I've been toying with getting into AirBNB's. Has anyone had success securing a loan through a bank/CU for a purely AirBNB investment?

I know my W2 income is not enough to buy a standard single family home/condo investment unless there is a lease in place. 

Can I show a bank comparable AirBNB's? 

Any strategies or success stories?

I'm assuming I'd have to buy something with a tenant in it and covert it to an AirBNB or house hack and AirBNB the other half. 

Hey Adam, banks will lend on a purely airbnb property.  I have used conventional loans for all 5 of mine.  However, they will not usually look at potential Airbnb income.  You wouldn't necessarily have to buy something with a tenant in it, but you are on the right track with that thinking.  The idea of buying a duplex and living in one side and Airbnb-ing the other is a great way to start!

@Adam Ramsey there are some conventional methods out there to purchase a property, but as mentioned previously Airbnb revenue won’t go towards your income. There is some other options out there to grow your Airbnb business like Clear Banc, which loans up to 300,000 based on future booking revenue but for this you would need to already have a active listing set up for at least 6 months. Another option is Loftium which gives you a down payment loan to purchase a house, no interest rates, no repayment. They just require you to list one bedroom in the house on Airbnb and want to split that revenue.

@Adam Ramsey  Maybe a better question is ... how do I fund my Airbnb business?  You might take it from this approach.  There are a lot more options available to business lending than a single property that's Airbnb.  

Most will probably shy away from such, but if you have a good relationship with the bank, it's more likely they would be willing to pull the trigger.

Why would you need a loan? I'm assuming it's because you intend on buying and then starting your Airbnb correct? Their is a gentleman on bigger pockets that talks about renting a property and entering that rental unit with the idea of subletting. The key is coming up with a contract to present the landlord. Showing them your place your renting is going to be insured and guaranteed payment versus a regular tenant. This way you avoid paying taxes on the properties when you own them.

Originally posted by @Adam Ramsey :

I know my W2 income is not enough to buy a standard single family home/condo investment unless there is a lease in place. 

Can I show a bank comparable AirBNB's? 

Any strategies or success stories?

I'm assuming I'd have to buy something with a tenant in it and covert it to an AirBNB or house hack and AirBNB the other half. 

 Hi Adam,

Assuming no overlays, rental income (as a traditional rental) can be 'counted' even on vacant real estate, for purchase transactions. No need for a lease if it is vacant AND it is a purchase transaction.

@Adam Ramsey

Conventional financing will take a look at the comparable rentals in the area and provide a snapshot for the income approach, but those comparable rentals will be long term rentals.  You have to have a lender that looks at short term rentals if that is what you're going to be doing and if there is a market for it.  

In many cases, the short term rentals will have a higher income number, even with a larger vacancy rate.

Most banks, though, will only use the long term number.

Stephanie

There are lenders that will allow you to utilize the STR (short term rental) income to qualify. They're far and few between, but it's do-able. Find a Broker who specializes in such loan-types, as most are going to be wholesale lenders and not accessible consumer/investor direct.

Your original post, however, seems to be asking how you can PURCHASE using AirBnB income -- this, I haven't seen yet, personally. Most that are lending based on rents received will go off of the rental comps on the appraisal report for a purchase. Those numbers will be based on market conditions and will only include long-term rental income. That doesn't always mean the property has to be occupied with a tenant in order to purchase, it just means they won't be calculating off of STR income.

If you can buy something vacant even in a strong rental market, you can refi it once you have a history of AirBnB income. 

@Adam Ramsey hey Adam, we have closed with a lender who will do 80% LTV purchase/ 75% LTV refi based on Airbnb income. No income or tax return verification or personal DTI. Interested?

What is the most advantageous way to structure your Airbnb investment properties for lenders? LLC? LLC and taxed as S corp? I have seen a few things.

@Adam Ramsey - I'd look towards a small portfolio lender.  Some may require it to be underwritten as if you were renting it by the month, but they'll have a lot more flexibility than most.  What I'm doing is buying them with hard money, getting them repaired and rented, then refinancing them with my commercial portfolio lender once I have a small tract record of rents.

Originally posted by @Michael Ablan :

@Adam Ramsey - I'd look towards a small portfolio lender.  Some may require it to be underwritten as if you were renting it by the month, but they'll have a lot more flexibility than most.  What I'm doing is buying them with hard money, getting them repaired and rented, then refinancing them with my commercial portfolio lender once I have a small tract record of rents.

 Great advice.

@Michael Ablan How long are you normally waiting to establish a rental record before refinancing? 

@Matt Grubb -  My lender isn't requiring any seasoning because of my track record and current portfolio.  I could see a lender requiring 6 months of proven results if this is your first time

@Tommy Ishida   Hi Tommy!  I'm looking to refinance an AirBnb 10 unit building with 2 years of solid income.  Please share your lender contact.  Thank you!  -Leo

@Adam Ramsey . Hi Adam. I have used a small local bank to finance two airbnb properties now. They would not do conventional loans on them, but they did offer commercial loans on them. I put 20% down on the first airbnb property earlier this year. I had enough equity in that property that my lender financed 100% of my second airbnb property I closed on in September by placing a second mortgage on the first property instead of using a down payment. My lender also used my airbnb earnings from my first property to help me qualify for the second property even though we've had it running less than a year. His financing has been way more flexible than conventional loans, and I have been pleasantly surprised with what he has helped us do.