Sweetwater Townhome Short-Term Rental

[Ashley Byington]

Investment Info:

Townhouse buy & hold investment in Rigby.

Purchase price: $170,000
Cash invested: $18,906

This unit is a brand new townhome located in the Sweetwater Housing PUD in Rigby, Idaho. We are furnishing this townhome to be used as a short-term rental.

There will be a total of 56 units in 14 buildings (4 units/building) when the project is complete. Common spaces will include a large park-like area in the center with hardwood trees, picnic shelters, and a playground. The estimated completion for the development is Summer 2021.

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

We prefer new/newer properties that will require less maintenance and improvements upfront. With the exception of a few things like installing a few appliances, we won't have any major capital expenditures or repairs for some time. These units are in a community with an HOA which maintains the exteriors, landscaping, and snow removal.

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

I worked for a real estate team that listed and sold all of the units on behalf of the developer.

How did you finance this deal?

We worked with a local credit union that offers 10-15% down loan programs (with no PMI!) to investors.

How did you add value to the deal?

We installed a refrigerator, washer, dryer, and shower door in the master bath. Otherwise, nothing was needed to make it "rent-ready." Since this will be a short-term rental I will be decorating, furnishing, and getting it ready for guests to maximize cash-flow.

What was the outcome?

We were able to lock in the sales price of $170,000 by making an offer more than a year before they were completed. Our appraisal was $230,000 so we had additional equity upon closing.

Lessons learned? Challenges?

I'm going to keep an eye out for new developments and opportunities to work directly with builders. I would eventually like to build our own with a construction loan.

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

We worked with Mountain America Credit Union for financing.