Refinancing Short-Term Rentals Made Easy with Milo

In 2020, at the height of the pandemic, my client took a leap and purchased a piece of land in the scenic mountains of Georgia. He envisioned a retreat, a place to build a dream home amidst the natural beauty, and he funded the entire project himself, using cash for both the land and construction. The project culminated in a charming single-family home that not only fulfilled his dream but quickly became a successful Airbnb rental. With the property valued at $671,000 and consistently bringing in rental income, he decided it was time to leverage some of that equity.

After consulting with an advisor who was familiar with alternative lending solutions, he turned to Milo, known for specializing in DSCR loans and delivering quick, streamlined service. His property’s short-term rental structure through Airbnb—without a long-term tenant—posed a challenge, as banks tend to view Airbnb properties as higher-risk investments due to variable and seasonal income. But with the right financing approach, we could still unlock the value he had built into this beautiful mountain home.

When I first connected with him, I could tell he knew what he wanted—a cash-out refinance that would allow him to regain some of his initial investment without the constraints typically imposed by traditional banks. We discussed his goals, the potential of his property, and the specifics of a DSCR loan. A DSCR loan, unlike traditional loans, calculates the property’s debt coverage based on its own income rather than the borrower’s personal income. For my client’s Airbnb rental, this was ideal. With steady rental income from the property, we could structure a loan that assessed its earning potential directly, bypassing the need for a long-term tenant to satisfy underwriting requirements.

We moved forward with a 70% Loan-to-Value (LTV) DSCR cash-out mortgage, allowing him to retain a comfortable amount of equity in the property while accessing the cash he needed. The process was straightforward, with my client providing recent income statements from his Airbnb rentals to substantiate the cash flow. We conducted a property appraisal to confirm its $671,000 valuation and completed all necessary steps swiftly. Milo’s expertise and streamlined approach allowed us to navigate the complexities of this short-term rental property and deliver the cash-out refinance he sought.

Reflecting on the experience, my client appreciated that he didn’t have to compromise on his financial strategy due to the property’s unique use. The refinance allowed him to tap into his property’s value without the bureaucratic hurdles he’d likely encounter with traditional banks. Working with Milo, he regained flexibility and could confidently reallocate his capital for future investments—all while maintaining a successful Airbnb rental.

Milo empowered him to maximize his investment’s potential in a way that aligned with his long-term vision. That’s the difference we aim to make for every client, particularly those who need financing solutions as dynamic as their properties.

The opinions expressed in the Blog are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product.