Value Add Airbnb in Baton Rouge

[Travis Steinemann]

Investment Info:

Townhouse buy & hold investment.

Purchase price: $90,000
Cash invested: $36,000

Value add purchased from a wholesaler that we renovated and turned into an Airbnb. We did a lot of the labor ourselves with this one to keep our basis down and give us multiple exit strategies. We are currently working on refinancing it.

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

It honestly is the only way we can still acquire property in this high interest rate environment.

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

A wholesaler brought it to me since I purchased another deal from him in the same neighborhood. He thought it was worth more than it was, but had not actually been inside the property. I sent him pics of all the damage and told him where we needed it and he was ok with it.

How did you finance this deal?

Private money

How did you add value to the deal?

Renovated it completely and turned it from a college rental into an Airbnb. We did a lot of the construction ourselves. Built and installed the cabinets, trim work, sanding the stairs, drywall repair/patches, demo, pressure washing, installing new doors, fixtures, etc..

What was the outcome?

Beautiful Airbnb with an 130k basis and 180k ARV that brought in 3k/ month in revenue the first two months of service. This month occupancy is a little soft, but it will pick up in the fall.

Lessons learned? Challenges?

Working on it with my business partner and doing the labor on nights and weekends was frustrating. That was the last project I will be swinging hammers on. The wholesale/realtor/flip side of our business also was completely dead during that time and we had a lot of vacancies in our LTRs so it was a very challenging time.