Destin FL Luxury STR Advice

[Paul Shannon]

I recently vacationed in Destin with another family and returned to the same VRBO rental we stayed in the year before.  Destiny East neighborhood if you're familiar.  Our families are considering purchasing a luxury rental that mirrors what we stayed in.  5br/5ba, very unique pool, outdoor bar, 2 blocks from the beach, 15 years or less old, granite, stainless, etc etc.  

We have a budget of $1.6M and are looking for a 3% COC, 6% NOI. With debt we'd use to finance the purchase, I'm estimating we'd have 10% of gross rents left over after debt service, setting aside for reserves/cap ex to reach those returns.

We made the owner of the property we stayed at an offer, but he's not going to sell cause he has a cash machine.  The property rents for $1K a night in peak season and rents for 40 weeks a year, grossing almost $200K annually.  He paid cash for $1.1M.

Can we find anything in this stage of the market cycle that will meet our goals?  We are only considering properties that jump off the page when you see the VRBO listing.  

[Matt "Roar" Gardner]

@Paul Shannon - You can definitely meet those terms in the Destin market.  Destiny East is a great community right new one of my favorite beach spots with the kiddos.  I have a 5 Bedroom property in Crystal Beach and another condo in Fort Walton Beach, and I've help plenty other investors find solid deals. I'd be curious to see that owner's actual return because we charge about $1K/night peak season as well, but we only did $73K last year... lol   Destiny East is definitely in a better location -- and we paid much less ($565K).  

Best of luck!!!