This is an exciting and daunting project all at once. It is one that if I didn’t have experience with extensive rehabs then I wouldn’t even get close to it. That being said, the property is in a great location that I anticipate will have extremely high demand once it begins welcoming short-term rental guests.
The property was being run as a slummy motel. My plan is to completely renovate it and turn it into an 8-unit Airbnb property. It is in downtown Fort Walton Beach and the area has an extremely high demand for short-term rentals, especially units with affordable nightly rates. I have projected conservative nightly rates based on the comps in the market and expect it will perform very well. After the rehab is complete, I will refinance, pay back my private money investors, and hold for cash flow.
As of writing this, we have just completed demolition and we are in the midst of getting the new roof put on and re-wiring the entire building. You can watch video updates and get insight into the project on my YouTube Channel here.
It is still early in the rehab so I will update this post when there is more to share – so stay tuned!
- Purchase Price: $357,000
- Closing Costs: 3,231
- Financing: The seller financed $282,000 (about 80% of the purchase price)
- Due Diligence Costs: I looked out and one inspector shared the report he had already completed on the property.
- Rehab Costs (projected): $177,000
- Furnishing Costs (projected): $56,000
- My Investment: $10,000
- Amount of Private Money Raised: $280,000
- Time from Purchase to Refinance (expected): 6 months
- Expected Refinance Valuation: $890,000
The project is still in the works but so far lessons learned have been how to deal with extremely difficult sellers. This deal almost did not close because of borderline madness by the seller, but with the help of my awesome title agent, Emily Kurtz, we made it through and closed the deal. She almost acted as a broker between the two of us because every time the seller and I spoke he would go on and on and on and I couldn’t take it anymore. Thank you, Emily.