I want to sell my property to an AirBNB investor - Need some advi

25 Replies

I have a two bedroom 5 miles away from Dulles International Airport (IAD)  and 5 miles from Metro stations (DC Silver line)

The property is 2 BR and has two Master Suites and a Full kitchen and Dining room.

The Basement could easily hold another bedroom but there the laundry room would have to be refitted as a full bath.

Purchase Price is $350K

$1800 a year in insurance

Tax rate is 1.15%

Assume 4.5% mortgage

HOA - $80

PITI @ $2300

Average Bedroom rate is $55 per night

Assume 20 nights per month 

3 bedrooms

$3300 steady state Revenue

Here is the list of things i would be willing to pay for:

Upgrade to Kitchen - Countertop and Appliances

Upgrade to basement - Put in Full Bath and Stacked washer/dryer

 50 inch LED TV for living room and Basic Verizon FIOS for wifi and cable Utility support for six months

$100 of Uber Gift cards for 12 months for your guests

Good Coffee and Great Meat & Cheese monthly baskets for 12 months

Make sure your revenue matches $300 + PITI for the first six months

What am i forgetting....

i need to sell in August / September so i have some time to deliberate.

I personally would not buy that property as an AirBnB. Not enough cash flow for the amount of work. 

What kind of cash flow do you need? Thanks for the comment

It may just be me, but an AirBnB investor does not want to be sought out. And they are not going to pay appreciably more for a property than any other homebuyer. 

The market is the market.

The price is at a 6% discount because I am not using a realtor. How do I check all the boxes for a AirBNB investor?

I agree with @Andy O'Neal .

Your subject of this post is "I want to sell my property.....".  The rest of that quote is irrelevant.  It could be an Airbnb investor, a retired couple, a newly married couple, a widower, a LGBT couple, a property management company, a wealthy Arabian with oil money, a wealthy central American with drug money, etc.

You're selling your property, period.  The future purpose of your property is none of your business, and shouldn't be factored in.  Sell it for market rates, or you won't sell it at all.  

Sometimes I have to put $400 cash from 2 people in my wife's hand while she wishes the 3 bedroom STR was bringing in $600 from 3 people. I ask her to put her wishes in the other hand and then to tell me which hand is filling up faster.

Papa bull and son bull were on a small hill in a meadow.  They saw a herd of cows in the valley.  Son bull said "Let's run down there and screw a cow."  Papa bull said "Son, let's walk down there and screw them all."  You're like son bull.

Originally posted by @Paul Sandhu :

Sometimes I have to put $400 cash from 2 people in my wife's hand while she wishes the 3 bedroom STR was bringing in $600 from 3 people. I ask her to put her wishes in the other hand and then to tell me which hand is filling up faster.

Papa bull and son bull were on a small hill in a meadow.  They saw a herd of cows in the valley.  Son bull said "Let's run down there and screw a cow."  Papa bull said "Son, let's walk down there and screw them all."  You're like son bull.

 This is good stuff here!!!

I thought real estate professionals were the greatest marketers in the world and creative and would help me sell property to a specific target market. I also will be looking to understand how Airbnb professionals think at some point maybe I would make a decision to buy an Airbnb property. I don’t think I’m the type of ******* you described in your bowl analogy. Could you please go find someone else’s post who enjoys your ******** thank you

@Dave Ramirez - I think the broader point stands, though.... houses, *especially* for any sort of investor, are a commodity. An expensive and less liquid one, yes. But people & companies looking to list homes on sites like AirBnB are shopping in the same pool as everyone else... and their needs aren’t much different. 

If you are advertising your home to as broad a market as possible, savvy STR investors interested in your neighborhood will find it.

The upgrades you discuss making would be interesting to many kinds of buyers. Vacation and business rentals do better, I guess, when they have nice kitchens (to a point) and definitely more bedrooms. But that’s also true of homes sold to anyone else as well.

The frills like gift cards and a TV and gift baskets and prepaid cable are unlikely to move any sort of needle. Frankly, they are distracting to me... not exciting. 

I doubt trying to target your selling efforts to short term rental investors will yield a substantial profit over what you would get just listing your home on the MLS.

Best of luck.

@Dave Ramirez I'm not sure I understand your post. Are you trying to sell a property but only want to market it to Airbnb Investors? If so, why would limit your potential buyer pool to a small segment of the population? You are doing yourself a disservice it that's the case. There are many other potential buyers you are eliminating.
Originally posted by @Dave Ramirez :

I thought real estate professionals were the greatest marketers in the world and creative and would help me sell property to a specific target market. I also will be looking to understand how Airbnb professionals think at some point maybe I would make a decision to buy an Airbnb property. I don’t think I’m the type of ******* you described in your bowl analogy. Could you please go find someone else’s post who enjoys your ******** thank you

You just shot yourself in the foot, by having your own pre-determined "target market"!

Real Estate professionals will not need to sell your property at any discount!*

* [I was originally going to respond under your earlier post: "The price is at a 6% discount because I am not using a realtor. How do I check all the boxes for a AirBNB investor?"]

Anyone who does all the work of an Agent themselves, for no extra money to be netted in their pocket... (Do I really have to spell out the rest of that sentence [similar to: "A Lawyer who..."]?)

