First STR Investment!

[Evans Wright]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $372,000
Cash invested: $135,000

Purchased a SFH that will be used as an STR. Perfectly situated 3 minutes to the lake and 20 mins to the heart of Charlotte.

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

My fiancee and had been keeping our eye out for potential investment properties in or around the Charlotte area. When I showed her one property in the area, she was not amused. The next day I found this property and took her with me and she loveddd it and said it was so charming. If it wowed her, then we knew we had to acquire the property and elevate it to be an amazing STR.

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

- This deal was listed on the MLS for just over 20 days.
- The agent said the sellers were motivated because of a relocation to another state.
- I offered $18k under asking and they did not even counter which surprised me since inventory is extremely low in the area.

How did you finance this deal?

- My fiancee and I contributed 50% each to the down payment and closing cost.
- We leveraged a DSCR loan.
- Terms were 75% LTV and 8.125 interest rate
- I represented myself as the Realtor and was able to apply all of my commissions towards closing cost.

How did you add value to the deal?

- We painted the entire place, renovated the bathrooms and ran electricity out to the 350 sq ft shed.
- The shed is being used as a game room, currently equipped with a ping pong table and cornhole.
- It will evolve over time to a fully finished hangout spot/bar.
- We also hired a professional interior designer and her husband contractor to design and furnish the entire interior and exterior.

What was the outcome?

- We now have been live on Air BnB for a month and were able to get over $5000 in bookings. With a great PM, our hope is that the income and great reviews will continue to make this property stand out amongst the competition. They are building a hospital a half mile away so we will also seek to leverage as an MTR in slower seasons.

Lessons learned? Challenges?

- Biggest lesson learned is control what you can control and do not stress about the rest. There were numerous setbacks to closing to include low appraisal, lender changes, and other underwriting request.
- Order 10% more tile than needed! I swore I did this because the website I ordered from has a "10% more option" and still came up short for one of the bathrooms. We were delayed again during renovations/interior design. Guess my measurements were slightly off...

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

I represented myself as the agent but I have to give credit to the listing agent who was super helpful in getting the deal done. When my first lenders appraisal came back way below offer price, she provided me with another DSCR broker who was able to get things done. Plus we got a new appraiser out there and then the property appraised above offer price!