First STR purchased after attending BP Rookie Bootcamp

[Cam Lawler]

Investment Info:

Condo buy & hold investment in Pawleys Island.

Purchase price: $149,900
Cash invested: $50,000

Short term beach rental in the Litchfield at the Beach resort. $10K spent on upgrades to flooring, furniture, kitchen, and paint.

https://www.airbnb.com/rooms/53046667?unique_share_id=dbdaac3f-b94a-4765-b800-059c52687665

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

After attending the Rookie Bootcamp, we narrowed down our focus to multifamily and short-term rentals. I knew that multifamily around use would be difficult give current prices, so we focused on a beach rental at a beach that we know very well.

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

We spent a long time searching MLS each night to try and find deals. We found this one on a Wed night, we put in an offer on Thur (we already had financing secured), and drove down that weekend to walk the property, both condo and resort. We saw that other condos were going quickly and that the price was right for a "B" grade condo. We offered list and sent our pre-approval letter with it.

How did you finance this deal?

We did traditional financing through a local bank at 20% down (we played it conservative). After unsuccessfully challenging the appraisal amount (despite plenty of available comps to justify the purchase price), we did have to bring about $7K more to the table as there was no time to get a second appraisal.

How did you add value to the deal?

We immediately replaced the flooring with LVT, painted, installed new bed frame/headboards/linens, and fix a few minor cosmetic issues. This brought the rating of the condo up to an "A", which put it higher in the rotation for rentals through the resort.

What was the outcome?

We should completely cover all annual mortgage and monthly expenses by September, and will use any profits from the rest of the year to pay back the repair/reno costs.

Lessons learned? Challenges?

We went with the on-site rental management company, but have been disappointed. They act like a traditional resort and have not caught up to current marketing practices, including being on Airbnb and VRBO. We are researching what might be needed to either self-manage from afar or get another rental management company once our contract is up in November.