All Forum Posts by: Duane Napier

Hello BiggerPockets family & Happy New Year! I wanted to create this post to the BiggerPockets community as the first audience to showcase this deal. I hope this is the correct forum. I am selling a STR deal that I have been working on in Page AZ just minutes away from Lake Powell. The property is an off-market, 4 bedroom, 2 bath property that has been well-maintained as a single family residence. I live in Ohio and have worked out the major aspects of this deal with the owner who is a friend of mine. I am planning a trip to the property in January to examine the property with the owner and to provide feedback on the needed updates (including adding a hot tub). Based on our other STR's, we're assuming $30K will be needed in updates to launch as an updated STR (we hope this is a conservative number).

Buyer requirements: The buyer needs to be an experienced STR investor who is willing to work within the parameters of this deal and have the means to invest $250K. This is a legitimate deal and very qualified. I am not looking to get bombarded with people wanting details about this property who aren't qualified so please respect that. I have the key data points of this deal below, and if you are an experienced STR investor who actively manages your properties, feel free to reach out to me so we can discuss your experience and interest in this deal in more detail.

Deal Mechanics:

Home market value: $500K

Mortgage: $0

Pricelabs Revenue range: $45,000 – $61,000

AirDNA Revenue Estimate: $72,000

Updated Needed: Yes – minor kitchen updates, paint, décor, furniture, additional beds and a hot tub, possibly new 220 electric to the hot tub.

Home Condition: Good, no major repairs needed.

Seller Ownership: Seller to retain 25% ownership and be a silent partner.

STR investor ownership: $250K buys 75% ownership, payable to owner.

Title: At close the title will be placed into 1 or 2 LLC's (based on a Joint Venture or an LLC between the 2 parties), etc. what ever options makes the most sense.

Expectations: STR Investor will manage the STR on multiple platforms and split the NOI proceeds 75/25 with the seller, who will remain 25% owner.

I have committed to selling this deal to a qualified STR investor and will be very involved in the buy/sell to the right STR investor. I am helping this owner get into the STR market so they can learn and benefit from this deal financially as a minority owner.

Additional ask: I would like to get in contact with a real estate attorney and CPA that practices near Page AZ. There are aspects of this deal that will need ironed out as we get closer to the purchase involving a Trust and a pre-existing cost basis for the owner that must be managed properly for tax purposes.

Thanks in advance, looking forward to talking with qualified STR investors about this opportunity.

Investment Info:

Single-family residence buy & hold investment in Shawanee.

Purchase price: $400,000
Cash invested: $150,000

We completed this new custom home build in November 2023 on the 20 acres we purchased in 2021. We used a construction loan + our own cash to build out this custom STR featuring 3 loft-net hammocks that we purchased from France and is the same netting used in catamaran boats.

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

We purchased 20 acres with the intent on building STR's. We invested more on this modern build than initially intended however we are confident the STR will generate cash flow and appreciate the property value as intended.

How did you finance this deal?

Combination of construction loan and personal cash.

Lessons learned? Challenges?

Get great contractors, get everything in writing and think through all the work needed for the finishing touches.

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

We worked with @adamratliff to purchase the land in 2021, I highly recommend him as an agent in the Red River Gorge and Cave Run lake area.

Investment Info:

Single-family residence buy & hold investment in Wellington.

We purchased 20 acres at Cave Run lake in Kentucky, near Red River Gorge. We flipped an existing mobile home that was on the property, converting it into a log cabin which was our 1st STR. We have been developing the land to support multiple STR's.

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

We were interested in buying this 20+ acres property because it's in an area that attracts local and out of state visitors to the area to the Daniel Boone National Forest. We were certain that we could develop the land to accommodate multiple STR's.

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

A local real estate agent #adamratliff knew of this off-market property. We came in and offered $40K less than asking. The offer was accepted as long as we could close in 3 weeks.

How did you finance this deal?

We put down 20% and used a local private bank for the loan.

How did you add value to the deal?

1. Flipped a mobile home into a log cabin complete with poplar tongue & groove wood on the inside, D-log on the outside, converted a cement porch into a game room, added a mud room, metal roof and a very large river rock courtyard with firepit.
2. Rehabbed the property entry way from the main road
3. Added a large private parking area
4. Added a new front porch and extra-wide concrete sidewalk leading to the cabin
5. Added a nature trail to the 20 acre property for use of STR renters

What was the outcome?

The STR cabin performed 2x our projections and the local bank re-appraised our property enabling us to leverage a Heloc to build a 2nd cabin on the property.

Lessons learned? Challenges?

We nearly got burned by the 1st contractor that we hired for the rehab.
1. Do NOT pay contractors until the work is finished and do NOT agree to a draw schedule. Only pay on completion of work.
2. Pay contractors with credit cards so if things go wrong, this can be used as recourse.
3. Be willing to WAIT for the good contractors, if they are available tomorrow, that should be a serious red flag.
4. Put contracts in place for all work to be done that includes timelines and penalties.

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

Adam Ratliff out of Frenchburg Ky is an excellent agent! Highly recommended.