Short Term Rental using Cash Out Refi

[Christian Ortega]

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $560,000
Cash invested: $45,000
Sale price: $560,000

Through my network, I located a distressed property (off market) that was prime for a Short-Term Rental. So, from the equity on my primary home, I did a cash out refi, and used those funds to purchase said distressed property. From there I underwent a 2 month long full remodel on the property and listed it on Airbnb

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

I have two long term rentals in San Diego, a SFH and a Duplex, so I wanted to venture into STRs for a higher return

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

I found this property off market through my network, and I negotiated it directly with the owner

How did you finance this deal?

I used a Cash Out Refi

How did you add value to the deal?

I did a full remodel on the property, so I added value through forced equity, not only this I got this property below market value, so I instantly had equity

What was the outcome?

I now have 350k in equity in the new property along with it producing a high return

Lessons learned? Challenges?

Lessons learned pertained to learning how to set up a short term rental, as for challenges were again pertaining on managing a short term rental

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

I represented myself in this transaction, as for lenders I used Cross Country