Buy and hold luxury vacation rental in Joshua Tree, CA which we own, designed, and manage. One of the top earning vacation rentals in Joshua Tree and an Instagram micro-influencer in the travel space. Boasts in total 4 bedrooms, 3 baths, chef’s kitchen, wood burning fireplace, lounging areas & decks, custom 14ft x 7ft hot tub, in-ground swimming pool with cabana, outdoor 42" propane fire pit, 65 year old cactus garden, boulders galore, & incredible desert views

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

Became an accidental real estate investor when we rented our condo to a neighbor for 3 years. When we went to sell we found out about the CA taxes and started looking for a 1031 exchange. The options in the LA area were not appealing, but after 10 years of visiting Joshua Tree it was on our radar and when we saw this property we knew it would make an amazing investment and vacation property.

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

We found it on Zillow and it was 100k over our budget, but we decided to include it on the properties we went to go see and the night before we went to tour the home they dropped the price 100k! We made the offer right away (used the listing agent who had a sterling reputation) after walking the property, especially after seeing multiple other homes that day. We were the back up offer, but they backed out and the house was ours.

How did you finance this deal?

We did a 1031 exchange and worked with a local broker for a conventional loan, as Joshua Tree is a two tier market of very low priced homes (for California) and a few luxury properties, so it is hard to get comps. Thankfully our local broker was a star and really knew the area and market.

How did you add value to the deal?

The previous owners really wanted the new owners to be good stewards of the home. Having gone to architecture school, I was able to appreciate the care put into preserving the architecture and the landscape, and talk with them about it getting then excited for our plans as well. It was more emotional equity that built good will and helped the stick with us through the ins and outs of the 1031 escrow process.

What was the outcome?

After cosmetic work to upgrade the interior and furnish, building a social media presence, and adding a GIANT hot tub, Success! In 2 years we became one of the highest grossing vacation rentals in the area and are looking to expand our portfolio.

Lessons learned? Challenges?

Get to know the neighbors early, they can make or break a vacation rental by being helpful eyes on the ground or a thorn in your side.
Think of ways to overcome seasonality & focus investment dollars to adding amenities that boost your listing in the off season, you only have 1 door so work to make year round income.
Happy to share all I've learned about vacation rentals, STR management, guest vetting, providing a luxury guest experience, & stretching that investment dollar in the STR space.

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

Diane Giannelli with First Nations Home Finance Corp in Yucca Valley was an absolute MVP getting us a loan when no one else could and has since helped us refinance with the recent low rates. Highly recommend.