@Dave Ramirez - I agree with other comments that you  should expand your thinking and not limit your target market  since most buyers are not Airbnb investors. But I also think  you are asking an important broader question: How do I make some improvements before selling my property so I MAXIMIZE my net gain? Updated kitchens and bathrooms almost always yield profit (do a nice midrange job). Sounds like adding an easy third bedroom downstairs will also add value.  I encourage you to look carefully at whether a third bathroom will also add real value considering your costs. It might make more sense to let the buyer make this decision. Good luck!

Thanks for all of the feedback. I think I’ll get it ready for sale and see if an AirBNB Investor has any interest

@Dave Ramirez Don't rule out using a realtor either.  

We do an awful lot for sellers and study after study shows that seller's get substantially higher prices when selling through an agent vs selling on their own - and the increased price is more than enough to cover commissions.

In fact, the founder of ForSaleByOwner.com tried unsuccessfully to sell his condo on his own.  He enlisted a realtor and sold it at a higher price.

http://business.time.com/2011/08/17/fsbo-com-founder-sells-condo-using-real-estate-agent/

Bottom line is more money in your pocket.

If it is such a good purchase for someone wanting to do AirBnB, why not do that yourself?  AirBnB it and make all that money?

@Dave Ramirez

Dave marketing to AirBNB is extremely simple. They are searching the adds all the time looking for the right properties. AirBNB investors know exactly where to invest, they do not need to be told.  Run your add with the full details describing your property and location. 

At the bottom of your add in bold type have....... AirBNB investors only, all others need not apply.

@Dave Ramirez I'm not in an urban market and don't know DC particularly well, so I'm not going to comment on how attractive your particular house's location/setup might be to STR. I do agree the cash flow situation you've laid out is not attractive for STR - I personally want to be clearing at least $1k/mo after all expenses (on houses I paid ~$150-175k for; I expect more from a higher-priced house).

However, one thing you can do to *broaden* the appeal of your sale so it'll be more attractive to STR buyers is give the option to sell it furnished. (especially if there's decent, matching furniture - if it's a hodgepodge of Craigslist finds, don't bother) Anything else I can suggest would apply to appealing to the broader market, too.

I think you have a good idea in deliberately trying to include STR investors in your market pool - but don't do it at the exclusion of other buyers. Frankly, there's not enough of us to be worth marketing specifically to, especially because you have a deadline.

I would agree with the others. Not enough cash flow for the added work and risk of a STR. What are the risks you may ask? Occupancy is a big one. You don't have a steady renter in there so you have to get enough on your nightly rate as a STR to cover the days no one is there. You have to have enough to cover seasonality. For example, we have a property near Lambeau Field. We get $995 a night during Packer season but there are months it may sit empty during the freezing cold Wisconsin offseason. We try to fill them with month to month rentals and also get people stay for weeks at a time or weekends but there is still vacancy risk. The next risk is high monthly costs. We pay for electric, water, cable and internet, gas, snow removal, lawn care, etc. Need good returns to cover those costs. Third risk is that municipalities and HOA's can change regulations about short term rentals. Fourth risk is damage to the furnishings you provided in the home. There are other risks but those are the 4 I can think of off the top of my head. So long story short, as a STR investor, I would research the properties on my own to find them or I would be looking for one with a strong track record.

Dave, I look for a minimum $2000 per month cash flow per property. Do some fall under that figure? Yes, but that’s my target number and it takes a ton of deal making and negotiating to make that happen.

I think it’s a great idea to market it to an AirBnB investor but if your are spitballing a 4.5% rate on a non owner occupied that’s just not going to happen. Especially, with no pro forma statements on current revenues and expenses.

I focus on terms and cash flow on any deal. I could care less if you want to sell it to me for $480,000 or $350,000. If you will finance it at $1,000 a month for 360 months and a balloon at 10 years we can do a deal this evening (yes, I have done a deal exactly like this on a beautiful property). So, a ton of moving parts, but I love your creative ideas.

Best Regards,
Eric

I really hope I’m reading things the wrong way and the OP did not bash @Paul Sandhu in the vacation rental forum because that is, to put it lightly, not a good idea.

“Hey my house is close to an airport and I can’t sell it to a family because the planes make a ton of noise let me sell it for double the price to someone who has the AirBnB app” is what I’m hearing. DC? Airport? You’ll get shut down by hotels if you’re not already.

Clarification: 4.5% with little down with a large institution is not going to happen. Larger down and a private lender or local bank...... who knows?

I am purchasing an investment property right now. 5.00 Rate with 25% down

@Eric A. How much is the balloon at 10 years? 

Now that I know STR Investors are looking for $1000+ a month, my property is not what they are looking for

If anyone wants to market to AirBnB investors, the best thing is to turn your property into an Airbnb and generate some numbers.  Proven revenue is attractive and would make me pay a little more for a property.  But not much more, as I can just buy a similar place and turn it into that revenue stream.

@Dave Ramirez The market hasn’t hit a point yet where people are buying properties based on Airbnb comps yet. Most Airbnb investors are arbitraging to keep their risk low. A lady here in our area is trying to do that and her place has been sitting on the market for over a year. You have to cater to the market that you’re in. Targeting Airbnb investors I’m sure might come in the near future possibly but right now you have to go with the market.

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