Getting into Airbnb with no money out of pocket with the AirBRRRR

[Daniel Kidd]

I saw that someone had posted something the other day about a "Turn and BRRRRN"  and was kind of upset that I hadn't posted my version of that first. Anyway I suppose I should thank them for getting me to start posting the ones I have come up with and so I hope you enjoy the AirBRRRR. Turn and BRRRRN to come later once I figure out if mine is different or not.

AirBRRRR

Any BRRRR that has roughly 5-7K of additional equity in it is a prime candidate for the AirBRRRR method. For your AirBRRRR, assuming you are using delayed financing, you will need to get a quote that will allow you to make the property flip worthy and then some and use this on the Closing Disclosure. This will allow you enough money in your rehab to get your Airbnb rolling without you having to come out of pocket after the delayed financing has come through.

• Look for BRRRR deals that have extra equity in them of roughly 5-8K after the rehab
• Educate yourself on Delayed Financing, as there is no need to do the CD quote for a Refi
• Ensure that you trust your contractor
• Airbnb rehab needs to be to a higher standard than a rental for it to be as effective as possible. Plan on not cutting any corners.
• Find an Airbnb property manager
• This is a great solution for those homes that are on the border of appraising as high as they need to for a lender to meet their minimum loan amount and not have you lose out on spending that extra amount on rehab that would likely not affect the long-term rental numbers by an equivalent amount.
• Even if you must leave cash in the deal the return on an Airbnb is generally 150% that of the same long-term rental, so even without an equity play to be made in the deal.

Ex.

PP 35K

Rehab for Long Term Rental 15K (Requires less work to get ready for long term rental)

Rehab for Short Term Rental 25K (Needs to go on Closing Disclosure for Delayed Financing to work)

ARV 80K

All in with Short Term Rental Rehab 60K, which allows for the buyer to pull out everything with the 80K ARV at a 75% LTV.