New Bern Tiny Home rental netting $25,000 profit

[Ben Kirchner]

I've been proposed a deal on investing in a Tiny Home, to be placed in New Bern, NC (Fairfield Bay).  The person presenting me this deal is suggesting it could warrant up to $200 a night, through AirBnb.  On the conservative side, at least $75/night.  He's even suggested that with the recent hurricane damage in New Bern, there is no where to rent, and there.  He suggests insurance company workers need to be stationed down there for months, and will need a place to rent.  After the hurricane damage is addressed, he suggests it would market well for people looking for a week by the coast.  The Tiny Home would be acquired for ~$50,000, and he suggests it could generate gross profit of $4000 a month.  Accounting for 3 months vacancy, that's $36,000 a year.  

Is this too good to be true?? Those who are familiar with the market in New Bern - please help me with this. Initially, I think - why would people pay up to $200 a night for a Tiny Home on Airbnb? He suggests thats the market in the Fairfield area. I would be funding the deal, and splitting cash flow 50%, while the other end is acquiring the deal, and handling the management, maintenance, and keeping it occupied. Since I would be using a HELOC to fund this, the gross profit would first address the HELOC monthly payment, then split up net profits from there. Since I'm inheriting all the risk by funding 100% of the deal, I'm not sure I'm not sure I'm comfortable, but am unsure on what else to have in writing to make it right.

In addition to this proposal, I've already purchased 3 lots in New Bern, which was presented me to this same person.  I've purchased 3 vacant lots in zip code 28560.  The intention is to hold onto these for awhile and sell in a 12-24 month period for a return on investment.  Houses right by these lots are in the $250-$350k range.  Anyone with knowledge of this area, do you have an idea of what is a reasonable expectation for a builder to pay for vacant lots in these areas?

[Ryan Daigle]

@Ben Kirchner regarding the tiny home investment, you may want to look into the River & Twine tiny house hotel in Rocky Mount. Same concept in an easter NC town might be a good comp?

https://www.riverandtwine.com