Buy and Hold, Airbnb investment

[Daren Reno]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $130,000
Cash invested: $50,000

I purchased this 3bd 2ba property from the bank using a 203k Loan. I purchased the property for 130K and borrowed 30k for a new roof, windows, stucco repair and exterior paint.Total mortgage 160k. The Interior rehab was all sweat equity and approx 10k. I now Airbnb the property full time as a 2bd 2ba. I avg. 1400 a month in cashflow. The rest of the house is under renovation and i plan to convert the remaining square footage into 2 more bedrooms making it a 4bd house.

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

I enjoy taking something broken and making it new again. I enjoy the Airbnb model because I love to create spaces that people can enjoy and feel at home.

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

I found it on the MLS. The asking price was 149900 i offered 125k because of the repairs that needed to be done and we agreed on 129900.

How did you finance this deal?

I financed this deal using a FHA 203k loan with a local lender

How did you add value to the deal?

Using the 30k borrowed from the 203k loan I had a new roof and new windows installed. Interior rehab was mostly sweat equity. I updated the kitchen, new carpet throughout and paint.

What was the outcome?

I finished the main part of the house and now rent it full time on Airbnb.

Lessons learned? Challenges?

I learned to never under estimate rehab time. On the surface it seemed like a fast rehab but once i started getting into the rehab i found lots of water damage that i needed to repair. Mostly in the kitchen. I had to tear the kitchen completely down to the studs and rebuild.

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

My real estate agent was Tom Whatley with Steinborn and Associates. I highly recommend Tom.
I also recommend my loan officer Don Gibbons with Cornerstone lending.