Air BNB Arbitrage deal Specs. Input is greatly appreciated

[Chase Arthur]

Hello all. I am currently in the Northern California area and have been looking for properties to arbitrage. Im fairly new to this industry and would love to hear what you guys think about this deal. 

This property is in a wine county . Less than a mile away from multiple wineries. 

3b

2.5ba

1580 sq ft

2 floors

asking 3400 rent

Now for the statistics (sourced from Air DNA) 

- Only took the medians or the average homes when sourcing the statistics. Aimed for mid to lower percentiles just to be safe. 

- All this info is from 3 beds in the area

(YTD) ADR = $387

(5Y) ADR = $371

YTD Occ = .69

(3Y) Occ = .61

Taking the 3y Occ and 5y ADR    371 * 18 = $6678. 

Operating Expenses would be around 4000 - 4200.

Cashflowing around $2500 / month 

all worst case scenario #'s

Start up cost = around 20,000 ( furniture = 12,000) (security deposit / first&last = 6800) Round up to 20 just to be safe

Break even = 7/8 months

If all goes well would extend the lease and profit the whole next year. 

Thoughts?? 

Also curious as to what partners would be needed in doing this. So far I have 

- CPA (open LLC)

- Attorney ( Review Contract/ add in certain clauses)

- Interior designer ( Floor plan / buy list) (not sure where to find one or if one is even necessary)

- Real estate Photographer (To take the pictures) (Again not sure where to find one or if one is necessary)

- Cleaners (Looking to source them off of Turnover BNB)

- Local Handyman (To fix small things/ could do it myself if I'm in the area)

I will start off by managing the property myself with the help of Guesty. Not sure how much work this will require yet, any feedback from someone who manages their own properties would help a ton.

This is where Im at on things, again relatively new to this industry but so far this seems too good to be true. I know there are a lot of things I'm missing, which is why I'm hoping someone experienced could give me a reality check or help reinforce my thoughts on this. Any feedback or input would be greatly appreciated. Thanks

[John Underwood]

You are right, it can be too good to be true. Read through some older post on here to find out more.