First STR or Private Money Lender?

[Mike Gorius]

Hi Everyone,

My parents tried the STR thing out for almost a year and decided it was not for them. They bought a beach home with cash a while ago but have decided to take their money and run, seeing as it has already appreciated more than expected. I was sad to hear this as it could be a real cash cow in the warmer months, but it's their call in the end.

On to my question. I think I know the answer to this, but I would love to hear some more experienced investors' thoughts and reasoning. Which below option would you choose?

Option A: They have agreed to sell me the property for market value. This STR would bring in $20K+ profit annually based on the numbers.

Option B: They bought the property cash and have agreed to be a private money lender for future deals if the guaranteed return is worth their time.

Should I purchase an STR with solid cash flow and appreciation potential in a beach town or use their cash to fund multiple deals a year? Some of you may ask me, "will these multiple deals equate to $20K+ profit annually?" My answer is, no, not based on rents alone if I do buy and hold. It would eventually turn into a yes if appreciation continues and I sell these properties for a solid profit in 3-5 years.

Thanks for your time,

[John Underwood]

Start with the beach house that your parents already own and are willing to owner finance for you. Show them how much money you can make from it. Then go do other deals with their financing.

[Bruce Woodruff]

Yes to John^^^. And it also depends a little bit on what you wat to do. Running an STR is way different than having a few LTRs. Big difference....