New Biloxi Airbnb Condo Added To Our Portfolio

[Annette Hibbler]

Investment Info:

Condo buy & hold investment in Biloxi.

Purchase price: $212,000
Cash invested: $2,000

We've added to our portfolio this year. Actually, we sold one of our townhomes and upgraded to this lovely, 2BD/2BA fully furnished condo in a better location. We still had some minor work to do to make it guest-ready and supply it with the essentials. It's early yet but already getting great reviews.

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

We spent the winter months looking for investment properties because we want to expand our portfolio. We quickly sold one of our existing townhomes in Biloxi and were looking for an upgrade.

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

Over three months, we had five different properties under contract, one by one they fell out after appraisal. The sellers were unwilling to adjust their sale price to match appraised values. Values were coming in 10K-30K below purchase price in nearly all instances. When this condo came up, we didn't waste any time securing it under contract. It was well furnished and the location and amenities are excellent for Airbnb rentals.

How did you finance this deal?

Instead of financing, we decided to pay cash since the purchase price was not inflated but very reasonable compared to other condos in the same building. We closed in just two weeks and had it on the market in two weeks' time.

How did you add value to the deal?

Because we were paying cash and willing to close very quickly, we were able to negotiate with sellers to include all the furnishings in the sale, saving us thousands of dollars. All that was left were basics such as dishes, additional bedding, equipt the kitchen with utensils and cookware, etc. We did replace the coffee table and two end tables with something more modern and light. We also freshened up the outdoor tables and chairs.

What was the outcome?

The condo was guest-ready in just two weeks' time and is already receiving great reviews.

Lessons learned? Challenges?

The challenges are familiar in this market. Securing a property that is not overpriced. We knew that many of the properties we secured would likely appraise lower than the agreed purchase price but we were shocked at how low they came in. Seems that appraisers in that area are not keeping up with the rising market values. Sellers were completely unwilling to match the appraised values and because of the big discrepancy in price vs value, one by one the deals fell apart.

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

Yes, we have worked with the same real estate agent for years who also manages our rentals in the Biloxi area.