STR in Mountains of Arizona

[Kathleen McDowell]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $450,000
Cash invested: $90,000

Bought a second home in the mountains of AZ to STR as its 3 hrs from cities like Phoenix and Tucson where people want to get out of the heat in the summer and ski in the winter. Property does not cash flow, it breaks even. We enjoy using the property as a second home so are ok with it breaking even. It has appreciated 13% in value in the first 9 months of owning it. 19% ROI.

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

Having a holiday home that would be paid off by STR tenants!

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

Negotiated the deal by making a quick offer, beating out the competition.

How did you finance this deal?

2.6% 30 year mortgage.

How did you add value to the deal?

Completely redesigned the home - all cosmetic fixes - new floors, paint, etc.

What was the outcome?

19% ROI

Lessons learned? Challenges?

The home was sold furnished. Upon closer inspection, 95% of the furniture was not useable for STRs. We had to upgrade a great deal of the furnishings. In future, I would do walkthrough myself instead of using local agent in my brokerage on video. You miss a lot on video!