Success Story - STR (Austin, TX)

[Kelvin Urena]

Investment Info:

Condo buy & hold investment.

Purchase price: $198,000
Cash invested: $22,000

This is a 1 bedroom, 1 bathroom unit sitting right around 740 SF in a quiet, A-Class Neighborhood in Austin, TX! This unit makes for a perfect short-term rental unit that is less than half an hour away from downtown Austin. For guests who're slightly more introverted, there are a variety of amenities to enjoy on-site as well (ie. Two swimming pools, an indoor gym, a dog park, & more).

With Lake Travis being a mere ten-minute drive away, the possibility of activities to engage in are endless!

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

With the success of my first Short Term Rental Unit in a similar area, we had enough capital to use in order to begin the acquisition process for another similar investment. After having conducted an analysis of the area (as well as some comp reports to go along with it), we were looking at a 13.8% ROI (Return on Investment) within the first year (assuming expenses were going to be similar to the first unit).

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

I managed to get in contact with other locations that would allow a similar subletting agreement to be enforced, just as what had been done with the first rental unit. When a meeting was scheduled with the Board of Directors, I was able to present the success of the first unit in order to set the groundwork for negotiations on this new acquisition.

How did you finance this deal?

In an attempt to raise over $20,000 for the acquisition, I had gotten in contact with an Accredited Investor who I was acquainted with for nearly 10 years. In preparation for the presentation, I outlined the following information for his benefit: Pro Formas, Profit and Loss of previous unit, Itemized List of Amenities needed, & Location Details. In exchange for 20% of Equity into the business, as well as interest on the capital investment, he provided $22,000 for the deal!

What was the outcome?

We managed to provide our investor with a steady stream of Cash Flow, while also managing to add another source of income to his vastly diversified portfolio.