I posted this on the Facebook group in hopes of inspiring others with my story, so thought I post on here as well to reach and inspire more people.
“Hello all my amazing friends it has been A LONGGG time coming but, I have officially closed on my second deal at 20 years old, in the Great Smoky Mountains of TN. This one has been a LONGG time coming. Back in April I first learned about the opportunity with short term rentals from one of my friends Eli. He was and still is absolutely crushing it, but the price point of these cabins being $500k and up intimidated me so I wrote it off especially since I was still trying to rent 5 bedrooms in my first house hack 2,000 miles away on a high stress military field exercise. That same month I read the One Thing by Gary Keller and that changed my entire perspective on what was possible. I soon got to work trying to figure out how I a 19 year old kid with 1 property on a $20k salary could afford to buy a $500-600k house. Instead of looking at my age and what I was lacking as a weakness I decided to look at my strengths and made a goal to buy a Short Term Rental before I turned 20 which was late August.
I started looking at all the things that I didn’t have and asked myself who or what can I bring on to make up for it. I realized quickly I needed a money partner and credit partner. Off to the races I went I did hundreds of hours of short term rental research, market research, talked to so many amazing people already crushing it in the space until I felt confident I could figure everything out. I started pitching people in my personal network, and was hit with rejection after rejection, my first time on the phone with a potential partner I had to hang up and act like the call dropped because I was so nervous haha. Nothing went as planned and things took forever, but by me telling every and anybody what I was looking to do the money came almost accidentally through word of mouth. My friend at work mentioned my intentions to one of the higher ups and they committed to investing with me. My partner came 3 weeks later with me just trying to get to know him in my mastermind SheeksFreaks and ranting about my struggles with finding a partner. Now, I had everything I needed and we were off to the races I was actually doing this! I had the knowledge, the resources, and everything I needed to accomplish my goal now to find the deal. Well after analyzing potential deals for 4-6 hours every single day, 4 offers and 2 months later we got something under contract, I was ecstatic because this would mean I would hit my goal literally one day before my 20th birthday. The deal was great with tons of potential for us to increase its profitability, but we got hit with several very expensive bids $30k over what I was willing to come up with so we ended up walking away and going back on the hunt. This stunk because that would mean I would miss my goal, but 6 offers later we were eventually able to land something. The property was a 3 bedroom cabin listed as a 1 bedroom in the Smokies and we got it for $600k offering $11k over asking. It ended up appraising at $610k and I get to control this very lucrative asset with none of my own money or credit. 50% of the deal for me was way better than 100% of nothing or a small deal that cash flows less than $1000/mo.
I share this for all my people who feel like they can’t do real estate in today’s market because they lack experience, money, a huge network of business partners, or feel to YOUNG or old to go after it. It is possible, and your mindset plays a bigger role than anything. Even though I didn’t hit my goal of closing on the property by an arbitrary deadline I set for myself. I learned so much about the process, raising money, entity structure, lending, the short term rental asset class, building relationships, partnerships my own capabilities, and so much more. I knew very little about this before I started to take action, but by taking action all the things I needed to know revealed themselves to me and allowed me to get that much closer to financial freedom. This deal should put me EXTREMELY close to lean financial freedom having enough money to cover all my bills once getting out the military and put me over my current W-2 income. I’m already working on my next couple of transactions for the end of this year and beginning of the next. So I should be in a pretty decent spot before my 21st birthday. Right now it’s time to put the systems together, automate as much as possible, and move on to the next deal. LET’S GO!!!
@Jabbar Adesada ,how did you calculate that you got a great deal on a 600k cabin? How will you get a net return above 10% CoC at that price? Do you know what you paid per sq ft for this cabin?
Airdna and the enemy method. I've analyzed over 300 deals in the Smokies alone. At 10% down we will be at a much higher than 10% CoC return. It did $82k in gross revenue last year with property management, poor listing optimization, and 30 days of lost revenue. Cost per square foot is irrelevant to my investment criteria, but to answer your question we paid $272 a square foot.
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you