y
      Quote from @Nick Belsky:

      @Chad Edwardson

      Are you working with a mortgage broker on this?  You simply need the right lending resources.  Rural does add a layer of difficulty but many lenders will not be concerned based on your experience, comps, and the overall numbers.  If your other experience is also in the same market, that is a compensating factor as well.  

      Would be happy to dig into this with you to see what resources we have that may be able to help.

      Cheers!

      I’m still looking for a lender that can handle the rural aspect. Happy to talk with you 
      0Reply
  • Cathy Berg
    Member since 2025 · 7 posts · 2 votes
    1y

    Hi Chad, 

    Any updates on this? If you're still looking for a lender that'll support DSCR in Rural Areas in GA, let me know. Since you've done a couple of STR's, might be able to help or point you to the right person. Thanks!


    Cathy

    0Reply
  • Account Closed
    Lender · Los Angeles, CA · Member since 2025 · 40 posts · 17 votes
    1y

    Congrats on your STR projects! Rural new construction is tough for many lenders due to risk and few comps. Private lenders and regional banks tend to be more flexible with DSCR loans in these areas. Focus on strong rental income projections and your proven track record to build lender confidence. Persistence and exploring niche lenders usually pay off... you would have better luck in finding newer lenders that need to get their feet wet with projects and start building portfolios but more established lenders will be unlikely to weigh in.

    0Reply
  • Chad Davis
    Lender · Richmond VA · Member since 2012 · 313 posts · 33 votes
    1y

    @Chad Edwardson Were you able to source construction financing?

    0Reply
  • Alexander Oak
    Real Estate Consultant · FL · Member since 2024 · 17 posts · 5 votes
    1y

    Hi Chad, I can help you out if you are still looking. Shoot me a message!

    0Reply
  • Alton SwannPro Member
    Investor · North and South Carolina Coast · Member since 2023 · 10 posts · 2 votes
    1y

    Hey Chad,
    I'm a fellow investor based near Helen, GA and came across your post on here. Just curious—did you end up finding a lender willing to do a rural cash-out refi on a short-term rental in the mountains? I've been running into similar challenges and would really appreciate any insights or recommendations. Although millions of people visit the mountains of North GA the base it on the full time permanent resident population which makes it a challenge for a refi even with great rental numbers. It would be nice to find a true private lender who understands the GA Mountain tourism market and the high demand for more amazing and beautiful STR's like your properties. If you find a good lender that won't take your head off please let me know. Thanks

    0Reply
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