Case Study: DSCR STR Loan in Estes Park, CO

About the Deal

A borrower purchased a 1936-built mountain home on Eagle Cliff Road in Estes Park, Colorado, near the entrance to Rocky Mountain National Park.

The property had been listed near $875,000, sat on the market for more than four months, and went through three price reductions before closing at $680,000. The borrower’s plan was to operate the property as a cash-flowing vacation rental in one of Colorado’s most recognizable destination markets.

Under standard long-term rent assumptions, the deal did not qualify. Ridge Street Capital’s DSCR loan for Airbnb allowed the file to be underwritten using AirDNA short-term rental projections instead of long-term market rent. That change in income basis turned a non-qualifying file into a funded purchase through Ridge Street’s Colorado rental property financing program.

What Made It Special

The deal failed on long-term rent but qualified on STR income. Zillow’s long-term rent estimate for the property was $2,267 per month. Against a full PITIA payment of $4,123, that produced a 0.55 DSCR, which did not qualify.

AirDNA projected $4,973 per month in gross short-term renal income for comparable Estes Park listings. That income supported a 1.20 DSCR and created an $849 monthly surplus over PITIA. The income basis was the difference between a declined file and a funded loan.

The borrower bought during a price correction. Historic mountain homes near major destination demand are difficult to replace with new supply. This property became attractive after three price reductions moved the asking price from roughly $875,000 to $680,000, a 22% reduction from the original list price. At that basis, the acquisition cleared the borrower’s underwriting threshold, and Ridge Street Capital financed 80% of the purchase price. You can check our guide on Airbnb investment analysis for more information.

The loan matched the property’s actual use. This was not a suburban long-term rental. It was a vacation rental in a destination market where seasonality, nightly rates, and booking demand drive revenue. Ridge Street Capital underwrote the property using the income methodology that matched the investment strategy.

The Result

Ridge Street Capital financed a historic Estes Park vacation rental using short-term rental income projections instead of long-term market rent.

• Loan amount: $544,000
• Loan type: 5/6 ARM STR DSCR loan
• Rate: 6.8%
• LTV: 80%
• LTR DSCR, Zillow rent: 0.55, not qualifying
• STR DSCR, AirDNA income: 1.20, qualifying
• Projected monthly surplus over PITIA: $849

More About Ridge Street Capital

Ridge Street Capital provides fix-and-flip loans, DSCR rental loans, and ground-up construction financing to real estate investors across 35 states. Every deal is reviewed by a team focused exclusively on investment properties, so the underwriting questions are tied to what makes the project work.