The ‘Eye Opener’

You mean I can use it for myself AND it'll make me money?

Strategy:

Short-term rental

About the Property

Property type: Single family home
Beds: 4
Baths: 3
Sq. Ft: 2900

About the Deal

Why I liked it

I mean, why wouldn’t I? It’s on a popular lake with private boat ramp access, has a pool and and outdoor kitchen, screened in porch, and needed just enough work to turn some people off.

Deal structure

JV Partnership, purchased with a non-conventional 30 yr fixed mortgage.

Deal outcome

We actually went above the listing price on this one because the numbers still made sense. TBD on the actual numbers, but even if it’s on the low end of our conservative projections, it’ll still be a big win for us.

Projected Numbers

Purchase: $392,000
Rehab/Furnishings: $30,000
Average Daily Rate: $350
Occupancy Rate: 60%

Actual numbers

Purchase: $392,000
Rehab / Furnishings: $15,000
Average Daily Rate: TBD
Occupancy Rate: TBD

Deal Outcome

Win!

Lessons Learned

1. Short term rentals are a different ballgame in just about every facet. Tax and legal structure is different, as well as financing methods and management/operations. Trust the experts in all those new areas.

2. It’s important to take time with rehab and furnishings. It’s better to wait a few weeks to launch and “lose” out on income to make sure you can continue to get guests to stay and drive up your occupancy percentage throughout your ownership.