{"id":128813,"date":"2020-08-26T05:00:31","date_gmt":"2020-08-26T11:00:31","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=128813"},"modified":"2022-08-09T09:29:08","modified_gmt":"2022-08-09T15:29:08","slug":"meet-investors-strategy-brrrr-airbnb","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/meet-investors-strategy-brrrr-airbnb","title":{"rendered":"Meet the Investors: BRRRR + Airbnb = The Perfect Mashup Strategy With Shelby Osborne"},"content":{"rendered":"<p class=\"p1\"><span class=\"s1\">Meet the fabulous <a href=\"https:\/\/www.biggerpockets.com\/users\/ShelbyO\" target=\"_blank\" rel=\"noopener noreferrer\">Shelby Osborne<\/a>, a friend of mine. She&#8217;s an investor. She&#8217;s a veteran. She&#8217;s a Realtor. She&#8217;s kind of a pain in my side. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">More than anything, she is a successful BiggerPockets story. She invests, like me, in people first and real estate second. She has leveraged the BiggerPockets community to maximize her time to an extensive degree. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">Let&#8217;s meet her right now!<\/span><\/p>\n<p><iframe loading=\"lazy\" src=\"https:\/\/www.youtube.com\/embed\/saq1C9mwxQg\" width=\"560\" height=\"315\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/p>\n<h2>The Investor<\/h2>\n<p class=\"p1\"><span class=\"s1\">What up? My name is Shelby Osborne. I am a local real estate agent and investor (first!) in Fayetteville, North Carolina, with Five Pillars Realty Group. I was in the military for six years before getting out and pursuing real estate investing full-time. And I started as an investor, went through one deal with another agent, and decided, \u201cPsh, I can do that.\u201d <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">Since then, BiggerPockets has changed my life, legitimately. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">I know that sounds like a plug. <\/span><span class=\"s1\">However, when I first got into real estate, I literally watched all of Brandon Turner&#8217;s videos. I <a href=\"https:\/\/www.biggerpockets.com\/calc\" target=\"_blank\" rel=\"noopener noreferrer\">played around on their calculators<\/a> until I figured it out. I <a href=\"https:\/\/www.biggerpockets.com\/forums\" target=\"_blank\" rel=\"noopener noreferrer\">got in the forums<\/a>, I asked questions. So all of the normal stuff that everyone does. But now it&#8217;s flipped into huge leverage for my business, which is insanity. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">My business almost exclusively comes from BiggerPockets members. People try to invest in real estate in Fayetteville because it&#8217;s a great market to invest in. And then also in regard to leverage, I use it as a training pipeline for my clients. If they don&#8217;t know what BiggerPockets is, I&#8217;m like, \u201cYou&#8217;ve got some homework to do before we start investing.&#8221;<\/span><\/p>\n<h2>The House<\/h2>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-95924 size-full\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2018\/01\/airbnb-tips.jpg\" alt=\"airbnb-tips\" width=\"702\" height=\"336\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2018\/01\/airbnb-tips.jpg 702w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2018\/01\/airbnb-tips-300x144.jpg 300w\" sizes=\"auto, (max-width: 702px) 100vw, 702px\" \/><\/p>\n<p class=\"p1\"><span class=\"s1\">In the video above, we&#8217;re looking at the Broadfoot bungalow, which is my BRRRbnb. Get it? So it&#8217;s a BRRRR property turned into an Airbnb.\u00a0<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">I originally started looking for a property for a dual purpose. First, I needed somewhere else to live. Second, I wanted a super cool house so that I could have a Pillars party house that we would work out of, but we would also have really cool stuff in the backyard to hang out. We have a kegerator, all that stuff. So I started scouring this area. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">This area is five minutes from downtown. It&#8217;s in the historic district, where there&#8217;s hardly anything on the market. This was a for sale by owner with a sign in the front yard\u2014a really dinky little sign that I just called. It was listed for $130,000.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">I got it for $109,000, put a little bit of money into it, and then started working here with Pillars. We started working here until we grew, had a lot of cars in the front yard, and then, of course, got in a little bit of trouble with the city. So we got kicked out of here as our hang spot\/workplace and started working somewhere else. And then I decided that I didn&#8217;t need this much room for myself, so I started Airbnb-ing it out.