Baton Rouge Airbnb

[Travis Steinemann]

Investment Info:

Townhouse buy & hold investment.

Purchase price: $106,000

Townhome near LSU that was a college rental and we renovated and turned into a STR.

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

I love the architecture of the buildings in this neighborhood. It is very unique for our market, so I thought Airbnb guests would appreciate it more than college students.

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

A wholesaler sent it to me and didn't have any pictures so I went, took pics for them and we worked out a deal.

How did you finance this deal?

Commercial loan for the bulk of it from a local bank. They gave a purchase and rehab loan of $131,998 @ 6.255%. It was a 5 year loan with the first year interest only and years 2-5 P&I with a 20 year am. Private money and personal funds covered the rest.

How did you add value to the deal?

It needed a large renovation, so we did that. I also saw a gap in the Airbnb market for that area and thought a nice Airbnb at an economy price would do well.

What was the outcome?

Average occupancy is 75% while the zip code averages 40%, so we are doing very well on it. There has been a lot more competition entering the market, so we will see how it does long-term, but the first year we did well. We spent $46,884 on the renovation. All in around $152k, with an appraisal of $185k. We don't have as much equity as we like, and we also paid $10k for furniture, but we brought in $42,286 in revenue in 10 months.

Lessons learned? Challenges?

We fired our contractors after they didn't clean anything before painting, including the tile floors where we used a special tile clad paint. They painted over dried drywall mud, bugs, hair, and anything else you can think of. The project took much longer than expected because they had to re-do the floors twice, so we couldn't set up the kitchen and baths.

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

Equity Hub was our wholesaler. Title2Land was the title company. Synergy Bank did the financing.