Is 10% Down for a STR reasonable for a group of Investors?

[Carter Baxter]

Me and a group of a few other investors are planning on investing in a 4br/3ba home in the Kissimmee/Davenport area in the upcoming 6 months to use as a STR. The way our financial situation is currently laid out, we are going to have four equal partner investors. We intend to put 10% down and finance the property as a second/vacation home under one of our names.

My question is: Will we reasonably be able to get financing by going about it this way? Is there anything in particular we should anticipate/do ahead of time to make the lending go smoother? 

If anybody has any experience in doing something similar please let me know! 

[Luke Carl]

No. Not at all. 10% does not go together with "group" OR "investors."   

If your group can't afford a real down payment you need a new group.

[John Underwood]

To do 10% down loan with multiple partners seems like mortgage fraud to me.

I hope no one ends up in jail.

[Carter Baxter]

@Luke Carl and @John Underwood that was my understanding too, and I certainly don't want to put myself in that kind of situation. I really appreciate your guys thoughts! Thank you much.

[Luke Carl]

Originally posted by @Carter Baxter:

@Luke Carl and @John Underwood that was my understanding too, and I certainly don't want to put myself in that kind of situation. I really appreciate your guys thoughts! Thank you much.

 I applaud your reaction! Would have been easier to be defensive. Bravo! 

[Carter Baxter]

Originally posted by @Luke Carl:

Originally posted by @Carter Baxter:

@Luke Carl and @John Underwood that was my understanding too, and I certainly don't want to put myself in that kind of situation. I really appreciate your guys thoughts! Thank you much.

 I applaud your reaction! Would have been easier to be defensive. Bravo! 

 No sense in being defensive! I'm incredibly new to STRs, at this point my portfolio is all LTR, so I'm just trying to learn as much as I possibly can! I'm thankful for folks like you who can help steer me in the right direction. 

[Scott Schuhwerk]

You will want to put down at least 20% if planning on treating this as an investment property.  10% down would be for the intentions of using the property as a second home. 

[Bruce Woodruff]

What they said.....And don't buy it it in someone's name! If you are going to have a partnership, go get it done right and file the paperwork...buy it in the new group's name. If you're gonna do this, night as well do it right, eh?