Second home to be used as STR

[Michael Lee Croxton]

Investment Info:

Single-family residence buy & hold investment in Long Beach.

Purchase price: $415,000
Cash invested: $450,000

This was purchased as a vacation/second home with the option to rent as a short term rental when not in use.

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

We wanted a second home near the beach but were willing to subsidize the purchase by utilizing it as a short term rental when we are not there. This is our first investment property. We entered the endeavor with a worst-case exit strategy of taking it off the rental market and just enjoying it as our second home. Since there is no mortgage, the monthly cash flow will be used for my own monthly living expenses and will reduce the monthly distribution from my other investments.

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

I used the Bigger Pockets agent locator to find an investment-friendly agent who could assist me with our search for a home that would check all of our boxes.

How did you finance this deal?

Due to the caveats listed above and not wanting our first investment/second home to be leveraged, we paid cash.

How did you add value to the deal?

Wen made a cash offer to obtain a lower sale price and so the sellers would leave all the furnishings. They were new or like new and this saved us a lot of time and energy in setting up for the short term rental.

What was the outcome?

The owners countered with a marginally higher sale price and left all the furnishings and contents.

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

Megan Bryant in Long Beach MS was perfect for us and, not only would I recommend her, I hope to use her again in 2024!