First Year of Rental Arbitrage

[Steven Pan]

Investment Info:

Single Family home

Purchase price: $2k/mo
Cash invested: $20,000

Been a long time lurker on here and learned and bought quite a bit of real estate and wanted to try something new. Time for me to come out of the woods :)

I signed a 5 year lease for this home 4bd/2ba and fully furnished it, took about 2 days. The home is a newer 2017 home in DFW, down the road from my first home I ever purchased.

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

It looked like everybody is doing Airbnb, so I thought I would join too and see how it is back in 2021. I listed my own home on airbnb and it was doing quite well and saw that my neighbor was moving and decided to try to double dip and just try out arbitrage.

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

Walked over to the neighbor and asked if he would lease it to me. Told him I had a couple properties around the area and lived 15 minutes away and I Airbnb the house closest to me. I guess the deal went through when he heard I was going to sign a 5 year lease and he doesn’t have to worry about a thing.

How did you finance this deal?

Cash and credit cards

How did you add value to the deal?

The home is kind of new and modern so it helped a bit, but adding in furniture made it look nicer in photos.

What was the outcome?

75% occupancy at an average of 195 a night

Lessons learned? Challenges?

Cleaning, during peak season I couldn’t keep up doing 2 Airbnbs. Added a cleaning fee and hired a cleaner. Only challenge I faced was just time management, thought it would be easy since I had properties next to each other, but 90% of the time they had different check out dates. Forgot about those small details

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

I didn’t work with any agents.

I would love to connect with anyone that can help me find more arbitrage opportunities! I’m currently focused in Texas, but thinking about adding other states to my portfolio.

Long time lurker coming out of the woods :)