This was a 3 unit we purchased for the purpose of Short term rentals in Wisconsin Dells. There was a main house of 3 bedrooms 1 bath, a detached garage and then a structure in the back that had two small J1 Visa type housing units. We originally planned to renovate the two units but have decided to demo the building as they need too much work. Instead, we just completed the renovation on the main house and will do an ADU conversion on the garage into a small studio.

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

We already had two short term rentals in a nearby town. We knew it would rent more in the Dells. We loved the idea of a multi-unit in this location

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

It was in the MLS. As a broker in a very strong market, I knew our numbers would work even at a much higher price. There were multiple offers and we used an escalation clause. I included a threshold on the inspection as well. We settled $5,000 over list price.

How did you finance this deal?

Used a commercial loan with 20% down. We plan to have the property paid off in less than 2.5 years.

How did you add value to the deal?

We did a full renovation to the main house. The additional two units in the back will be demolished soon. The garage conversion to an ADU will start in the spring of 2023 so we'll have two units available for rent. If we are lucky, the City may allow us to add a Boxable to the back of the property for a 3rd STR. We are currently in discussions with the City.

What was the outcome?

Fantastic purchase! Cash flow varies between $10K+ a month on busy months to $4K on slower months for the main house so far. This property has not been operating long enough to get an average cash flow monthly.

Lessons learned? Challenges?

We were not super realistic about the condition of the two cabins in the back of the property. They were never intended to be used year round and did not have a proper foundation. We estimated needing to spend $50-$60K to make them usable year round but they would have still been a bit shady...not really in line with what we would be proud of. Luckily, we were happy to pay the price we did for the main house alone so we feel really good about the purchase.

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

Dan Rindfleisch was our commercial lender at Baraboo State Bank- I highly recommend him and have referred many clients to him for commercial deals. He is great to work with and really on top of his game. And....Me! :) I'm a real estate agent/ broker and can help if someone is looking to buy or sell in this area.