Beach House Purchase/Airbnb

12 Replies

Hello BP

Each year my wife and I come to san diego as we are comic con vendors. This year was no different even though the show was canceled as my company already paid for the beach house we normally stay in. The house is 3 bedroom 2 bath with an attached garage apartment in which the owners live. The owners are an older couple and are interested in selling the property with contingency they can stay in the apartment for free. I told them it would be very difficult to find a buyer to agree to this especially at the $1.5M price tag.

I am trying to find some options to offer them to purchase the property through owner financing. She already said they would just want a small down payment around $50k and $6k/per month cash. The property is 1 block from the beach so the rental rates are pretty high($300+ per night airbnb) and probably $5k for a long term lease. I know her $6k goal would not happen in this case. 

My end goal would be to have it kind of as a time share for us and maybe 2 other people and then rent out for the rest of the year. 

Has anyone ever done something like this or have any suggestions on structuring some kind of deal with the owners?

Thank you for your input

hi @Dave Madoch , I have had similar thoughts with beach houses and snow lodges. However what I often find is that the capital would be better deployed elsewhere.

Often times the unsexy vehicles of investing (midwest duplexes) will cashflow and appreciate far better then the sexy ones (LA beach house).

With the cashflow from a midwest duplex, you could afford to stay in an even nicer beach house in San Diego each year. Just a thought.

Originally posted by @Dave Madoch :

Hello BP

Each year my wife and I come to san diego as we are comic con vendors. This year was no different even though the show was canceled as my company already paid for the beach house we normally stay in. The house is 3 bedroom 2 bath with an attached garage apartment in which the owners live. The owners are an older couple and are interested in selling the property with contingency they can stay in the apartment for free. I told them it would be very difficult to find a buyer to agree to this especially at the $1.5M price tag.

I am trying to find some options to offer them to purchase the property through owner financing. She already said they would just want a small down payment around $50k and $6k/per month cash. The property is 1 block from the beach so the rental rates are pretty high($300+ per night airbnb) and probably $5k for a long term lease. I know her $6k goal would not happen in this case. 

My end goal would be to have it kind of as a time share for us and maybe 2 other people and then rent out for the rest of the year. 

Has anyone ever done something like this or have any suggestions on structuring some kind of deal with the owners?

Thank you for your input

Hi Dave!

I love Comic Con and when I moved to San Diego for school I discovered it and its since brought me so much joy and this year was a bummer on that front.

With regards to acquiring the property my knowledge is little to those here on the forum in terms of what makes something a deal.

The input I do have is you may want to consider is that the garage conversion is permitted. We had a client ready to purchase in the PB area with the intent to max out the FAR and after reaching out to our city planner we discover it was not going to be that simple. This is my assumption that you will want to maximize the FAR to get the most out of the property financially, but there are many things to consider in order for the property to cash flow; such as building while occupied or ensuring that the property is not in the coastal omission zone (they make development very challenging, especially out there)

 

Originally posted by @Steven Wilson :

hi @Dave Madoch , I have had similar thoughts with beach houses and snow lodges. However what I often find is that the capital would be better deployed elsewhere.

Often times the unsexy vehicles of investing (midwest duplexes) will cashflow and appreciate far better then the sexy ones (LA beach house).

With the cashflow from a midwest duplex, you could afford to stay in an even nicer beach house in San Diego each year. Just a thought.

Comforting to read! my partners and I are looking at the Cleveland area and are planning to make at least 1 purchase this year!

 

$300 per night is not much for a $1.5M property. I get $12k a week from mid-June to mid-August for a property I paid $1.9M for on the beach in South Carolina. I just don't think this is that good a deal for the $$ invested.
Originally posted by @Steven Wilson :

hi @Dave Madoch , I have had similar thoughts with beach houses and snow lodges. However what I often find is that the capital would be better deployed elsewhere.

Often times the unsexy vehicles of investing (midwest duplexes) will cashflow and appreciate far better then the sexy ones (LA beach house).

With the cashflow from a midwest duplex, you could afford to stay in an even nicer beach house in San Diego each year. Just a thought.

Steven, find me the midwest duplex that appreciates better than an LA beach house, please!

But seriously, folks, Steven's company Reafco owns Columbus investment property. If you're considering Columbus, message Steven!

Say hi to Remington for me!

Best,

Jon 

@Jon Schwartz your right on the appreciation and the beach house!

Though with the way the Columbus market has been going some homes have seen 300% appreciation in the last 2 years!

Also appreciate the mention!

Originally posted by @Jon Schwartz :
Originally posted by @Steven Wilson:

hi @Dave Madoch , I have had similar thoughts with beach houses and snow lodges. However what I often find is that the capital would be better deployed elsewhere.

Often times the unsexy vehicles of investing (midwest duplexes) will cashflow and appreciate far better then the sexy ones (LA beach house).

With the cashflow from a midwest duplex, you could afford to stay in an even nicer beach house in San Diego each year. Just a thought.

Steven, find me the midwest duplex that appreciates better than an LA beach house, please!

But seriously, folks, Steven's company Reafco owns Columbus investment property. If you're considering Columbus, message Steven!

Say hi to Remington for me!

Best,

Jon 

Hi! 

Originally posted by @Remington Lyman :
Originally posted by @Jon Schwartz:
Originally posted by @Steven Wilson:

hi @Dave Madoch , I have had similar thoughts with beach houses and snow lodges. However what I often find is that the capital would be better deployed elsewhere.

Often times the unsexy vehicles of investing (midwest duplexes) will cashflow and appreciate far better then the sexy ones (LA beach house).

With the cashflow from a midwest duplex, you could afford to stay in an even nicer beach house in San Diego each year. Just a thought.

Steven, find me the midwest duplex that appreciates better than an LA beach house, please!

But seriously, folks, Steven's company Reafco owns Columbus investment property. If you're considering Columbus, message Steven!

Say hi to Remington for me!

Best,

Jon 

Hi! 

I cannot get enough of this grin:

 

Originally posted by @Jon Schwartz :
Originally posted by @Remington Lyman:
Originally posted by @Jon Schwartz:
Originally posted by @Steven Wilson:

hi @Dave Madoch , I have had similar thoughts with beach houses and snow lodges. However what I often find is that the capital would be better deployed elsewhere.

Often times the unsexy vehicles of investing (midwest duplexes) will cashflow and appreciate far better then the sexy ones (LA beach house).

With the cashflow from a midwest duplex, you could afford to stay in an even nicer beach house in San Diego each year. Just a thought.

Steven, find me the midwest duplex that appreciates better than an LA beach house, please!

But seriously, folks, Steven's company Reafco owns Columbus investment property. If you're considering Columbus, message Steven!

Say hi to Remington for me!

Best,

Jon 

Hi! 

I cannot get enough of this grin:

 

 Come visit Columbus and see it for yourself!