Do you and/or your business partner own your primary residences? If you have enough equity, take out a heloc loan for the additional cash you need. Even with higher rates this will be cheaper than hard money.

Anonymous wrote:If you feel confident enough in this business model to scale it up all around the country, I'm not sure why you don't want to put any of your own money into it? I'd put down more money on the second one to get it completed ASAP, and then when you're making $50k/month off the first two, use those funds to build the next one.

Or take investors. I'd be interested to see the business plan, as a real estate investor.

That's the plan currently, slow-and-steady. We don't have any cash leftover It took us 4-5 years to save up + lucky timing in the stock market.

Anonymous wrote:This is the kind of situation where you go to an investor, not a bank.

We're trying to find investors, but to do 6 structures + two full-time salaries + operating expenses would mean $3.5-4m for half the company.

Which would mean that our half would be equivalent to three new structures 12 months from now. Anything less wouldn't make sense to us, since one structure we can do without anyone, and two structures we could potentially do with a construction loan. And so the amount we're looking for makes it very hard, especially with a single example.

Anonymous wrote:If you bring in others, they will want the majority of the profits.

No necessarily: they would want profits pro-rated relative their own investments. Conglomerates is how you make real money in real estate, bringing in investors. Majority cannot do it on their own

If you feel confident enough in this business model to scale it up all around the country, I'm not sure why you don't want to put any of your own money into it? I'd put down more money on the second one to get it completed ASAP, and then when you're making $50k/month off the first two, use those funds to build the next one.

Or take investors. I'd be interested to see the business plan, as a real estate investor.

If you bring in others, they will want the majority of the profits.

Hi Op I am in real estate myself with multiple projects looking to switch to commercial, but if it’s indeed such a great idea, would invest in vacation rental as well as equity partner. No prob to cough up 0.5mm. You won’t be able to finance it with banks even after 2 years for a number of reasons. You can email ontarioapartments at yahoo.com

This is the kind of situation where you go to an investor, not a bank.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Need more info about the unique concept to understand the target areas and risks

I can't share more details about the concept... Not until we have like 10 of those, so we can outcompete-by-experience anyone who simply has more cash... But I hear you. What's essential in broad strokes - it's not crazy-unique that it wouldn't be mortgageable. The main risk is that the economy/travel takes a hit for the worse. But we can drop rates by 70% and still be profitable.

Since you aren't giving this info. I have no idea how to help. I'd need to learn about your last 2 years of operations and profits before even beginning the discussion.

+1, OP is asking what the 1,000 piece puzzle looks like while only giving us three pieces.

Anonymous wrote:

Anonymous wrote:Need more info about the unique concept to understand the target areas and risks

I can't share more details about the concept... Not until we have like 10 of those, so we can outcompete-by-experience anyone who simply has more cash... But I hear you. What's essential in broad strokes - it's not crazy-unique that it wouldn't be mortgageable. The main risk is that the economy/travel takes a hit for the worse. But we can drop rates by 70% and still be profitable.

Since you aren't giving this info. I have no idea how to help. I'd need to learn about your last 2 years of operations and profits before even beginning the discussion.

My guess is it’s a tiny house or yurt or treehouse.

Anonymous wrote:Need more info about the unique concept to understand the target areas and risks

I can't share more details about the concept... Not until we have like 10 of those, so we can outcompete-by-experience anyone who simply has more cash... But I hear you. What's essential in broad strokes - it's not crazy-unique that it wouldn't be mortgageable. The main risk is that the economy/travel takes a hit for the worse. But we can drop rates by 70% and still be profitable.

Stuff like this is why hard money loans exist. Just think of it as part of the expense of building.

Need more info about the unique concept to understand the target areas and risks

My business partner and I came up with a unique short-term vacation rental idea and hired a general contractor to build it from scratch. It took 10 months, and our all-in costs were $528,000. We used our personal cash, no loans. It only has 2 full bedrooms and 2 other sleeping areas for a total of 8 guests. We hoped our average rate would be $350/night, yet, three months after construction, we've been 100% booked, averaging over $860/night and its trending up. Our expenses are less than 20% of the revenue. Neighborhood occupancy 10miles around us is just 46%, which is very low compared to other locations where we could copy-paste the structure.

Since this is the most significant opportunity I've ever come up with, I want to scale this up all over the US. It seemed that the next best step was to cash-out refinance? So we did that. The property was appraised at 87% of our all-in-costs, and the refinancing gave us 75% out. After all the closing costs, we have the 60% of the funds needed ($316,000). And since construction takes about 10 months, the first property would provide $26,000*80% = $208,000. Adding both together = we have the exact amount to do the second property without using personal cash.

How can we scale this faster? I would love to quit my day job, and do 5-7 of those structures, each in a different state, in the next 12 months. This will prove the model even more. We thought about construction loans, but we don't have the 2-year business tax history that most lenders require.