Banking on location and major attractions being built nearby

[Erik Hyatt]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $195,000
Cash invested: $50,000

Located walking distance from the Indian River and the future location of Margaritaville resort. Also a water park being built nearby. Five minute drive to the ocean beaches. Five minute drive to Melbourne International Airport. Finished renovating, landscaping, and furnishing in July. Started short-term renting in late July (low tourist season). Trusting it will fetch higher occupancy at higher rates during the peak season (Dec. - May), and even more once the future attractions are completed.

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

Location, price, and future desirability of the area.

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

Was overpriced and sat on the market for over 100 days. Showed comps minus estimated reno costs. Offered a much lower, real market value price and it was accepted.

How did you finance this deal?

Personal cash down and conventional loan.

How did you add value to the deal?

Sweat equity. Did some work myself. My wife found nice furnishings on FB Marketplace, staying below budget. No pool, so added other unique and fun things in the yard - large screened porch with dining table and lounge area, Gazebo, lawn games, putting green, outdoor shower made out of an old surfboard.

What was the outcome?

Starting to get short-term rental bookings.

Lessons learned? Challenges?

Went with the cheapest and most available contractor for landscaping. Did a good job, but miscalculated costs and kept asking for more money. Also, never pay a contractor the final amount until the job is done. Made that mistake a couple of times in the past. One did a terrible finish but wouldn't come back and fix it. The other just took his sweet time coming back to finish.

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

I was the real estate agent representing my wife as the buyer.