Vacation Rental Loans 2019-02-25T19:01:06+00:00

Vacation Rental Loans

Financing for your Vacation Rental Homes

Why should I use Klinkloans to finance my vacation rental property 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). All draws taken within 30 days of payoff, will be charged 30 days minimum interest.
  • 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 $475,000. 80% of $475,000 is $380,000. ​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
$   25,000     Final estimated draw after appraisal to maximize value
$380,000     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

  • We will add in an additional 20% cushion towards your loan amount that can be utilized at our discretion if costs happen to have increased. Minimum interest is not charged on this amount, interest is only charged if it is drawn.
  • 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 vacation rental project!

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

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Klinkloans Fund is a part of the Private Lending Division of Stewardship Mortgage