$37 Out of Pocket 1st STR Deal!!!

[Wyatt Powers]

Investment Info:

Single-family residence other investment.

Purchase price: $205,000
Cash invested: $37

https://airbnb.com/h/home-away-123

I am house-hacking this SFH as a STR in Sioux Falls, SD.

What made you interested in investing in this type of deal?

The cash flow & how I was able to finance it creatively to get into my first deal.

How did you find this deal and how did you negotiate it?

Multiple Listing Service, negotiated by myself (licensed realtor).

How did you finance this deal?

I used an FHA loan, I qualified for a SD Housing (Under $88,000 annual in Minnehaha county) to put 5% down, I was a licensed realtor got a $5,800 check cut to me at closing and $463 of my $500 Earnest Money Deposit check cut to me at closing as well. Cash flows ~$400/month with no money out of my pocket and has had a 70-80% occupancy through the first 6/7 months. I just added a hot tub for a quick value add, and think I'll cashflow another ~$500/month as a result. Not a bad first deal to get in!

How did you add value to the deal?

Hot Tub, and will be using a line of credit to change it from a 3/1/2 to a 4/2/2 or 4/3/2 depending on rehab costs to force appreciation and pull out 90% in a HELOC as well.

What was the outcome?

Allowed me to get into the RE world and get on base. I haven't paid for the mortgage out of pocket yet, I got a free hot tub (guests pay for it) and some cashflow in my pocket as well!

Lessons learned? Challenges?

Challenges, not budgeting for PITI correctly & not having as high of a cash flow as I thought I originally would but I'm still ~$400 (300-500) cashflow positive every month and I haven't been through the most profitable busy season yet either (summer time)!

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I was the agent, I used Ryan Spellerberg at First Premier Bank to help me close on it and to help walk me through SD Housing and getting qualified for that. I used First Dakota Title for Title & Closing. Highly highly recommend them both!