Financing Options for an STR - Hard Money?

Question

I am looking at a $1.5M property in OR to purchase as a 2nd/Vacation home.  It is in a very hot market, and they will most likely get cash offers.  My first preference would be to purchase with a 10% down vacation home loan so I could use some money for upgrades, but I don't know if I can compete - maybe if I go way over asking.  Are there any good hard money options to pay cash and then refi down the road?  I have plenty of assets and excellent credit.  Thanks!

Brent Huling · Answer

It's not the money part, I have plenty for a 20% down payment.  More looking for options to purchase cash and then refi later on.

Matthew Crivelli · Answer

@Brent Huling

Even if you bought this property through a hard money lender you would most likely have to have an appraisal done. You would be looking at a 3 -4 week close time.

Maybe that would help you get an accepted offer? You would most likely have to put 15% - 20% down and the loan would probably be interest only for 6-12 months. You can refi out of these loans at anytime.

Jonathan Taylor · Answer

@Brent Huling A few things to note. If this is a vacation home out of state, you would need to prequalify with a conventional lender and include DTI, income and tax returns for this purchase along with location requirements (near a golf course, vacation spot, metro area, to name a few). There are lenders who can close on investment properties to be primarily used for STRs but down payments would be 20%-25% depending on the numbers of the property. Dm for specifics on this deal.

Collin Hays · Answer

Same deal. I am two blocks from my banker, and he's given me loans on the spot for properties 1100 miles away.  If you have a banking relationship, I'd start there.

Brent Huling · Answer

Thanks, this is an out of state purchase.

Collin Hays · Answer

Your best bet is your local banker.  If I need cash right now, my local banker will generally do a 60 or 90 day bank note with interest only.  Of course, I am sure there are limits to that.