Investor · WI · Member since 2020 · 22 posts · 23 votes
We just finished a vacation rental property about 6 weeks ago. We originally purchased the property to renovate as an Airbnb, but got a great offer from a buyer so we ended up selling.
We are curious, how long do you keep your vacation rentals before selling? And has anyone had much success flipping vacation properties?
We are tossing the idea of doing another one as a rental or flipping the next. We purchased the lake front property for $228,000 on a commercial, 20% down loan, put $50k into the rehab and walked away with $120,000 in profit. The property was originally 2 bed 1.5 bath, we converted it to 4 bed 1.5 bath, finished the basement to add a pool table and mini bar, and updated kitchens, bedrooms, bathrooms, roofing and siding etc.
Would you guys book a trip away at the property? We are always looking for feedback so we can improve. We have included some pictures below. Let us know if you would like to see before and after pictures.
I have been tempted to sell my properties for major profit. But then put the money in what? Even if the houses never go up another dime in value, the income is incredible.
Most of us, I beleive, are acquiring more not selling.
$120k is net after renovations etc. One of the reasons we decided to sell is because it is over an hour away from where we live and we could not source cleaners etc, so we have been leaning more towards purchasing more multi family. Do you prefer multi family or vacation rentals?
I have been tempted to sell my properties for major profit. But then put the money in what? Even if the houses never go up another dime in value, the income is incredible.
Are all your properties vacation rentals or do you have multi family as well?
@Account Closed that looks beautiful and congratulations on a very successful flip! I don't know what area it's in so have no idea of what kind of revenue it might generate, but you clearly added a lot of value.
Like @Collin Hays if I cashed out now I'd make a killing BUT - just as he said, I do not have a comparable investment to put the money into. The best course of action for me is to keep my killer ROI and cash flow in place while my loans get paid down and my equity continues to increase.
I have been tempted to sell my properties for major profit. But then put the money in what? Even if the houses never go up another dime in value, the income is incredible.
Are all your properties vacation rentals or do you have multi family as well?
All of mine are vacation rentals. Selling them presents a whole host of problems. Take property number 1: I have $330K in it, it produces about $65K a year in rents, and I could probably sell it for $500K rather quickly. But what then? I have capital gains tax on probably a $250K gain after depreciation. So after that I'm walking away with maybe $400K. Where do I put $400K that produces $65K a year?
@Account Closed that looks beautiful and congratulations on a very successful flip! I don't know what area it's in so have no idea of what kind of revenue it might generate, but you clearly added a lot of value.
Like @Collin Hays if I cashed out now I'd make a killing BUT - just as he said, I do not have a comparable investment to put the money into. The best course of action for me is to keep my killer ROI and cash flow in place while my loans get paid down and my equity continues to increase.
Thank you!
The property is in WI. Are your properties vacation rentals or multi family?
The property is in WI. Are your properties vacation rentals or multi family?
Mine are all vacation rentals in the Tennessee Smokies; I have five, going on seven. However, we're a year-round market here and I imagine a lake house in Wisconsin is a lot more seasonal!
Most of us, I beleive, are acquiring more not selling.
$120k is net after renovations etc. One of the reasons we decided to sell is because it is over an hour away from where we live and we could not source cleaners etc, so we have been leaning more towards purchasing more multi family. Do you prefer multi family or vacation rentals?
My vacation rental is about an hour away. I have had several different cleaners since we have owned and have never had much trouble finding one. We did have to fire one once that wasn't meeting expectations.
I own mainly long term rentals but am looking to buy another one that will be over 4 hours away. I know I can self manage even from this distance.
I have been doing some flipping. I netted 197k on the last one and am working on another one now. My contractor does all the work, I just write checks.
Most of us, I beleive, are acquiring more not selling.
$120k is net after renovations etc. One of the reasons we decided to sell is because it is over an hour away from where we live and we could not source cleaners etc, so we have been leaning more towards purchasing more multi family. Do you prefer multi family or vacation rentals?
