The Beachfront Airbnb Flop

[DJ Snow]

Investment Info:

Other buy & hold investment in Pensacola Bch.

Purchase price: $354,000
Cash invested: $53,000

This was a seller financed deal that would have been perfect had I known then what I know now. It was a 2/2.5 unit facing the Gulf of Mexico and the Bay w/ views of the sunset. The location was pretty decent and had 8 pools, 8 hot tubs, spa, fitness center, restaurant, tennis courts, and more.

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

Always wanted a beachfront property

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

Seller financed deal

How did you finance this deal?

Out of pocket financing

How did you add value to the deal?

Eventually, I dropped the price and put it on Airbnb where it instantly went to 98% booked and covering all expenses, etc. It was perfect until HOA got upset and started adding $75 check-in fees, 33% of each deal, and not wanting Airbnb rentals.

What was the outcome?

I got out of the deal altogether and I'm focusing on finding beachfront properties with no gate access and/or HOA.

Lessons learned? Challenges?

The biggest lesson is that the rules of real estate are constantly changing and if you own or leverage (completely) the property you can run into situations like this. It was an eye-opener for me and taught me to analyze deals better, control them, and don't put my money in the deals unless I can recoup it quickly. Thankfully, it made me a smarter investor.