New Short-Term Villa in established Beach Resort

[Cam Lawler]

Investment Info:

Condo buy & hold investment.

Purchase price: $375,000
Cash invested: $82,000

Short term beach rental in the Litchfield at the Beach resort. <$5K spent on upgrades to furniture as was purchased fully furnished.

https://www.airbnb.com/rooms/919414206961110218?unique_share_id=46fc65c2-d3a4-4148-ac6f-e4d950d4a04e

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

We have had our 1bd-1ba for over a year now and it is doing great. We have found that the market is really good for 2bd places, so we started looking to add to the portfolio in that location.

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

We found the deal off-market through an owners group on Facebook. We saw the post Friday morning, called and setup time to visit on Sunday, and had a handshake deal in place by end of day. It took two days to finalize everything with the lawyers.

Since we did the deal without listing, we saved 6%+ and got the property fully furnished.

How did you finance this deal?

We used traditional financing (80/20) with a local loan officer. Give this is zoned as a condo, we had to find someone that new the area and restrictions. We looked into DSCR loans, but the rate was better traditional.

How did you add value to the deal?

We made minor changes, added a bunk bed to help with families and space, and got it renter ready. The photographer did a great job on the pictures and we were able to get it on the market at the very beginning of July.

What was the outcome?

July and August are going well. We will have a negative COC return this year due to missing two major beach rental months, but we could not get the close date moved up due to seller commitments. Another unit in the same complex just closed for over $150K what we paid, so we believe we got a great deal.

Lessons learned? Challenges?

While we won't do it for all, due to location differences, I feel more comfortable doing deals without a realtor.