Real Estate Investing Case Study | Angle Lake AirBNB

This deal was sourced on market, secured with Owner Occupied Conventional financing.  Monthly cash flow ranges with the season; First year generated a 21.9% Cash on Cash Return.

Real Estate Investing Case Study | Angle Lake AirBNB

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Deal Overview

  • Sagareus Advisor purchased this property off the MLS
  • Initial plan was to House Hack this property by renting out the mother in law unit
  • Long term appreciation was a key determining factor; New light rail going in

AirBNB investing joe nalley real estateThis picture got me emotionally attached to the deal 

 

AirBNB investing seattle joe nalley real estate

View from back dock

Deal Source

  • MLS - Offer made within hours of listing; Mutual on Day 1 of listing
  • Purchased Price - $700k with 10% down

Initial Analysis

  • Live upstairs and rent out the lower level
  • Wait for appreciation

Airbnb house hack seattle joe nalley real estate

Dated, but appeared to be well maintained 

Due Diligence

  • Confirmed Rental Comps
  • Accepted deal AS-IS; Inspection for verification purposes only.
  • Very little diligence due to competitive market

Financing

  • Conventional, Owner Occupied loan
  • 10% down, 30 years fixed, 3.75% interest

airbnb real estate investing joe nalley real estate

Full mother in law unit downstairs with slider out to lake + dock

Stabilization

  • Many unexpected repairs

  • Roof, deck, basement, plumbing, burglary

 

house hack real estate investing airbnb joe nalley

Short Term, Vacation Rental was the way to go on this property

Outcome

  • With lake side property, we decided to converted to an AirBNB
  • First year income - $18,834.23
  • ROI = $18,834.23 / $86,000 = 21.9%

Lesson(s) Learned

  • Don't get emotionally attached to a deal
  • Don't underestimate repair costs, especially if everything looks dated but in good condition
  • Always consider multiple exit strategies
  • Be careful of budget creep

I originally set out to buy a $200k condo and ended up with a large, waterfront home.

  • Highest and best use for many residential properties is currently short term rentals

 

 

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