Investment Info:
Single-family residence buy & hold investment in Surfside Bch.
Purchase price: $190,000
Cash invested: $40,000
Beach House on Texas coast purchased for STR income.
What made you interested in investing in this type of deal?
Initially looked at LTRs in our area, but decided it would be nice to have a rental that we could enjoy periodically as well...which, in reality, never happens. :-)
How did you find this deal and how did you negotiate it?
Used a broker down on the island. Pretty standard negotiation using comps and way too much emotion.
How did you finance this deal?
20% down traditional loan. As a "destination area", we were not required to put down 20% and may not have now that we know more...but, it seemed like the right thing to do at the time.
How did you add value to the deal?
Hurricane Harvey...we bought in July 2017....spend a few weeks putting about $5000 in cosmetic touches and furniture into the place...then a week after that was done, Harvey tore part of the roof off. Insurance covered about $60K in new cabinets, countertops, floors, walls, furniture, etc.
What was the outcome?
Rentals have been solid. We use a property manager as the law requires these properties be managed by someone within an hours drive (which we are not) and that takes 20% off the top. But, we have kept it rented since the repairs were completed and had a long-term renter over the winter months. Current value of the house is around $230K. We netted (after property management and repairs) $18,000 in rental income in 2018.
Lessons learned? Challenges?
We probably would have put less down just to have some cash to do other things...the insurance by the water is crazy...between wind, flood and H/O, we pay over $5,000 annually. And taxes are pretty high considering the size of the home.
