Investment Info:
Single-family residence buy & hold investment.
Ramblin Rose Cabin- 4 bed 3 bath cabin in the beautiful Black Hills of South Dakota. It is currently being used as a Short Term Rental.
What made you interested in investing in this type of deal?
The Black Hills have been known as a great vacation destination in the mid-west. Vacationers come from all over to sightsee, ride ATVs, or ski/snowboard. With more people booking short-term rentals, we thought it would be a good investment to build a cabin in the hills for people to get away for the weekend.
How did you find this deal and how did you negotiate it?
We found a lot for sale close to the local ski area and purchased the lot with cash from a HELOC. We used the land as collateral for a new construction loan. After the construction was complete, we rolled the cost of the land into the our new loan. Getting our initial lot money back and leaving us with no money down.
How did you finance this deal?
New construction loan
What was the outcome?
We continue to use this property as a short-term rental, and has been cash flowing every year.
Lessons learned? Challenges?
The biggest lesson I learned was to be present during the construction. There were a few shortcuts the contractor did that I didn't find out until the cabin was finished. Also, find a good property manager to manage your investment; it will make your life much easier.
