Mountain House Transformation: $29k In Bookings The First Week!

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Mountain House Transformation: $29k In Bookings The First Week!

Michael Elefante
Investor · Greenville, SC · Member since 2019 · 77 posts · 304 votes

I have three short term rentals that I rent out on Airbnb. This mountain house was a different project for me. The house had great bones and structural integrity, but just needed a little love. We finished October 14 and listed on Airbnb and VRBO. Within the first week, we have had over $29k in bookings between Oct 16-Dec 31 2020! This has surpassed my original forecasts. We are now forecasting to bring in around $125k in revenue and net around $75k during the first 12 months! That's around $6,500/ month cash flow on average. Crazy returns... Has anyone else had success flipping and renting houses out in hot STR markets? I also create some content on YouTube, focused around my experience on short term rentals, Airbnb, etc if anybody has interest in seeing how I evaluate properties, furnish them, etc. :) Let me know what you all think and if you have any suggestions, questions or comments.

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Nathan GesnerBusiness Member
Moderator
Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
5y

Yes, I would like to see some numbers. What did you pay for the property? Cost to renovate and furnish? Are you self managing? What are your expenses? 

Inquiring minds want to know!

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11Reply
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  • John UnderwoodPro Member
    Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
    5y

    Congrats thats awesome.

    1Reply
  • Bob Herczeg
    Investor · Winona, MN · Member since 2015 · 2 posts · 1 vote
    5y

    Michael, where's the link? 

    3Reply
  • Brent Huling
    Member since 2020 · 38 posts · 35 votes
    5y

    Congrats! I don't see a link. Just purchased my first STR in Palm Springs area and headed down for a few weeks to set it all up and furnish. Hoping for the same type of returns.

    3Reply
  • Luke CarlPro Member
    Rental Property Investor · Tennessee Florida · Member since 2016 · 4k+ posts · 5k+ votes
    5y

    @Michael Elefante you’re netting 75k on 125k gross in short term rental? Are you cleaning it yourself and paid cash for the property? Do tell

    Podcast Guest on Show From Surviving on $30/Day to 30+ Properties Thanks to Blue-Collar Skills
    6Reply
  • Michael Elefante
    OP
    Investor · Greenville, SC · Member since 2019 · 77 posts · 304 votes
    5y

    Sorry! I added the link to the bottom of my original post !

    2Reply
  • Caitlin Elgin
    Member since 2020 · 1 post · 1 vote
    5y

    @Michael Elefante wow those are insane returns!! Congratulations!! Is there anything in particular that you’re doing that you think is the main reason for your success?

    1Reply
  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    5y

    Yes, I would like to see some numbers. What did you pay for the property? Cost to renovate and furnish? Are you self managing? What are your expenses? 

    Inquiring minds want to know!

    The DIY Landlord Book4.7247 Reviews
    WebsiteView Page
    11Reply
  • Michael Elefante
    OP
    Investor · Greenville, SC · Member since 2019 · 77 posts · 304 votes
    5y

    @Caitlin Elgin I think creating something that I felt was unique and different to the area has helped us stand out. This isn't the traditional mountain cabin you see in Gatlinburg / Pigeon Forge area. Our goal was to create a modern/rustic house that differed from the typical all wood cabin. Additionally, as I mention below, we are able to sleep 16 guests comfortably, bumping it up from the previous owners that had it sleeping only 12 guests. 

    @Luke Carl I actually purchased this home through Gennifer Mix who works with you and @Avery Carl. Your team has been a terrific help to us throughout this past year, evaluating properties and also helpful tips to run STRs smoothly. We do not clean ourselves - we have a cleaning service come and turn the property for us between guests.

    @Nathan Gesner

    The numbers...

    We financed the house. 
    Asking price was $550k
    4 BR, 3.2 baths, ~3,000 sq/ft

    We spent $49k all in for fixing it up, furnishing, deep clean, all that good stuff. The vast majority of this was cosmetic. New floors upstairs, new stairs, new paint, new furniture, light fixtures, toilets, ceiling fans, etc etc.. 

    By adding more beds (two queen over queen bunk beds) we bumped the sleeping capacity from what was originally 12 guests, to 16 guests. We can charge quite a bit more by fitting 4 additional people in the house. 

    I have a much more detailed spreadsheet of how I evaluate investments like this, but my numbers are based on the following general numbers for this house: 

    Nightly Rate avg: $550
    Estimated Occupancy: 228 nights per year or ~62% occupancy rate
    Equates to gross revenue annual: $125,400
    Projected Monthly Revenue: $10,450

    Keep in mind this is an average and the mountains are seasonal. Summer months and holidays can be above this number with more week long family vacations, while Jan-Feb (slower months) tend to be slower..

