Financing Tips for Airbnbs

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What's up guys, it's James here. And in today's video, we're going to be talking about financing tips for Airbnb investing. Now this is a popular topic, this is one that I think a lot of people are gonna be interested in, because I've been getting a lot of questions about it, you know, how can you get creative with financing and purchasing Airbnb properties.

Now, this is something that I and my business partner have run into recently, where we're going out we're buying properties. And even if you have the money for a down payment, the bank at a certain point, no matter how much money you make, is going to stop lending you money. and Canada that tends to be at around five properties of the bank is just not going to give you any more mortgages. And there are reasons for that, whatever. Let's talk about how you can get around that and how you can even just get started and do some creative work around financing properties for Airbnb.

So first off, one really great way to get started with Airbnb that allows you to get started with a very small downpayment is to leverage that 5% down payment option that you can get on vacation rentals or primary residences. Now depending on how you structure your vacation rental investment, if you are buying it truly as a vacation home, you might actually be able to get 5% down on the property. Now that's one really big advantage.

And again, if you want to learn more about different options, and how you get started investing in properties for short term rental, then just click the link down below to schedule a quick chat with me, I'd love to talk more about your specific situation and see how my business partner Riley and I might be able to help you to start investing in properties for short term rental.

Now the next piece is about you know, how do you actually go about investing in properties, let's say that you don't have the money or you don't have the mortgage capability right now? Well, I only recommend using this type of strategy. If you've already got one or two of your own, you're just maxed out. If you're looking to buy the first one, I always recommend doing it with your own money. So if you want to get that first one, and you're still saving up for the downpayment, or you don't have the ability to get a mortgage right now, then you're just going to want to improve your income, improve your expenses, so you have a better cash flow to debt, you have a better debt income ratio, I make sure that you save up that money for the down payment. But let's say that you're at one or two properties, and now you're not able to get another mortgage, how do you go out and get more properties?

Well, one really great way to do this is through what I call joint venturing. It's a common term in the real estate investing world joint venturing is where you basically are going to be having an active partner, which would typically be you in this case, and then a money partner who's going to provide the money for the downpayment, renovation costs and the mortgage for the property. But other than that, they're not going to be contributing to the deal, meaning they're not the one finding the deal. They're not the one analyzing the deal.

They're not one managing the renovation, they're not the one managing the property, they are completely passive, all they're putting up is their money and their mortgage. And then you as the active partner are not putting up any money or using your own mortgage ability, but you are going and finding analyzing structuring deal going and doing any renovation the work that might be necessary setting the property up and managing it long term on Airbnb. And in exchange for doing that you basically end up getting 50% equity stake in the property, meaning that after that joint venture partner has been repaid their initial investment, any profit on the sale of the property, you guys split 5050 and any cashflow being generated from the property in the time that you hold it, you also split 5050.

And that's something that Riley and I are actually actively doing right now we're working with a few investors who are parking their money passively with us. So if that's something you're interested in, you can also reach out schedule, call with me down below in the link in the description. And you can talk more if you've got some money that you just want to passively Park and work with rally at night to put it into some short term rental properties and get a great return on your investment, then feel free to reach out we'd love to work with you there.

Or if you're planning on taking on the active partner role, then you can also schedule a call with me and we can talk to you about how to actually go about doing that. Now, again, like I mentioned, the caveat here is that if it's your very first property, I don't recommend working with other people's money and doing your very first property that way, because it's going to be challenging to get investors to work with you if you don't have a track record of success. And I just recommend going through and doing with your own money. So you have skin in the game, and you're already doing it yourself have a track record of success and then looking to go and scale using investors.

But that's the stage that you're at, you're looking to know exactly how you can work with these investors, how you find them, how you structure it, how you do all that, then just go ahead and click the link down below schedule a call with me and I can talk to you more about how we can help you scale your short term rental investing. Now those are the most common options out there. That's what I recommend. There's a lot of different options available for financing properties. You can do vendor take backs where you actually have the property owner, the seller of the property financing you similar to what you'd have with a mortgage but directly with the seller.

So you don't have to get approved for a mortgage at the bank. That's one option that can be great with the right type of property. There's also be lenders that you can go to You can get slightly higher interest rates. And if the property is the right deal, it can make sense to do that as well. I've talked to a lot of people who are getting really great cash flow cash flowing 3000 $4,000 a month on properties that they've got with the lenders, where they are paying a slightly higher interest rate, but the numbers still just make sense on it. There's also private equity.

There's all kinds of different options for getting creative with your financing on properties. You can use this for financing the renovation, you can use it for financing, all different parts of the property purchase and setup process. So there's all kinds of different options out there available to you if you want to talk more about what they are. Again, I really only recommend using these more creative options. Once you're you've already got one or two properties and are looking to scale. But if that's the stage that you're at, then go ahead and schedule that call with me, I'd love to discuss with you more.

As for anyone who is just starting out and wants to get into their very first one, I recommend financing that one yourself and going a more traditional route just to keep things simple and to get yourself set up and established. And that's when you want help with you want to work with me to be able to do that then again, click the link down the description below and I'd love to talk to you more about it. I hope this video has been helpful just kind of opening your eyes to the possibilities because I think a lot of people see financing property and real estate acquisition as just a very cut and dry one option type of play when in reality there's a whole bunch of ways to structure your deals.

And depending on the individual deal that you're looking at, there's are there always different creative ways to look at it that can make it work and be the difference between a deal not making sense and making sense. So hopefully that gave you a good overall perspective on everything. If you liked this video, if you got value from it, then just click that thumbs up button give me a like on the video. It does help me a lot with YouTube's algorithm so we can get this video seen by everyone on YouTube and get billions and billions and billions of views. It's all I want in life just click the like button I want a billion views that's all subscribe to the video, make sure you hit that subscribe button. I do post new videos every single week on this channel and I always try to bring as much value to you guys as possible.

So go ahead and click that subscribe button make sure you subscribe to the channel so you stay up to date with all the new content we post let me know if you if you have any ideas for future videos or there's stuff you want me to talk about things you want me to cover you want to see on the channel. Let me know in the comment section down below. Type it really fast. Let me know and I will see you next