The "Tiny House"

[Daniel H Hauer]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $110,000
Cash invested: $35,000

This 400 sq ft Tiny House serves as our short-term rental property, primarily attracting fishermen due to its prime location on the Lake St Clair canal. Recognized as one of the top 20 Bass lakes globally, the property enjoys high demand throughout the year. We are actively seeking investors to collaborate on similar ventures around Michigan's lakes. The compact size of this home ensures reduced overheads, and since the fishermen are away for the better part of the day, it experiences minimal wear and tear.

You can check out our active listing on Airbnb here http://bit.ly/3tdEq2i

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

We first got interested in this through two other short term rentals we had owned and operated previously. The first two units we did went well but they had limitations to what we could do, one of them had no internet available due to being in a remote location and the other was a condo and we just had too many neighbors complaining about people coming in and out at all hours. We learned some lessons there and came up with a plan to target a very niche market (sport fishermen).

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

This was a for sale by owner I came across on Zillow. I'd been on the lookout for the smallest place I could find on the lake. This was perfect as our test case house and to prove out the model.

How did you finance this deal?

We used some cash from previous sales as well as a private lender (we are always interested in speaking with lenders as well for new projects.

How did you add value to the deal?

We brought this place to a complete 180, from a tiny cabin with no use case to a fully functional fishing cabin with an 85% booking rate.

What was the outcome?

We are up and running and happy t report we have a ton of bookings!

Lessons learned? Challenges?

We did learn that we want to target a minimum of 600sq ft for ease of long term debt acquisition. We discovered that it is near impossible on any property smaller than that. Our next property of this type will be built to suit and vacant waterfront land.