    Expenses:
    Mortgage (Prin, Int, Tax and PMI): $2,596
    Est. Operational expenses (utilities, pest, lawn care, wifi, future maintenance, repairs, HOA, automation tools etc): $1,145
    Total expenses Monthly: $3,741

    Monthly Cash flow: Revenue - Expenses: $10,450 - 3,741 = $6,709
    Annual Cash Flow: $6,709 x 12 months = $80,508
    I mentioned in my post $75k so I could account for Airbnb service fees (around 3% for hosts) and other unforeseen costs to be conservative.. 

    I self manage. We have a good cleaning service and a handyman on call for us. I use YourPorter for management and automation purposes and pricelabs for dynamic pricing. 

    Happy to provide more details regarding the CoC return and Total ROI metrics upon request

    Also, I honestly don't know what the ARV is... I do know how much other 4 BR, ~3,000 sq/ft houses are going for in the area and it quite significantly more than what we got this place for.. The vast majority of STRs bought and sold in this area are turn key properties. I think this gave us an advantage to get in for a better price, have some money to fix it up, make it unique and rent it out at premium dollar. This house was sitting on the market for a while before we picked it up!

    Any comments or suggestions are welcome! I still have a TON to learn, so I am all ears. Thank you all for your input!

    22Reply
  • Charlene Garrison
    Investor · Detroit, MI · Member since 2015 · 32 posts · 12 votes
    5y

    Congratulations!  This is what comes of having your finger on the pulse of a market.  

    3Reply
  • Nancy Bachety
    Rental Property Investor · North Fork, NY · Member since 2016 · 1k+ posts · 631 votes
    5y

    The video is awesome, we'll done. Question about your insurance. Did you purchase a STR policy, like Foremost? Your monthly mortgage payment must have a really low interest rate. Congratulations on turning it into a cash machine!

    4Reply
  • Michael Elefante
    OP
    Investor · Greenville, SC · Member since 2019 · 77 posts · 304 votes
    5y

    @Nancy Bachety Thank you for the kind words! 
    Yes, we are using Foremost. We usually use Proper Insurance for STR specific insurance, but they wouldn't insure us in this location due to the fires that caused so much terrible damage a few years ago. We did secure a low interest rate. We also negotiated to have the sellers pay $10k in closing costs and our title fee :)

    2Reply
  • Michael Elefante
    OP
    Investor · Greenville, SC · Member since 2019 · 77 posts · 304 votes
    5y

    Link to Airbnb Listing

    0Reply
  • Jake CohenPro Member
    Rental Property Investor · Denver, CO · Member since 2017 · 201 posts · 126 votes
    5y

    @Michael Elefante this is a very nice renovation and looks like will cash flow very well. I have 6 units in Steamboat and Denver Co. I have also done renovations to get them up and running. A great way to build your STR business. Are you figuring your cleaning fees are paid by the guest so that is why you aren't including that in your expenses?

    Congrats and good luck on the future projects.

    2Reply
  • Jessica Walker
    Rental Property Investor · Lancaster, PA · Member since 2020 · 6 posts · 3 votes
    5y

    @Michael Elefante

    Beautiful transformation and congrats on your booking success. I certainly would stay there!

    0Reply
  • Michael Elefante
    OP
    Investor · Greenville, SC · Member since 2019 · 77 posts · 304 votes
    5y

    @Jessica Walker Thank you!! :) 
    @Jake Cohen Thanks, Jake! Yes, our guests pay the cleaning fee, separate from the nightly rate. 

    1Reply
  • Masud Khan
    Rental Property Investor · Washington, DC · Member since 2019 · 28 posts · 21 votes
    5y

    @Michael Elefante great post! Interested in the financing. Did you put down 20% and keep that much in the property? Looking for a first time positive cash flow property and thinking about STR over a condo on my area, which is hyper inflated.

    1Reply
  • Jack B.
    Rental Property Investor · Seattle, WA · Member since 2014 · 1k+ posts · 1k+ votes
    5y
    Originally posted by @Michael Elefante:

    @Caitlin Elgin I think creating something that I felt was unique and different to the area has helped us stand out. This isn't the traditional mountain cabin you see in Gatlinburg / Pigeon Forge area. Our goal was to create a modern/rustic house that differed from the typical all wood cabin. Additionally, as I mention below, we are able to sleep 16 guests comfortably, bumping it up from the previous owners that had it sleeping only 12 guests. 

    @Luke Carl I actually purchased this home through Gennifer Mix who works with you and @Avery Carl. Your team has been a terrific help to us throughout this past year, evaluating properties and also helpful tips to run STRs smoothly. We do not clean ourselves - we have a cleaning service come and turn the property for us between guests.

    @Nathan Gesner

    The numbers...

