Old Mansion Turned into STR!

[Michael Glaspie]

Investment Info:

Large multi-family (5+ units) buy & hold investment.

Purchase price: $350,000
Cash invested: $150,000

The oldest home in the city turned into an 8-unit short-term rental! We ended up spending more on renovations than expected, however, the property is refinanced and cash-flowing. We ended up leaving a significant amount of equity in the deal. Many more repairs than anticipated.

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

We saw the value add opportunity in short-term rentals, while others were looking at long terms.

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

This was on market. We used private money so we were able to present a "cash" offer to the sellers.

How did you finance this deal?

100% private money until we refinanced.

How did you add value to the deal?

Forced appreciation through renovations, followed by securing synthetic leases for refinancing.

What was the outcome?

Left a lot more money in the deal than expected, but we are cash-flowing monthly.

Lessons learned? Challenges?

The older the property the more repairs there will be. I will now begin to increase my contingency bucket by a percentage for every additional 10 years past 20.

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

My partners and I are all licensed realtors. We were able to handle the deal ourselves.