North Tempe Townhome - Short Term Rental Investment

[Evan Loo]

Investment Info:

Single-family residence buy & hold investment in Tempe.

Purchase price: $300,000
Cash invested: $75,000

This is my first short term rental investment in North Tempe, AZ. It is currently cash flowing about 15k/year at 15% cash on cash ROI. 25% down and 5.125% interest, a mile down the street from my primary with little maintenance needed!

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

Scottsdale was rated the #1 Airbnb city in the US in 2019 by Realtor.com. It's a very popular destination known to attract snow birds and tourists from all over the world because of our warm winters, spring training months, golfing, hiking and all of the other amazing things Phoenix is known for. Tempe is home of ASU and just south of Scottsdale, close to the airport and Old Town Scottsdale.. and the short term rental market is booming here.

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

A realtor friend of mine on Instagram sent the home to me when she saw it on the MLS, I checked it out, put in an offer at asking (priced very well) and went under contract right away.

How did you finance this deal?

Conventional financing with 25% down as an investment property.

How did you add value to the deal?

I put about 15k into redoing the flooring upstairs, as well as paint, fixtures, vanities, cabinets and counters.

What was the outcome?

I started cash flowing the second month the listing was live on Airbnb, and will be cash flowing over $2500 during the busy spring training months (Jan - March). It's been a very good experience on Airbnb so far (just reached superhost status after q4 2019). Hoping to cash flow 15k + through the 2020 year.

Lessons learned? Challenges?

HOA's can be a bit tough to navigate, I will be gravitating towards SFH's in the future.

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

Since this investment, I recently got my real estate license and transitioned into selling real estate as my full time career. I am very passionate about the short term rental market here, and look forward to helping as many people as I can invest in rentals of their own, with the goal of 15%+ cash on cash ROI in mind!