    We financed the house. 
    Asking price was $550k
    4 BR, 3.2 baths, ~3,000 sq/ft

    We spent $49k all in for fixing it up, furnishing, deep clean, all that good stuff. The vast majority of this was cosmetic. New floors upstairs, new stairs, new paint, new furniture, light fixtures, toilets, ceiling fans, etc etc.. 

    By adding more beds (two queen over queen bunk beds) we bumped the sleeping capacity from what was originally 12 guests, to 16 guests. We can charge quite a bit more by fitting 4 additional people in the house. 

    I have a much more detailed spreadsheet of how I evaluate investments like this, but my numbers are based on the following general numbers for this house: 

    Nightly Rate avg: $550
    Estimated Occupancy: 228 nights per year or ~62% occupancy rate
    Equates to gross revenue annual: $125,400
    Projected Monthly Revenue: $10,450

    Keep in mind this is an average and the mountains are seasonal. Summer months and holidays can be above this number with more week long family vacations, while Jan-Feb (slower months) tend to be slower..

    Expenses:
    Mortgage (Prin, Int, Tax and PMI): $2,596
    Est. Operational expenses (utilities, pest, lawn care, wifi, future maintenance, repairs, HOA, automation tools etc): $1,145
    Total expenses Monthly: $3,741

    Monthly Cash flow: Revenue - Expenses: $10,450 - 3,741 = $6,709
    Annual Cash Flow: $6,709 x 12 months = $80,508
    I mentioned in my post $75k so I could account for Airbnb service fees (around 3% for hosts) and other unforeseen costs to be conservative.. 

    I self manage. We have a good cleaning service and a handyman on call for us. I use YourPorter for management and automation purposes and pricelabs for dynamic pricing. 

    Happy to provide more details regarding the CoC return and Total ROI metrics upon request

    Also, I honestly don't know what the ARV is... I do know how much other 4 BR, ~3,000 sq/ft houses are going for in the area and it quite significantly more than what we got this place for.. The vast majority of STRs bought and sold in this area are turn key properties. I think this gave us an advantage to get in for a better price, have some money to fix it up, make it unique and rent it out at premium dollar. This house was sitting on the market for a while before we picked it up!

    Any comments or suggestions are welcome! I still have a TON to learn, so I am all ears. Thank you all for your input!

     Simply amazing, and here I read that ABNB and VRBO were all but dead due to the pandemic!

    3Reply
  • Luke CarlPro Member
    Rental Property Investor · Tennessee Florida · Member since 2016 · 4k+ posts · 5k+ votes
    5y

    @Michael Elefante

    I’ve got 7 houses just like it :)

    Podcast Guest on Show From Surviving on $30/Day to 30+ Properties Thanks to Blue-Collar Skills
    1Reply
  • Luke CarlPro Member
    Rental Property Investor · Tennessee Florida · Member since 2016 · 4k+ posts · 5k+ votes
    5y

    @Michael Elefante I think you’re getting a bit lucky because of October and the holidays. Average nightly rate on this property will be closer to $299 over 365 days with around 300 of those days getting booked -putting it right around 100k gross. So glad you’re having success!!!!

    Podcast Guest on Show From Surviving on $30/Day to 30+ Properties Thanks to Blue-Collar Skills
    4Reply
  • Avery CarlBusiness Member
    Real Estate Agent · USA · Member since 2016 · 909 posts · 1k+ votes
    5y

    @Jack B. Metro area STR's are suffering. Regional vacation market STR's are thriving.

    Podcast Guest on Show How to Get More Airbnb Bookings This Spring and Summer Break
    3Reply
  • Avery CarlBusiness Member
    Real Estate Agent · USA · Member since 2016 · 909 posts · 1k+ votes
    5y

    @Michael Elefante so glad you're doing so well!!

    Podcast Guest on Show How to Get More Airbnb Bookings This Spring and Summer Break
    1Reply
  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    5y

    Excellent! Thanks for sharing the numbers.  I've heard the small rentals do well out there and have wondered how the larger ones perform.

    The DIY Landlord Book4.7247 Reviews
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    0Reply
  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    5y
    Originally posted by @Jack B.:

    I think it's exactly the opposite. Short-term rentals are doing better in many areas because people are trying to avoid crowded hotels. I just opened my first vacation rental on July 1st and it's been booked solid.

    The DIY Landlord Book4.7247 Reviews
    WebsiteView Page
    3Reply
  • Peter F Tattersall
    Member since 2020 · 1 post · 0 votes
    5y

    Michael, I am really interested in adding some vacation rentals, what percentage does Air BnB usually take from the bookings?

    0Reply
  • Serena Kim
    Real Estate Agent · Orlando, FL · Member since 2019 · 59 posts · 90 votes
    5y

    That's awesome! Congrats!!

    0Reply
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