All Forum Posts by: Tyler Solomon

Lets say I want to finance the STR condo in Kentuckyville,KY.
Then I want STR lender that had experience lending STR condos in Kentuckyville,KY.
The Kentuckyville has its own set of regulation that the lender has to understand

Even not all non-QM lender can do this. As they are not approved to work in KY, for example.
I had the issue before, even when they experience financing in KY, but there's always a knowledge gap. In that sense, having a local specialized real estate agent in KY that's specializing in STR is super important.

We've found that vacation rental financing has really dried up in the past few months. The lenders who are still doing it are charging some pretty high rates (my clients have 800+ FICOs, liquidity, low DTI) and don't really understand STR ('there is no rent roll or leases'). Two years of financials on the property has also been problematic for some properties that have a shorter history than that but have significant NOI.

So, a long way of saying: I want a STR lender who I don't need to train on STR, who is in the business today and will be in it tomorrow. Business awaits that lender...

As mentioned above, it generally doesn't matter if you are trying to finance short term rental or a long term rental. The loan products are the same. The only caveat being that for a short term rental, some borrowers area able to use a 2nd home loan and put 10% down instead of an investment property loan (min. down payment of 15%). 

The no income doc / DSCR loans are treated the same regardless of whether it is LTR or STR.

@Mike Dawson please include the details on your transaction. Condotel is shorthand for a condominium complex that is used mostly for short term rentals or rented out and not occupied by owners. Depends on HOA but usually more than 50% of the units are rented out. Also, high rise condos have a lesser LTV as they are deeming higher risk.

Next is warrantability. If the condo isn't warrantable, LTVs are limited to about 65. Next is what you are doing with the condotel, living in it, renting is Short term, long term, etc. Lastly is your qualifying info. Lower FICO, minimal experience, less than 20% down payment have higher rates so considering, 10% is on the market if some of the above factors are deemed riskier.