Sub-to Turned AirBnB and Photography Business...for $1,000 out of Pocket!

[Walter Key]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $410,000
Cash invested: $1,000

Purchased this on a Sub-to deal with $1,000 out of pocket! Silent partner fronted the acquisition cost and cost to furnish into an AirBnB. In addition to being a perfect lakefront AirBnB, this property also has an awesome detached oversized garage that we're going to convert into a photography studio for my wife's photography business to generate additional income.

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

We live literally 5 minutes up the road on another lakefront property so it was a no-brainer for the ease of managing the AirBnB and the location of the photography studio. The cashflow analysis for the AirBnB is great.

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

Found it on my local MLS, scrubbed the tax record to see it was recently purchased with very little equity built up, then I called the listing agent and had a conversation about his seller, their needs, and how we could put a great win/win scenario together for them.

How did you finance this deal?

Purchased the home Subject To the current mortgage and borrowed the acquisition costs from a silent partner at a great rate.

Mortgage is at 3.14% for the next 28 years! :)

How did you add value to the deal?

The home is completely remodeled and turn-key but we still need to do some nice landscaping, furnish out the property for AirBnB, and finish the detached garage into a photography studio.

What was the outcome?

I got a great deal and a seller avoids foreclosure! A win/win for everyone involved!

Lessons learned? Challenges?

Deals are everywhere...just look for them.
If you find the deal, the money will find you.
Choose your partners wisely (5.5% annual interest with interest only payments...that's hard to find!)

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

I represented my LLC as the buyer's agent and the seller's agent was great but he's not in this former.