Archive for May, 2022
Financing Vacation Rentals Made Easy
Are you ready to take your next step towards your goal of Financing Vacation Rentals, but don’t know how? If yes, and you’re looking for answers, then this blog is for you.
Short Term Rentals and Airbnb have become widespread and profitable businesses in recent years. One of the best ways to get your vacation rental business going is to surround yourself with the proper team. A vacation rental team gives you structure, direction, and freedom. A big part of your acquisition team will be the lender. Financing your vacation rentals, over just paying cash, allows you to leverage and frequently purchase more properties. But what happens when you have ‘too many mortgages’, and your loan application gets denied?
Have you been turned down by a traditional mortgage lender?
If so, Host Financial Services most of the US, and can help you qualify for a loan based on rental income.
Why should you consider Asset-Based (DSCR) Lending?
An asset-based loan also known as a DSCR loan (Debt Service Coverage Ratio) qualifies as a loan based on the property’s income rather than your own. Essentially, the property’s income should be equal to or greater than the cost of ownership (monthly principal, interest, taxes, and insurance payments).
Host Financial is an asset-based lender. Unlike a traditional lender, Host Financial makes use of the income of the asset. They also do not look at DTI, tax returns, job status, or W2s to underwrite the loan. Rather, they consider the property’s actual or projected short-term rental income, credit score, appraised value, and liquidity.
Here are some important points to know about Host Financial:
- Help rental owners make wiser decisions and do AirDNA reports right off the bat.
- They work mostly with Limited Liability Companies (LLC), so working with partners and multiple people on a deal is not an issue.
- Every asset-based loan through Host Financial requires a personal guarantor.
- One of the benefits of working with Host Financial is the ability to use the highest credit score when working with multiple borrowers or team investors.
- Turnaround time for pre-approval is the same day or next. That great deal that you find online today can be approved tomorrow.
- Underwriting approval has a typical turnaround of only 2 days.
- Still expect to do an appraisal on your asset based financing, appraisals cannot be waived.
- Contingencies can be removed within 21 days in most cases.
One thing to be aware of when writing your purchase contracts is that asset-based financing doesn’t close in 30 days. Although there is less paperwork, the typical turnaround time for this loan type is 30 to 45 days.
Qualifying for an Asset Based Loan
Our team is committed to help investors connect with the best short-term rental lenders in the business, and help make finding and financing your vacation rentals easy. The goal is to help you systemize property searches, acquisition financing, and your short term rental tasks once you acquire the investment. A strong network of nationwide lenders will make your transaction easy and efficient. Consider aligning with Host Financial and the AskAngie team to serve as your one-stop-shop for your vacation rental needs!
To see if you can qualify for that new vacation property today hop into Host Financial and click STR Revenue Calculator to confirm your ideal numbers before getting a quote to finance your next vacation rental.
Keep us posted if you’d like to write any offers in the state of California – we can help with a same-day turnaround. Just text Angie at 949-338-7408 and you’ll be on your way to owning your next investment property.
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