One of my goals for the next 365 days is to acquire two properties that I will do short-term rentals on (AirBnB and the like) and I plan to purchase them through PMLs and/or HMLs.
Do PMLs and/or HMLs usually have any stipulations on how the property is being used while there is a loan on the property - whether the tenant has to be short-term or long-term?
I ask because I'm planning out my objectives for the next few years and want to make sure I'm getting this right.
Thanks in advance.
HMLs are going to charge 10-11% interest and they only lend 70-80% of the purchase price and only for a short time such as 1 year. Can you get a 15 or 30 year bank loan after 1 year by only renting to STRs? It sounds like you might not be rehabbing your potential properties in order to add value. Is that right?
Also, try calling HMLs in your area and ask them about what are their fees and lending caps and if they lend $ for rehab work as well.
Those are great goals!!
@Jazmine Bryant . Get your finances in order and use an old fashioned conventional.
investment property mortgage. maybe 20% down.
if you can't afford it, you shouldn't be doing it. Get the stars out of your eyes and make good business decisions
It's relatively easy to get a conventional loan for an STR. I would definitely try that first before you get into hard money lending, the terms will be much more favorable for you with a conventional.
@Cheryl Vargas I think I can. I was exploring all opens thanks!!
@Ken Latchers I never said I couldn’t afford it. I’m exploring all options, making those good business decisions, you know? Thanks!
@Avery Carl okay! I didn’t know that. Thanks a lot!!
Hi @Jazmine Bryant ! If you find a currently operating STR with demonstrable revenue, you could use that as a factor in obtaining the funding.
@Michael Baum Thank you!!!