The Saco Summer House

[Greg Ruff]

Investment Info:

Single-family residence other investment.

Purchase price: $350,000
Cash invested: $10,000
Sale price: $450,000

Bought this single family residence in 2021as my primary residence using a 0% down loan to get in. I lived there for 1 year then moved out and started renting the house on Air BNB in the Summer and mid term rentals in the winter. I found that Air BNB and Booking.com were the best platforms for finding and managing guests for short term stays and that furnished finder worked well for mid term rentals.

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

I initially intended to continue living in the property but due to some life changes had to move out. Rather than selling the house just 1 year after purchasing and not making a major gain, I decided to rent it. Rather than lock in a year lease I tried my hand at short term rentals considering the house was located near the beach in a tourist town, it just made sense.

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

This property was actually one I was renting and was able to purchase off market from my landlord. We did not use a realtor in this case and had a title company act as the intermediary. We ended up saving more than our fair share considering this was in 2021 and sellers were getting 20 offers all above asking, we were able to buy below market value.

How did you finance this deal?

I bought the home as my primary residence, so I used a 0% down conventional loan to finance the purchase.

How did you add value to the deal?

The house was a recent flip, so it was entirely updated and there wasn't a lot of room to add value in that sense. However, I added value in other ways by managing the rental myself, from listing on sites, managing tenants, mowing the lawn, and cleaning the house in between guests. Teh amount of money saved by doing these activities myself was huge in ensuring the success of the business.

What was the outcome?

I was able to rent and manage the house for 2 summers before selling in order to move to NH for work. I would have kept the house, but the timing in the market was right and I would have been unable to continue managing the property myself so I made the decision to sell and hold on to the cash that was made from the deal for my next investment.

Lessons learned? Challenges?

Learned how to fix a sink and change a toilet!

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

Buying this house is part of the reason I became a loan officer and would be happy to help others do the same.