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">Since I got this house for myself personally, it&#8217;s pretty baller. The k<\/span><span class=\"s1\">egerator was a gift from our long-term property manager, who we send a ton of referrals to. When we had all the people here in the house working as Pillars, he came over and special-delivered it to us.\u00a0<\/span><\/p>\n<p><em><strong>Related:<\/strong> <a href=\"https:\/\/www.biggerpockets.com\/blog\/pros-cons-airbnb\" target=\"_blank\">The Pros and Cons of Renting Your Place on Airbnb<\/a><\/em><\/p>\n<p class=\"p1\"><span class=\"s1\">I couldn&#8217;t actually tell you what hosting an Airbnb is like. Honestly, I&#8217;m not sure because I have a property manager, I&#8217;ve completely hired it out. <\/span><span class=\"s1\">But what you find when you come back to your Airbnb after not being there for a while is that people don&#8217;t care about it as much as you do\u2014and they have really bad aim.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">In the kitchen, all I did for rehab was I updated all the appliances to stainless steel and then I did a dope floor.\u00a0<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">The story of this house is pretty cool. It was an off-market deal, and originally the intent was to buy it and have it as my primary residence, but also a place where my team can work out of. It was awesome. We had standing desks in the front room. We had printers in the back. In the backyard, we had a trampoline, we had cornhole. So that way you could live in this environment and also be highly effective in your workspace. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">That didn&#8217;t work out long-term, but it turned into a pretty baller Airbnb. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">In one bedroom, I have bunk beds because you can sleep more people and charge more for your Airbnb. <\/span><span class=\"s1\">I didn&#8217;t do much to the bathrooms, although I did change out the mirror and update the fixtures. You&#8217;d be surprised\u2014fixtures are the stuff that makes it go from dated to updated just like that. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"> The tiny little place on the end was my room. <\/span><span class=\"s1\">And funny story, actually, when I moved in, this area was not as nice as it is now. One window was broken because someone kicked it in and there was glass all over the floor.<\/span><\/p>\n<h2>The Numbers<\/h2>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-109598 size-full\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/04\/loan-calc.jpg\" alt=\"Close up view of bookkeeper or financial inspector hands making report, calculating or checking balance. Home finances, investment, economy, saving money or insurance concept\" width=\"702\" height=\"336\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/04\/loan-calc.jpg 702w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/04\/loan-calc-300x144.jpg 300w\" sizes=\"auto, (max-width: 702px) 100vw, 702px\" \/><\/p>\n<p class=\"p1\"><span class=\"s1\">I haven\u2019t looked at the numbers for this house for a while. So I pulled them up on a calculator, just like I did when I bought it. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">Purchase price: $109,000. Closing costs of $2,500. It was a cash purchase, and this accounts for inspections, attorney costs, the cost it took to draw up the private money loan agreement, promissory note, all that stuff. All the repairs for $13,000, that&#8217;s $11,000 in actual repairs and $2,000 in putting in the remainder of the items to make this a cool Airbnb, because, again, I was living here, so the majority of this stuff is my furniture.\u00a0<\/span><\/p>\n<p>That gives us a total project cost of $124,500 and an ARV of $165,000.<\/p>\n<p class=\"p1\"><span class=\"s1\">To break this down a little bit, the monthly income of $1,715 is an average of what my Airbnb produces in the months that I&#8217;ve had it. Because those of you with Airbnbs know, it&#8217;s not a fixed rate income. So I&#8217;ve had months where I&#8217;ve brought in like $2,400. I&#8217;ve had months where I brought in $1,000. So I averaged it over my time having it to come up with this amount.