Buy, Renovate, Airbnb, Refinance (or sell to the right offer).

[Benjamin Vail]

Investment Info:

Single-family residence buy & hold investment in Columbus.

Purchase price: $202,000
Cash invested: $7,000
Sale price: $251,000

Buy, (light) Renovation, Rent (Airbnb and STR), Hold for 3 years, sell for appreciation. After 3 years of ownership, I made an average of $817 per month profit from Airbnb cash flow, and an average of about $800/ month in appreciation.

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

BRRR, but my twist on it is BRAR. Buy, Renovate, Airbnb, Refinance (or sell if the offer is right).

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

MLS. I won the 4 offer bidding war by using an escalation clause.

How did you finance this deal?

Conventional - owner occupied. I mean, I did live there for a little while...

How did you add value to the deal?

Made it a short term rental, that was professional managed by my company Housepitality. I themed this house to be "The Gathering House". We made lots of money from groups wanting to stay close to The Ohio State University, and the Columbus area.

What was the outcome?

It was a great rental for the time I owned it, and now we are taking the appreciation and equity out to purchase another STR.

[Benjamin Vail]

@Brian Garrett  in the last two months, I have found two banks that will make loans based on Airbnb revenue history.  What you said was generally true, except lending institutions are finally starting to come around to the legitimacy of the short term rental world. 

Host financial, and another regional bank are two that I have been working with on our STR properties. They won't give me an increased appraisal value based on the STR revenue. But they will consider the income from STR in that property as debt servicing ability. Similar to what @Alex Bekeza said. Host Financial does not require a seasoning period. They do require to have professional management in place, and I run an STR management company.  Their rates are just slightly higher than conventional mortgage rates. Definitely less than Hardmoney costs. 

- Cheers!