Truth be told, this deal was 2.5 years in the making! That's right, 2 years! It initially came on the market in December of 2019 and was purchased by a family after sitting on the market for a few months. After a somewhat lucky "direct-to-seller" campaign, we were fortunate enough to connect with the sellers and purchase this lovely home! Here is the story of how we did it, some before and after photos, and a quick glimpse into how it's doing now that we've been live with the Airbnb/VRBO listing for 14 days!
Would you like to vacation in this lovely escape? Read to the end of the article and book your stay. We are currently running a promotion for 10% off bookings!
Getting right to it - how did we find this off market deal? We saw it on Redfin 2 years ago and decided to reach out to the new home owners directly. Looking up public records, we found an email address sent the owners an email asking to give them a competitive offer on their home, if they ever wanted to sell. Turns out they did!
Sellers Offer Price: $420,000
Our Counter Offer: $430,000 with the seller to cover closing costs..
Offer Accepted!!
Contingencies: None - The sellers shared with us the inspection report from 2019 and shared a maticulous list outlining the $40,000 that they had put into the property.
Closing Date: 3/20/2022
Next Steps....
Next we had to clear most of the house out. As you will see from the before and after photo's, we made thoughtful changes to prepare the house for short term rentals. We removed all clutter, maximized sleeping space, updated all of the electronics to smart TVs, added a hot tub, and injected some much needed "mountain" vibes.
It took a bit of elbow grease, but after a few months of changing over furniture, stocking the house with essentials, and adding amenities such as a hot tub, we were officially live on AirBnb and VRBO 10 days ago!
So here are some of the numbers.
We put 10% as our downpayment using a vacation home loan. That meant that we came to the closing table with $43,000. We borrowed that money from the equity in our Cape Cod vacation rental home - effectively never having to touch our savings account. We put $25,000 - $30,000 in furnishings and odds/ends into the house to get it rent ready.
Using our technology/management software and dynamic pricing tool we are now almost fully booked in July and August....and this was supposed to be the slow season!
We anticipate that we'll gross roughly $85,000 in the first 12 months, which leaves a net revenue of roughly $45,000 after all expenses.
That leaves a net return on investment of.....62% - or for those of you that only count that cash out of pocket (furnishings)...a return of 150%. Not to shabby!
I will admit, getting returns like this does not happen by accident. There is branding, marketing, business systems, technology, and extreme drive that makes it happen, but this shows you what can be possible as you parlay previous investments into new, solid investments.
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