My first short term rental and 13th property purchase

[Sean Roberts]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $360,000
Cash invested: $50,000

This was my first purchase in the short term rental arena. I had read a lot and worked with the Short Term Shop to get more information and knowledge. I chose the Smokey Mountain National Park area due to it's long history of tourism and positive attitude towards short term rentals. I liked Pigeon Forge area for the same reasons and very low property taxes.

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

I was looking at the potential cash flow of STR model, a learning opportunity in a new investment model and expectation of future appreciation over time.

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

I was working with an agent with The Short Term Shop but I found the property on Realtor.com myself initially.

How did you finance this deal?

I used conventional vacation home property financing to take advantage of 10% down.

How did you add value to the deal?

When I bought the house, it was set up as a 2 BR / 2 Bath. There was previously a recording studio in the back half of the house. I made the house into STR. I furnished it and converted half of the studio into a game-room and the other half into a 3rd bedroom. I will soon be splitting that 3rd bedroom and adding a 4th bedroom and will also renovate the bathroom and laundry room and add a 3rd bathroom.

What was the outcome?

It is not as profitable as I had hoped but it doing ok. It has been a good learning process and helped me set up systems that will help me expand in the coming years.

Lessons learned? Challenges?

Central heating and air conditioning is not the norm that I expected it to be. I did not realize until afterwards that there was no central furnace. It was all window heating/air units.

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

My agent with The Short Term Shop is no longer there, but the The Short Term Shop helped make this deal possible. Guaranteed Rate was able to put together the financing on the deal when some other lenders could not.