Market Topping Airbnb in San Antonio

[Andrew White]

Investment Info:

Single-family residence buy & hold investment in San Antonio.

Purchase price: $265,000
Cash invested: $200,000

1930’s historic home with a converted garage. The property took $350k to renovate, on what was originally a $210k budget, but we transformed it in to a gorgeous 4,500 sqft, 7 bedroom, 5 bath, luxury Airbnb. We have grossed $300k in revenue over the first 12 months of operation, at a ~50% profit margin. The property was appraised at $846k so we got a decent bit of cash back out at closing and are rapidly making our investment back.

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

In retrospect, the answer has to be sheer overconfidence! It was an enormous rehab and I didn't have the experience or the contractors to take it on. But, I had a vision, and I had a decent chunk of capital to start with (don't worry, that didn't last).

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

My realtor is really in to the historic homes in San Antonio and he brought it to me through his contractor (network is everything!). Some other investors had purchased it to flip it and decided they had too many projects going to handle one this big. I didn't negotiate a ton on price as the deal seemed pretty reasonable. They had just bought it from a wholesaler for $250k and I paid them $265k.

How did you finance this deal?

Hard money loan that covered 100% of rehab and 90% of purchase. I believe I put $58k down at closing. Thankfully the lender talked me in to a 24 month term as it took us the entire 2 years!

How did you add value to the deal?

The property required a full gut rehab as it had been vacant for 15+ years. Foundation, framing, subfloor, roof, windows....EVERYTHING got redone and updated.

What was the outcome?

All in for about $650k and property appraised for $846k. We did a cash out refi at about 70% so we owe about $600k on the note. The property is cash flowing $10-15k every month and has been an absolute juggernaut as a short term rental.

Lessons learned? Challenges?

Vet your contractors and engage partners if you don't have the experience for the job.

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

Todd Worrich - Jason Glast group w/ Phyllis Browning