Rental Arbitrage for Short-Term and Mid-Term Rental
Good morning all!
First off, I am 24 in the DFW, TX area. My interests in real estate are house hacking, creative financing (Subject To, Seller Financing), short-term rental, and rental arbitrage. I have a baseball coaching business and love all sports. The reason I say that is we of course are all trying to network so if you share any of those interests or my age and trying to get into the real estate game or already have that head start, let's please connect! Now to the point of my post:
I was looking for my first house hack using traditional 5% owner-occupied loan. Started searching in August and had a 3 bed, 2.5 bath condo under contract in December. Unfortunately, deal fell through due to financing relating to the HOA (learned a lot about working with lenders from this upsetting experience). I offered several more times, but prices and demand continued to rise particularly at my pricepoint ($220K). I have been holding onto my W2 job to try to get a traditional financing deal closed, but my time has elapsed. I am going to quit my W2 to pursue my baseball business, but really want to continue pursing my real estate goal. This will force me to consider other strategies without the ability to get a bank loan.
The ones that interest me are rental arbitrage. I feel like it is a strategy that is rather new and has less competitive. Least risk and no prerequisites/requirements needed. Greatest reason for interest is I have one friend in my area who is also interested in this and I have another connection that is looking to partner on higher pricepoint vacation rental deals. Feel like there is still the bubble where legislation on vacation rentals hasn't been enforced in many areas so might be a good window of opportunity to learn the short-term game.
I hope from this experience, this will lead me into my next interest which is creative financing (seller financing/subject to), where I can actually acquire and own properties, but this time without the need of traditional financing and a W2 income. After acquiring a house-hack for myself through this strategy, I hope I am able to continue to scale in acquisitions this way and use my knowledge of short-term rental through rental arbitrage to gain lucrative income from these additional properties.
Basically, I am hoping for as much feedback as possible on my vision/strategy from those who have experience. I have much to learn, but my main concern is with the economy looking bearish, I imagine vacationing will go down. With vacationing going down, I imagine the short-term rental business will pull back. I have other concerns about my market (DFW, Texas) as a location for this. Although, I do have someone in my network who has great success with rental arbitrage in the area. Seriously, any feedback is appreciated. Thank you so much, and please feel free to connect!
Best,
Chris Murphy
@icoachbaseball