All Forum Posts by: Patrick Gledhill

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $190,000
Cash invested: $39,000

Contributors:
Caleb Drake

Turn-Key Air BNB in Pensacola in the outskirts of the city. Seller lives next door. They flipped this house with full rehab and ran it as an Air BNB for the last 2 years with a 95% occupancy rate and a 4.99 rating with 130 ratings. They were able to provide me with income documentation and occupancy numbers from Air BNB. The house was expertly decorated and furnished and all of this was negotiated into the deal.

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

I started my journey with a house hack air bnb in my basement of my primary residence, also I wanted a vacation home in Florida. I knew that I could pull off my first deal as an STR, this was the path I went.

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

Caleb Drake and Hannah Hurt with EXP 5 Pillars.

How did you finance this deal?

I pulled a heloc from my primary residence.

How did you add value to the deal?

It was sort of turnkey, but during negotiations we added a new roof and septic system. However, The property has a hollow block detached garage that is very large. I plan to turn this into a 2nd BNB on the property.

What was the outcome?

House is booking on air bnb!

Lessons learned? Challenges?

I Need to listen to agents better. This was in many ways a humbling experiance. Do not try to think you know more than them if you are not an agent yourself! Especially if you live long distance. One major challenge for me that gets overlooked on the podcast is that it took me about 6 months to get approved by a lender even after I had secured the funds. If you are thinking about getting your first deal and you want traditional financing, make sure you start now to get your approval letter.

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

Caleb Drake and Hannah Hurt with EXP 5 Pillars! Super Awesome.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $190,000
Cash invested: $39,000

Contributors:
Caleb Drake

Turn-Key Air BNB in Pensacola in the outskirts of the city. Seller lives next door. They flipped this house with full rehab and ran it as an Air BNB for the last 2 years with a 95% occupancy rate and a 4.99 rating with 130 ratings. They were able to provide me with income documentation and occupancy numbers from Air BNB. The house was expertly decorated and furnished and all of this was negotiated into the deal. From wall hangings to the record player and games, including bath and beach towels, and all dishes, cookware, YOU NAME IT! We had them put on a new roof. And discovered during inspection that septic system was bad, they replaced the whole thing at no additional cost to me. I flew out for closing, all I had to do was stock the place with 6 months supply of cleaning products, and ammenities. Changed out thermostat and front door lock with smart devices so I could monitor from home. Closed on May 8th and had my first booking for memorial day weekend. The neighborhood is a little bit away from desirable locations, but the solid 2 years of booking history and exceptional reviews outweighed this. House is in a peaceful location away from busy traffic. 12 minutes to airport, 25 minutes to pensacola beach and alabama beaches. I intend to keep this property and maintain it's great status on Air BNB! What a great experience!

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

I started my journey with a house hack air bnb in my basement of my primary residence, also I wanted a vacation home in Florida. I knew that I could pull off my first deal as an STR, this was the path I went.

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

Caleb Drake and Hannah Hurt with EXP 5 Pillars.

How did you finance this deal?

I pulled a heloc from my primary residence.

How did you add value to the deal?

It was sort of turnkey, but during negotiations we added a new roof and septic system. However, The property has a hollow block detached garage that is very large. I plan to turn this into a 2nd BNB on the property.

What was the outcome?

House is booking on air bnb!

Lessons learned? Challenges?

I Need to listen to agents better. This was in many ways a humbling experiance. Do not try to think you know more than them if you are not an agent yourself! Especially if you live long distance. One major challenge for me that gets overlooked on the podcast is that it took me about 6 months to get approved by a lender even after I had secured the funds. If you are thinking about getting your first deal and you want traditional financing, make sure you start now to get your approval letter.

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

Caleb Drake and Hannah Hurt with EXP 5 Pillars! Super Awesome.

Hi, for Marketing, find out what brings most of your guests and come up with a creative name that stands out and is catchy. 

I would also recommend 2 night minimum to reduce work with turning over after each guest. 

I work for a general contractor (industrial not residential) but this sounds like horrible business on their part. Plus if they were supposed to finish by April, what sort of Liquidated Damages are you able to collect since they have breached contract? Even if they gave you the worst contract imaginable and you signed it. I would still fight them for lost money. And threaten legal action and smearing their name across the internet. If the market value went up 100k in the last year like it did here in Denver they should at the very minimum split that loss with you 50/50. Write them a nasty letter first to show them you are serious and see how they respond. Ask them if they would be willing to resolve the matter without expensive lawyer fees. And if they refuse then bring in an arbitrator... if that fails then look for a lawyer. Don't just let them get away with this. Especially if you have sunk your hard earned money into the land or anything else for this. Not right for them to just wipe their hands and make it your problem. 

@John Underwood Yeah good call. these are some great ideas towards automating the Air BNB. Aside from automating cleaning and booking, I still don't like the idea of people coming and going all the time, and my dog and wife don't either. I'm sure I could reduce turnovers to a point that would be more comfortable. Thanks for the feedback! 

@Jeffery Wilen YES this seems to be what I have discovered. I think LTR is the way to go for this particular case. I don't mind being a property manager in my own house. For one person who stays in that unit for an extended period of time. Even if I found a way to automate STR, just having a madhouse of people coming and going is super stressful for me as a fulltime guy. Also I have a German Shepherd, and I have to let the dog acclimate to each guest and this alone proves to be a huge pain. LOL I'm glad I was able to experience Air BNB though. Thanks for the input.

@Stephen Brown YES! The goal is to free my time up. If I can find a way to automate the unit using STR then it could be feasible.

Yes exactly! Once I have more properties I will definitely want them to only be truly passive income generators that are professionally managed. Zero work for me. The ultimate goal is to free myself from time restrictions, not add more of them! However, since this is my primary residence, I can be the manager of the unit as a long term rental. And I will have to look into some of the ideas people have given me in this post to see if there is a feasible way to automate STR for this particular unit. Otherwise it simply is not worth it. Thanks for your response!

@Ken Boone

@Dustin Allen Yeah good call. Reduce turnovers. Thanks!

@Dave Stokley I figured someone probably had this figured out! Do you manage properties all over the US or just locally? I'd be interested to hear more about your fees / business model. I need to test out the max rate I can charge, I keep upping the rate and still am getting bites... Thanks for the feedback!