Updated over 7 years ago on . Most recent reply
Thoughts on financing options
Hi Everyone! I will be looking for a vacation rental property to buy, I currently own two (PA) and they do well. I left my job this year so no W2. I've heard of (1) another investor who has private lender financing to fund 100% purchase price + light rehab + furniture with 5 year term at 10%, (2) someone else who has an institutional line of credit for similar projects at 7.5%, (3) another investor who was able to raise a blind 10 yr pool of money for corporate housing properties at 6.5%. Question: this is my first time looking for funding. Where do I start looking for something like this? I did already find someone who'd do 85% LTV on the house for 7-10 yrs term (30 yr amort) at 6.5%. I just need to solve the last 15% piece + $60K for the furniture/rehab. The houses are cash flow generative so I would be able to pay down a higher than normal principal % every year. Maybe I could do a 2nd lien on the house? Any advice would be greatly appreciated!
Most Popular Reply
@Julia Bykhovskaia you need to plan accordingly. You can find 100% financing if you look. The issue you may run into is how do you refinance out of that private loan. You are going to pay high interest rates to make the purchase. You need to have the refinance details already planned out. Speak to a few conventional banks and see what they will do for you given your new financial and work situation. Other options are secured Lines of Credit. How much equity do you have and how much money can you pull out of your current portfolio. Leaving your job will pose hurdles but nothing is impossible. There is no simple answer just more research on your end.