Building out a vacant bar into a 3BR/3BA AirBNB!

[Tiffany Drahonovsky]

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $234,900
Cash invested: $50,000
Sale price: $234,900

Unique find! This up and coming old neighborhood is close to festivals, the freeway, the airport, and lots of great food and entertainment. The parcel as it stands is an improved (inside) duplex with one tenant in place and a vacant former bar with living quarters above it on the same tax key. We plan to build out the bar into a single family home with 3 bedrooms, 3 bathrooms and a loft feel.

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

I see a huge upside to build this vacant property into a single family home, to either run as an AirBNB or to sell when we cash out refi. Plus, we have a duplex we can hold. We will be splitting the tax key if possible for max ARV on the separate parcels. Purchase price $234,900, SOW $200,000, ARV est $650,000 for the combined properties. It's a big project, but somebody needs to do it. Plan to furnish the duplex and rent it short term and then to furnish and AirBNB the single family (now vacant

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

I found the deal on MLS. It was a regular listing. I happened to know the seller, so I called him and we identified he wouldn't sell it for less than he had in it, but he wanted out. Wrote a cash offer, tried to fund with a construction loan (failed) used hard money to purchase it and now refinancing with a commercial lender to get out of the hard money and to secure rehab funds.

How did you finance this deal?

Private money for down payment, hard money for purchase. Didn't get the rehab funds with hard money due to shared tax key and appraisers having to see this as a 3 unit vs 2 separate properties.

How did you add value to the deal?

Rebuild the bar into a 3BR/3BA home, replace windows on duplex.

What was the outcome?

To come!

Lessons learned? Challenges?

Make sure you can exit out of any hard money deal BEFORE you close on buying it.

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

I am a Realtor, my partner is a Realtor and flipper. We are both great at what we do as we are investors first.

[Lara White]

@Tiffany Drahonovsky That looks like a really fun, and cool flip!!  Please post pictures post-rehab.