<\/span><\/p>\n<p><em><strong>Related:<\/strong> <a href=\"https:\/\/www.biggerpockets.com\/blog\/beginners-guide-brrrr-financing-opm\" target=\"_blank\">The Beginner\u2019s Guide to BRRRR Financing with Other People\u2019s Money<\/a><\/em><\/p>\n<p class=\"p1\"><span class=\"s1\">I do want to mention, first of all, that this is a BRRRR. So I bought this property, then rehabbed it and refinanced it. So something I do want to point out is that in expenses, a lot of times people will account for, of course, property management, vacancies, repairs, capital expenditures. So what I do with my properties is I take everything I make and throw it into my reserves until I meet reserves.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">So that&#8217;s why I don&#8217;t plan for it. I&#8217;m just taking my entire cash flow and putting it into my reserves until I hit that number. <\/span><span class=\"s1\">Also, the monthly income is already after property management was accounted for.<\/span><\/p>\n<h2>Advice for New Real Estate Investors<\/h2>\n<p class=\"p1\"><span class=\"s1\">For a new real estate investor just starting out, there are three things that you should know.<\/span><\/p>\n<ol>\n<li class=\"p1\"><span class=\"s1\"><strong>You cannot replace the work.<\/strong> You have to put in the hours. You have to listen to the <a href=\"https:\/\/www.biggerpockets.com\/podcast\" target=\"_blank\" rel=\"noopener noreferrer\">podcasts<\/a>, read the <a href=\"https:\/\/www.biggerpockets.com\/store\" target=\"_blank\" rel=\"noopener noreferrer\">books<\/a>, study. You cannot replace the time that you put in. You have to learn it.<\/span><\/li>\n<li class=\"p1\"><strong>You have to surround yourself with like-minded people<\/strong>\u2014like-minded or people that you aspire to be like. And if you don&#8217;t have that in your direct life, you need to find it. Find it on the <a href=\"https:\/\/www.biggerpockets.com\/forums\" target=\"_blank\" rel=\"noopener noreferrer\">BiggerPockets Forums<\/a>, find it in a local <a href=\"https:\/\/www.biggerpockets.com\/forums\/521-events-and-happenings\" target=\"_blank\" rel=\"noopener noreferrer\">real estate investors meetup<\/a>. If there&#8217;s not one, create it. Create the environment that you want to be a part of.<\/li>\n<li class=\"p1\"><strong>Become best friends with Alex Felice.<\/strong> And then you get these amazing opportunities.<\/li>\n<\/ol>\n<p>I know I just spent a lot of time goofing around, being zany, having fun. And it is a lot of fun and games, but it&#8217;s not all fun and games. You have to take this really seriously.<\/p>\n<p><span class=\"s1\">I bought this property with private money. I rehabbed it with private money. No one&#8217;s going to lend you money if you don&#8217;t know your numbers, if you don&#8217;t know what you&#8217;re doing. This is a business that is built on trust and relationships. So make sure you don&#8217;t take that for granted, especially when you&#8217;re using someone else&#8217;s resources. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">But it&#8217;s also awesome because you can have a ton of fun. I freaking love this life. My name is Shelby Osborne and I&#8217;m a real estate investor. Every day I wake up and try to be more. <\/span><span class=\"s1\">I want you to join me.<\/span><\/p>\n<p><a href=\"https:\/\/www.biggerpockets.com\/calc?utm_source=blog\" target=\"_blank\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-117195 size-full\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/10\/Signup_3.jpg\" alt=\"\" width=\"728\" height=\"90\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/10\/Signup_3.jpg 728w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/10\/Signup_3-300x37.jpg 300w\" sizes=\"auto, (max-width: 728px) 100vw, 728px\" \/><\/a><\/p>\n<p><em>What resources have you found most helpful on your investing journey?<\/em><\/p>\n<p><strong>Let us know in the comments below.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Check out how one private money investor turned a BRRRR property into a live-work space, then an Airbnb, with a few easy strategies.<\/p>\n","protected":false},"author":14645,"featured_media":113998,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[7355,7271],"tags":[],"class_list":["post-128813","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-brrrr-method","category-short-term-rentals"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/128813","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/14645"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=128813"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/128813\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/113998"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=128813"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=128813"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=128813"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}