My vacation rental is about an hour away. I have had several different cleaners since we have owned and have never had much trouble finding one. We did have to fire one once that wasn't meeting expectations.
I own mainly long term rentals but am looking to buy another one that will be over 4 hours away. I know I can self manage even from this distance.
I have been doing some flipping. I netted 197k on the last one and am working on another one now. My contractor does all the work, I just write checks.
@Account Closed you did Good but was it GREAT! The question to ask yourself did you take a positive step toward your GOAL???????? You started your post that the reason was to set up as an Airbnb, but did not state WHY?????? Once you figure out your GOAL and your WHY then you can make positive movement and decisions to accomplish them. Just because someone offered you what you considered a good price, does the action go in line with your goal/why! If your goal/why changed, no problem but have a plan and take steps moving toward that plan and you will be successful!
Let me explain by telling you an actual event. 7 years ago I came across a duplex that I bought in Austin, Texas. I bought it for 70k!!!! I could have sold it one day later with absolutely no work for 120k. 50k profit in 24 hours! You made a 120k profit in how many months?? Yet for me, to sell in one day for 50k profit would have been a HUGE MISTAKE! Why? Because it did not support my GOAL or my WHY!
My Goal: To build up PREDICTABLE, SUSTAINABLE, PASSIVE INCOME! WHY: TO become FINANCIALLY INDEPENDENT that will allow me to RETIRE AT A SUSTAINABLE HIGH STANDARD OF LIVING UNTIL MY WIFE AND I DIE AND TO PASS ON A SUBSTANTIAL WEALTH TRANSFER TO MY CHILDREN.
Don't get me wrong, if I could find that deal EVERY DAY then yes I would flip till I thought I had enough but there are two things wrong with that train of thought. How much is enough and what guarantees do I have of finding that deal everyday? This duplex decision worked well with my previous decision because this one duplex was not going to make my goal or why. But adding it to my portfolio of now 19 units it does! For me it is all about Predictable, Sustainable, Cash Flow. I care not what the asset is worth, I ONLY CARE what cash flow it produces! Seven years later that duplex is producing $2400 a month and it is worth $350k. I have only added 10k to my 70k purchase price.
A couple more notes. People make emotional decisions and then back them up with rationale. You started out wanting an Airbnb to run but when you got an unexpected offer you made an emotional decision to sell. You based that decision on the rationale that since you lived an hour away it would be difficult to arrange house cleaning. Yet when you made your decision to develop that Airbnb you already knew there would be the task of cleaning.
I don't want to hammer your decision and it may have been the best course of action. If not, this decision to sell is not a life wrecking decision either. Flipping properties is a job and your starting back at zero on every flip. Most of us here are working towards a goal that frees us up from a job. Managing 19 rentals is a job as well. But it is one I love doing, but I am at a point now that I can hire a property manager to do that, but I won't until I no longer enjoy doing the property management. When cash flow is the goal, and you have achieved the desire cash flow your done! You don't have to adjust for inflation as rents do that for you.
I am not trying to persuade you on what you should do. There are plenty of flippers on this site as well. Most flippers that I know do it to build enough capital to start their buy and hold journey. If you have enough to get started maybe it is time to concentrate on long term buy and hold. If not, set your goal and your why and go after them with gusto! Cheers.
BTW you did a nice job on that Airbnb!
One last story. Bought a 4plex from another investor who was the finder of the deal. We did a double close, so the finder held the deal less than 2 hours. He made 20k and I got a run down 4 plex for 144k. I put 50k in it and it is worth 320k producing $3250 gross rents a month. He did well, but I think I did a little better!
Go now, develop your goal and your why, then develop your plan and lastly EXECUTE your plan. Good luck. Cheers.
The main reason we decided to sell is because we want to Pursue more multi family now. Our duplex does really well and it gives us more capital to put towards our long term plan, just to clear things up!
@Account Closed Looks amazing. 120k is nothing to scoff at. However, to reiterate what others said, I think you should decide on what your long term plans are and figure out what strategy works best to help you attain those goals. Either way though, the property looks amazing. Nicely done.
