Question: BRRR but with a "V" in there for "Vacation" Rental?

8 Replies


The following questions are related to the BRRR strategy, but in a market where it makes much more sense to AirBnB than longterm rent.

Any insights would be appreciated, or if you know of another thread that's covered the topic, I'd like very much for you to redirect me that way. I've heard on the podcast and read about a number of examples of the BRRR strategy, but helping out a friend with this particular situation would be the first time for the rubber to hit the road for me. Thanks for any suggestions you might have!


A friend I grew up with is killing it on AirBnB. The banks he's talked to aren't willing to consider the AirBnB income in his attempts to get a a mortgage on another property. 

Managing the property himself on AirBnB, he's grossing $45K this year. He paid around $180K (FHA Loan) for the home about four-ish years ago. As a longterm rental, he'd be earning closer to $18K in his market. As long as he can manage it, it doesn't make sense to longterm rent it.

The property has appreciated with the rebound from the recession, and is now worth over $300K.


So, if banks don't like the idea of refinancing a property that doesn't have a longterm lease on it, and they're not willing to recognize the AirBnB income, what do you do? Is he talking to the wrong banks? Is he talking to the banks in the wrong way? What specifically should he say to get a bank onboard with refinancing, allowing him to pull out some of the appreciation, while not losing out on the AirBnB victory?

Thanks again for your help, and again, I'm new to the forum, so if you know of a thread that's already been created, please tag me!

Hi @Dusty Hulet ,

Good news for you and all the other AirBnB folks out there (@J. Martin tagging you).

Freddie Mac remains unwilling to sully his good name by using the word "AirBnB." But he did say this, in August of 2017, about two months ago...

It was a bit of a watershed Bulletin, that flew under the radars of many. We're starting to gain traction on the furnished rental front.

I've got one in the kitchen right now (pre-heating the oven atm), not in the Bay Area but down in SoCal right on the beach, where it's a portfolio Jumbo loan predicated mostly on AirBnB income and very little day-job income, on an exception basis with strong reserves and solid credit. 

My first Fannie/Freddie "I have no job, just AirBnB! Weeee!" loan was about a year ago.

Ask your friend to keep networking and looking around to find an investor friendly lender. All hope is not lost. 

@Dusty Hulet , he must be dealing with the wrong banks.

I own vacation rental property that's exclusively rented on airbnb / vrbo and the banks only care about the last 24 months of rent that I can prove on my federal tax returns.  I've refinanced my primary residence 3 times in the last 2 years (Bay Area, crazy appreciation) through major banks like Wells Fargo and Quicken Loans.  

I've purchased additional properties and the same rule has applied and every time they consider the income.   It goes something's like this...  provide last two years of tax returns, they check schedule E (I think- going from memory) for total rent collected.  They divide it by 12 (months) and add it to my monthly income. 

All I can think of is he's not paying taxes on it or reporting it properly. Without it being on the returns, they won't consider it regardless of printouts.

Dealing with lenders takes persistence. Your friend is going to have to preselect banks that are more amenable to this type of deal structure and then put his or her head down and contact as many financing sources as it takes. GOOD LUCK! 

There are also lenders who focus on the sharing economy. In the past few weeks, I've heard about two: ClearBanc and Loftium (Seattle only). They may have ideas or resources even if there advertised solutions don't quite fit.


I BRRRR'd my first vacation rental property and used the equity to purchase another STR and a traditional rental.

I think your friend is talking to the wrong bank(s). Have them find a good mortgage broker that deals with lots of banks/lenders. Ask an agent that you trust for a referral. Brokers have a good idea of which lenders do what types of loans and can help you to cut through a lot of the research. Naturally, there is going to be a bit of an upcharge there, but you're paying for a service so it might make sense initially.

Look for portfolio lenders, smaller banks that aren't going to sell your loan to someone else. They can be less restrictive on things like this.

@Garry C. Yes! Good mortgage brokers are also worth every penny they earn!

@Chris Mason Thanks for sharing that! That's good to hear that the big ships are changing their course on short-term rental revenue. And that's great to hear that you've been successful! Sounds like my friend needs to hit the phone a little harder.

@Mike V. Another encouraging example of making it happen with AirBnB! I'm pretty certain he's paid taxes on it, and he's been at it for two years, so what you've shared is encouraging.

@Rob Beardsley That seems to be the consensus here. Need to hit the phones/banks harder! Thanks, man!

@Yolanda Columbus Thanks for the specific reference there! I'll tell him to check out ClearBanc

@Garry C. I'll check with my agent for referrals on brokers. Great idea. Also, congrats on the successful BRRRR of your vacation rental! It's so great to hear people are getting it done!

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