Seeking Advice on Financing an Airbnb/Short-Term Rental

[Frank Pyle]

My client recently purchased a home with a hard money loan and have successfully rehabbed it for use as an Airbnb rental. It has been operating for 2 months now. Our lender has informed us that we need 12 months of rental history to use the actual rent for financing purposes, or we must rely on the appraiser's fair market short term rental value. The challenge we're facing is the lack of short term rental data for the appraiser, and we won't know if it will meet the debt service coverage ratio (DSCR) requirements until the appraisal is complete.

Has anyone dealt with a similar situation? Do you have any suggestions on how we can secure long-term financing under these circumstances?

Thanks in advance for your help!

[John Underwood]

Refinance and pay the downpayment. Hopefully they have enough income without the rent to qualify.  

If not, ride out the 12 months with the hard money lender.

People have to make good choices and not over extend themselves just for the sake of buying something they really can't afford or that doesn't make good cash flow.