1 Property 2 Short Term Rentals

[Kelsey Porter]

Investment Info:

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

Purchase price: $235,000
Cash invested: $58,750

Side by side duplex that we run 2 short term rentals out of. Each unit is 2 bed 1.5 baths & it's less than 5 min from downtown Des Moines, IA! Rather than bringing in approx $1200/month in rent with long term renters, we bring about $2500+ out of each side every month!

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

I love working with people and building relationships. We originally bought this duplex as a buy and hold for long term rentals, but then I started doing research on what brings people to Des Moines, how many short term rentals there are to compete with, and what their pricing typically looks like. Then we decided to run two STRs out of this duplex and haven't looked back!

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

As a REALTOR, the seller approached me about potentially selling and what he could get for it on the market. He had completely gutted it inside and out. I told him what he could get for it and told him it was a pretty good market for him to sell in. Then when I realized I wanted it, I called him back and said you are going to sell this duplex to ME!

How did you finance this deal?

We used an All-in-One mortgage to finance this one. It's reeeeeally tough to find much info on this type of loan but we are loving it so far. It does have an adjustable rate, but we had immediate access to our equity through a bank account right after closing, which was very attractive to us. We knew we were going to hold onto this one for a long time, so to be able to pull the equity out at any time to invest in another property was drool worthy!

How did you add value to the deal?

We have invested over $10k into furnishing each side of this duplex. If we wanted to, we could put together a package and sell this duplex as two short term rentals for MUCH more than we paid for it about a year ago.

What was the outcome?

The outcome is that we successfully closed on this duplex and once each side was empty, we turned it into two successful STRs!

Lessons learned? Challenges?

Lessons learned is to definitely shop around for mortgages & get creative. We've learned about 1,000 other lessons since we closed on it regarding STRs, too!

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

We closed this All-in-One loan with a lender out of Idaho. Not every lender will entertain the AIO mortgage, so we had to do a lot of research and figure out who could help us. The Loan Officer's name was Harrison George and I'm happy to share his contact info with anyone that wants it!