BRRRR-BNB Charleston SC
Investment Info:
Townhouse buy & hold investment in Cainhoy.
Purchase price: $105,000
Cash invested: $105,000
Tired Landlord townhome ends up being a perfect BRRRR-BNB
2 bedrooms 1.5 bathrooms 1008 sqft.
What made you interested in investing in this type of deal?
The home was very close to my primary residence, and it was easy for us to manage the property ourselves. We had established the working model of Airbnb and got systems in place.
How did you find this deal and how did you negotiate it?
I found the deal while I was renovating and getting my first property ready for Airbnb. I looked across the street and saw the current tenants sitting outside with all the doors and windows open in the middle of the summer in the south. I walked over and talked to them and they said their landlord wouldn't fix the air conditioner. Immediately the sirens are going off in my head. I found the owners information through tax records and reached out. Ended up buying from owner with cash.
How did you finance this deal?
Cash and then cash out refinance (BRRRR)
How did you add value to the deal?
We (my wife and I) decided to make it an Airbnb as well since we had seen some success with the first property. We did all the renovations ourselves and rented it out on Airbnb for about 1.5 years to recover some of our expenses and build a nice reserve account. We stabilized the property and established a strong STR track record which then allowed for the Cash Out Refinance.
What was the outcome?
We successfully pulled out enough cash with the refinance to cover the cost to purchase and the cost to renovate the home entirely. In addition, with the way the timing worked out I was able to build a healthy reserve account while we were waiting for the rental history to be established. We still own this property six years later and it's a good performer in our portfolio.
Lessons learned? Challenges?
Always go after every opportunity and don't worry about people saying no because you can't technically lose what you never technically had. Also, you really need to have a healthy reserve in place to weather storms especially with STR.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Small Local bank for cash out refinance on STR.
