Short Term Rental Loans 2019-08-28T22:09:40+00:00

Vacation Rental Loans

Financing for your Short Term Rental Homes

Why should I use Klinkloans to finance my short term rental (Airbnb / VRBO / Vacation Rental) and not a regular bank?

  • We can help you close fast (as fast as 2-3 business days). This is a major advantage in a competitive buying market.
  • Private financing will help you finance renovations to the property to make it more appealing to your future customers (see our blog for more information on this!)
  • Klinkloans will allow you to maximize your cash out of your property before you do a rate/term refinance with your long term financing option.

This allows you to get back as much cash as possible for future projects, while still being able to complete your rate/term refinance.

  • Finance construction to help get your vacation rental as nice as possible
  • Begin takeout loan process
  • Once appraisal for the takeout loan is complete, we will fund remaining draw to max out your leverage up to 80% of appraised value (LTV MUST match terms of new loan. If new loan is only up to 75% LTV, we will max out your last draw at this rate).
  • Then you can complete your rate/term refinance, while still getting as much cash out of the property as possible, freeing up capital for your next project.

Example deal:

Home purchase price: $350,000. We would fund up to 80% of your purchase (giving you an initial loan of $280,000).

$100,000 total renovations (we would fund up to 75% of your renovations/construction hard costs). Giving you $75,000 construction draws

You would need to being your takeout loan / refinance process. Once your appraisal is done for the takeout loan we will fund one last remaining draw to max out your leverage up to 80% of the appraised value (LTV must match terms of your takeout loan).

Suppose the property appraises for $525,000. 80% of $525,000 is $420,000. ​This is our max loan amount that we would fund up to once the takeout appraisal is completed.

$280,000     Initial Funding
$   75,000     Construction Draws
$   65,000     Final estimated draw after appraisal to maximize value
$420,000     Total Deed of Trust Amount for Transaction.

Based on this scenario, you are receiving financing for a large portion of your purchase, and renovation with your rental, AND leaving with $25,000 cash back in your pocket!

Standard terms for Renovation loans (some transactions may vary)

  • Purchases are funded at 80% Loan to Value (LTV) or Loan to Cost (LTC), whatever is lower. Renovation financing is typically set at 75% LTC, but draws are contingent upon Unpaid Principal Balance of the loan remaining under 80% LTV at sole discretion of the lender.

Loan Amounts Loan To Cost (LTC) for Renovations Loan Terms Draw Fees PrePayment Penalty
$75,000 – $2,250,000 75% LTC – some transactions may vary Up to 12 months – extensions available None None

  • Borrowers must first spend money towards building the property, then a draw can be requested where we will reimburse based on hard costs / materials installed in the property. We are unable to lend on deposits for materials that have not yet been installed onto the property.
  • On projects with a budget of more than $80,000, we request that at least $50,000 is spent each time before a draw request is made.

Here are the items we request to process a draw:

  • Invoices for items over $1,000
  • Lien waivers for items over $5,000
  • Spreadsheet or document showing a line item breakdown of costs spent for the draw
  • An estimated cost to complete the project
  • We will either request pictures or conduct an inspection of the property verifying the items installed
I want to discuss financing my next short term rental project!

Contact us to see if we can help you overcome an obstacle and achieve your goals. 

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