Interview with Kai Rostcheck of Tiny House Lending
Tiny House Lending is a relatively new service aimed at matching tiny house builders and buyers with a lender. As far as I know, it is the only website created for this purpose, and the easiest way to get a tiny house loan. Founder Kai Rostcheck has been quietly improving the service, bringing new lenders on board, and I was excited to chat with him to find out more details and learn more about his future plans.
Alek: Can you tell me a bit of your background? What is your expertise and what is your history with tiny houses?
Kai Rostcheck, founder of Tiny House Lending
Kai: I can’t remember where or when I heard of Tiny Houses for the first time, but it stuck...I became one of those people who consumes videos, reads blogs and connects with people through Meetup groups and Facebook pages. As an entrepreneur, I am always looking for new ways to apply myself. And there’s something so inherent about the Tiny House Movement - the changing values and shifting socio economics that it represents - that I felt like I could find a way to contribute and make a difference.
What lead you to create tinyhouselending.com?
I was researching the movement, looking back through history and considering the modern dynamics that Jay Shafer and others introduced. I can see the change happening. We’re at a tipping point where this cottage industry is becoming mainstream. But there are obstacles, too - areas where we can certainly improve, including zoning, safety standards, insurance and access to financing. I couldn’t find anyone who was really working on the financing aspect, so I decided to take it on.
Many people see the financial aspect as a leading reason for going tiny. From your experience, what are the financial pros and cons with regards to financing/borrowing?
There are two reasons why people choose Tiny: the opportunity to live a life that’s most aligned with their personal values (which is why I created Tiny House Dating) and financial incentive. Our industry has deep roots with Do-it-Youselfers - people who have tons of gumption and know-how. I’ll often hear them say talk about “debt-slavery” and I do agree with the fundamental principle that it’s a good idea to pay cash whenever you can and save as much money as possible. The “con” to borrowing is that you have to pay interest on a loan. But in many situations people could actually save huge amounts of money by going Tiny, even if they need to borrow initially.
For example, someone paying $900/month for rent pays his or her landlord $32,400 in three years. And at the end of three years, guess what? They don’t get the money back. In fact, they have to keep paying. Forever. That’s bad economics. On the other hand, someone who financed $32,400 at 9.99% (rates vary based on consumer credit ratings, etc.) for 36 months would pay $37,620 total. That does include $5,220 in interest), but she now owns a $30k asset! Plus, even more importantly, she begins saving on rent every month.That rent savings (of $900 per month) covers the interest paid in less than six months. Everything after that is cash on hand. Those are huge “Pros” to many people.
Can you tell me more about how the service works? How does it make getting personal financing easier?
Tiny House Lending is - the easiest, fastest way to find funding for your Tiny House purchase! Instead of going bank to bank trying to find someone who understands the Tiny House movement and is willing to lend, Tiny House Enthusiast can come to our website, fill in just a little bit of information and be matched to a qualified lending network. One short application can produce multiple loan offers within just a few hours!
Are their limitations for who can get a loan? Does it vary by location, income, etc?
Potential borrowers must have good to excellent credit to apply. Loans are available up to $100k, for terms as long as 84 months. RVIA certified park model RVs loans begin as low as 2.99% APR. Other Tiny House loans (for non-RVIA certified pre-built models, or for people who want to buy materials and build themselves) can be as low as 5.99%. Our lenders serve residents of all 50 U.S. states.
Is the service safe? How can I be sure my personal and financial info is kept secure?
Tiny House Lending does not gather financial information, process loan applications or approve/deny requests. We are simply a matchmaker. Loan applications occur through our partner sites, so we are extremely cautious about who we choose to do business with.
Our lending partners have publicly posted privacy and security policies that are consistent with legal requirements. We encourage applicants to fully read terms and conditions before applying for loans or sharing personal information, in order to ensure that their transactions are secure.
What’s the next step for Tiny House Lending?
We’ll continue to expand partnerships, in order to serve as many parts of the marketas possible. Whether someone wants to buy or build their Tiny House, we want to help make it happen.
You seem to have a toe in many tiny house ventures these days. Where do you see this all going? What do you hope to accomplish in the future?
There is so much energy in this movement! Personally, I’m really inspired by the vision of Tiny House communities - I think there is huge potential there. And as I mentioned earlier, we have a lot of work to do on the cornerstones that will legitimize the industry. From there, giving people easy access to Tiny Houses becomes possible. The process of purchasing a Tiny House should be equivalent to buying a traditional home or RV. I think we’re getting closer.
What inspires you about tiny living and what are you trying to create in your own life?
I’m over-the-moon with design ideas for my own Tiny House, and excited about the range of fantastically qualified people I can call on for help. I hope to translate that dream into reality within the next year, and ultimately have a zen sanctuary that goes wherever I need it to. In the meantime, I’m working on a relocation to Portland, OR where I’ll continue to thrive personally and professionally. As for business ventures, I have several more in the works, including a pitch for a “Tiny House Dating” tv show.
If you are looking for a Tiny House loan, just visit Tiny House Lending and click “Get Started” to begin.
but once again, this is only for the upper middle class. Single Moms like me that had to work multiple jobs just to get by, have an impeccable rental history over 10 years but a mediocre credit score, won't even be looked at. Somehow the person behind the FICO score never matters. It's just more of the same. Catering to the rich that can afford this as a second home. Not really someone like me who's whole life could be changed by something like this.