Financing Vacation Rental

Better have a good banker but i doubt it

You can get 100% financing but as a lender you can pledge the equity in your current property

I could lend around 75% or around $337,500 for you to outright purchase something.

Or you can pull 25% of the down payment on your current rental.

Thanks

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Will a lender 100% finance this?

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I can’t even imagine this as a remote possibility. My guess is 20-30 percent down minimum and probably on the higher end.

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I don’t want to use any of my money for a down payment.

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k then get a loan or use a LOC

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Will a lender 100% finance this?

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Looking into possible acquiring a vacation rental in Gulf Shores/Orange Beach to make half down trips a year and have the rental pay the note. I don’t want to use any of my money for a down payment. Will a lender 100% finance this? If so, advice?

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You are going to 100% finance, have personal use and still expect the rentals to cover the note? I hope it works for you, but if it were that easy everyone would do it. Taxes, HOAs, property management fees (unless you are doing the management on your own) all add up to take a significant portion of rental fees charged.

There are plenty of people on this board that have beach vacation spots and rent them. I hope they tell you this is realistic and how to achieve it because I am interested, too, if this is doable.

Without collateral, I would expect to pay 15% of the total price for a beach rental property in order to finance, 10% if it were only a second home instead of rental. With collateral instead of down payment I would expect to have to put up at least 25% of value of beach rental property being purchased.

I hope I am way off and we are both owners of beach property soon.

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18 months to retirement, zero debt, outright own $450k home, have plenty of $$$ to use as collateral as well as the home. Looking into possible acquiring a vacation rental in Gulf Shores/Orange Beach to make half down trips a year and have the rental pay the note. I don’t want to use any of my money for a down payment. Will a lender 100% finance this? If so, advice?

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For beach condos on the gulf coast you could block out November 1 to Jan 31and maybe February 28 and only lose 5-10% of your yearly total at most. Let it rent the rest of the year and come down last minute any weeks that aren't rented.

Given that, interest rates on a second home are likely going to be 8%+. You are very lucky to find ROI's right now in the 8-10% range if you pay cash.

So I would not plan on cash flowing.

Prices are wishy washy right now, they have come down and I think they 1-3 bedroom units will still come down but I've also seen a couple purchases and offers recently that really surprised me.