Gulf Area Beachfront Property Strategy

[Cameron Pletcher]

Hello Everyone,

My with and I are new to Bigger Pockets and Real Estate Investment. We are interested in building a portfolio in the Gulf Shores/Panhandle FL area. 

In doing some initial analysis I'm seeing property some properties that are decent value and potentially within our budget, but are fairly close to market values. Being that I'm looking at vacation rentals and condos directly on the beach, it is difficult to find BRRR type properties, I'm calculating that if I can have vacation rentals 15 days a month on average, it provide enough cash flow that it makes my ROI worth it even though I'm not necessarily making money on the initial purchase price.

When it comes to property like this, is buy and hold strategy with the idea that cash flow is the primary profit driver valid? Or should I be attempting to underbid on the market slightly to add a little more cream on top? 

Any insight into this market would be greatly appreciated as we are new and we would be remote investing over time to build a portfolio in the area. 

[Avery Carl]

Hey Cameron! What is defined as a "deal" in a vacation rental market differs from what is defined as a "deal" in a long term market. A deal in a vacation rental market is determined by the income potential of the property vs what you're able to get it for, not how far off the purchase price you're able to get the seller to come down.

BRRRR is possible in vacation rental markets, I have done it myself in the market you're referencing (I have 30 properties total, 6 of which are vacation rentals), but the opportunity to do so is few and further between than other markets. With vacation and short term rentals, it's best to invest for cash flow rather than potential appreciation and value add (those are just gravy on top of the cash flow). Pick one aspect that is most important to you and stick with that, rather than trying to win at every strategy in the real estate investing book on one property, in the case of short term rentals, in my opinion, cash flow is king.