Creative Financing Advice

4 Replies

I have a "vacation rental" on several acres that I really want to buy for a B&B (without the breakfast) ..a dream of mine for years. The area is fabulous and I have run the numbers up and down and used AirDNA, etc......I have a pretty good feel for the deal but I need someone to help me confirm my numbers and assumptions. AND I don't have the cash to put 20% down to do conventional financing. I am wondering if there is a way to do some some creative financing with a combination of seller financing and conventional lending? This is not an "off market" deal that I can steal, rehab and have a huge increase in ARV so it probably doesn't fit the parameters of a true BRRRR. The end goal would be cash flow even if small with the appreciation over the years....and give me the joy of investing in and visiting my "happy place" often!

Also, what are the pros/cons about putting it in an LLC versus personal name.

I am open to ideas and potential lenders in the Houston market to help me on this one. It is a big stretch for me but I am willing to get creative to make it work. Thanks for any advice, tips, contacts, etc. 

Put it in an LLC for asset protection. If someone trips & falls you need to be personally protected

If it's in your personal name and someone sues you then they can come after all of your personal assets. Vs if it were in and LLC they can only go after what the LLC owns.

Yes, you can ask the seller to hold the 20% note as a 2nd lien. Hopefully your lender is OK with that...

To be honest if you don’t have the 20% to put down the. What happens if you can’t rent it for a while and have that extra payment every month. 

@Ronald Rohde I am not sure I follow what you are saying? Are you saying save up until I have the 20% then try to make it happen? If I had to scrounge up the 20% I could do so by using existing liquid cash and then by leveraging equity in another rental property....but I am trying to avoid that if I can find another creative way to do the financing. 

Originally posted by @Michelle Holmes :

@Ronald Rohde I am not sure I follow what you are saying? Are you saying save up until I have the 20% then try to make it happen? If I had to scrounge up the 20% I could do so by using existing liquid cash and then by leveraging equity in another rental property....but I am trying to avoid that if I can find another creative way to do the financing. 

 If you want no money down, can do 100% seller financing, or enter into a master lease for you to run the property as an airbnb.