First Short Term Rental: BRRRR A-Frame Lake House

[Patrick Riley]

It's always difficult to objectively evaluate an investment property that you also want to use and enjoy yourself. I always try to avoid these emotional tightropes but when a wholesaler offered a contract on an A-Frame house about a mile from a nearby lake & marina I was intrigued. I walked the property and it was clear it needed a full gut rehab but with the right purchase price, though, it could be the elusive AirBNB property that is also a fun vacation home.

Based on my estimated rehab cost, I worked backwards to determine a purchase price using the 80% rule. With that I calculated my PITI if I financed nearly all of my all in cost.

On the revenue side, I reviewed comparable nightly rate and occupancy data with AirDNA and arrived at a monthly revenue figure. Subtracting PITI and OpEx, it appeared that I would still be able to make a small profit with reasonable margin with almost no money of my own in the deal. I negotiated with the wholesaler and we had a deal!

Purchase Price: $37.5k

Rehab: $75k

All in: $112,500

I am ways into the rehab process as of this post but I will periodically post updates and at some point I will catch up to current progress. Below are some before pictures.