Anyone used SBA Loans for setting up an STR?

Question

Hey all, I'm considering an STR (my first) that requires a significant amount of rehab. About 100k. I'm wondering if I can fund 50-100k of this by using an SBA loan. Anyone ever done this before? Is it even possible?

John Crimmins · Answer

I’d be happy to Leslie. Shoot me a DM and I’ll send you his contact!

Nathan Gesner · Answer

Because you run the risk of over- leveraging. It's the exact reason so many people experienced financial difficulties in foreclosed during the last housing crisis.

Leslie Anne Morris · Answer

I am curious if you'll share your lender.  I am always looking to add to my lender line up for myself and clients.

John Crimmins · Answer

Or invest somewhere else.

Why avoid borrowing >80% on a property?

Nathan Gesner · Answer

If I understand correctly, you want to borrow more so you can use your cash to borrow somewhere else? I don't know your numbers and can't say for sure, but I would avoid borrowing more than 80% on a property.

John Crimmins · Answer

The numbers work well or I wouldn't even consider it. Let's also assume I have the funds but would rather use the cash elsewhere. Wondering if this is still possible? How long does it take to get funded?

John Crimmins · Answer

That's not a problem - and operating it as an STR is cleared with my lender. Thank you for the link!

Nathan Gesner · Answer

Make certain the numbers work, then find someone to partner with that can put up the funds. You don't want to over-leverage yourself.

Michael Baum · Answer

Hey @John Crimmins, so an SBA loan is for a operating business. You need to occupy the property at least 51% of the time.

Here are some good info - https://www.sbalenders.com/sba...

John Crimmins · Answer

My alternative is using FHA 203(k) financing, which sounds great too.