Experienced AirBnB Operator Looking For JV/Funding Partner

[Marc Phelps]

I currently operate 5 short term vacation rental units in the Savannah, GA market. My current units are all leased units (I lease them specifically to rent out on Airbnb) and I would like to add some units that will build equity.  Forgive the length of my post, I hope to provide enough details to trigger conversation and help folks determine if this might be a good fit.  No one likes "I need 90k for a house in NY" posts.

The Plan:

We will buy and rehab (as necessary) homerun deals in 3-4 key markets chosen using historic data from airdna.co. Currently, the short list of markets includes Savannah, Atlanta, Charleston, Indianapolis, Louisville, and Cincinnati. That list is flexible.

We will buy units with proper zoning for Airbnb at prices that meet my proprietary Airbnb cashflow ratios and are good buys for a potential plan b or c (in case regulations threaten Airbnb operation). In order to purchase a property it must meet all of the following requirements:

• 1)Positive cash flow using Airbnb
• 2)Positive cash flow for long term rental (plan b)
• 3)80% cost to ARV

These units will be purchased, set up and licensed to rent on Airbnb, then refinanced and turned over to my operations model. It takes about 3-4 months per unit to do this so growth is based on available capital… ie how many units we can afford to work on at a time. We can call it the "Air-BRRR" strategy.

About Me:

I worked as a Realtor for a few years, specializing in multi-family, before starting a successful energy sales company in 2007. I sold that company and have been working in telecom since 2014, negotiating wiring rights and easements in new developments. Throughout my career, I have continued to invest in various real property asset types including tax liens, flips, mobile homes, and land. I have probably been involved in around 100 real estate deals as an owner or partner and dozens more as an agent or employee.

My credit is great and I have a little cash. I would like to work with a partner to enable quicker growth than I could achieve on my own and spend less time working out financing details on each unit.

The Numbers:

Of course, we can always convert these units into long term rentals that cash flow a little on a 30 year note but the great numbers are in Plan A… Airbnb. Here is a breakdown of what a standard Airbnb deal might look like (and there are plenty like this available in many markets).

Purchase Price: $120,000

Rehab Costs: $20,000

ARV: $180,000

Average Monthly Revenue: $2,800

Average Monthly Expenses (non-debt service): $500

30 Year Debt Service Payment: $530-$675

Cap Rate: 20.5%

Cash on Cash ROI w/20%dn: 78%

My Ask:

I’m looking for a partner to help fund these deals through launch until they are stable. I’m flexible on the exact set up depending on your investment goals. We can set it up to cash out your investment with the refi. You can participate in the returns long term and hold equity. We could work out something creative that fits you. If you have access to capital exceeding $200k, lets talk and see if we are a good fit for each other. I would like to meet face-to-face and ‘date’ before we marry ourselves to any deals. I am not interested in a hard-money-type relationship that involves paying huge points on each unit. My problem isn’t the lack of credit availability, the challenge is flexibility and scalability.

If you are interested or have questions, lets chat. I’m happy to answer questions privately or in this open forum. 

[Marc Phelps]

The numbers are conservatively round based on historical data and match up with my experience at the 5 units I have in Savannah.  The historical data is available through a third party (airdna.co) and gives comp data from nearby airbnb listings like rental rate and occupancy levels.

I remotely manage my current listings. Despite living nearby, I visit them only to drive by and check on them.  At scale, I would train a virtual assistant to handle the daily interactions online.

A support team includes a solid housekeeping contractor who handles all restocking and cleaning for turnover and a local handyman.  Those two contractors can handle everything day-to-day if the unit is set up correctly (I have one that has been operating without my physical presence for 3 years).  

Louisville has great airbnb permitting laws and is a prime market. I visit Louisville 3-4 times a year for family and like the Bardstown Road and Highlands areas best for airbnb.