Getting Started: Airbnb vs Rental

[Chase Helm]

Howdy everyone!  This is my first post. I have been a member for awhile but just now taking the jump into real estate investing.

I am trying to avoid falling into analysis paralysis and just wanting to get started. I have a HELOC set up and am looking to use that money to do a BRRRR on a 1BR/2BR townhome close to where I live (I know I can probably find better deals further from home but am not comfortable going that far out with my first). When I run the numbers, I am either not able to pull enough back out with the refinance to pay back the HELOC or I have to leave more of my own money in the deal than I would like ($50k) in order to maintain a $100/$200 cash flow. Now, in order to just get the 1st deal off the ground, I am considering using the first property as Airbnb in order to pull more money out and get the returns I am looking to achieve. With it being Airbnb, I was considering buying a unit in a mid-rise condo building or the townhome. Does anyone have any recommendations on whether or not one is better than the other for Airbnb/rentals? (assuming similar neighborhoods).

Basic info on the Deal:

- Location: Dallas, TX

-Budget: $200k

-Purchase Price: $150k-$175k

-Rehab Budget ($10k-$15k)

-Average rents: $1400-$1500/month  ($1500 gets me right around break even)

Just looking for any recommendations and would love to hear about anyone's past experiences with a similar situation or Airbnb in general.

Thanks!

Chase

[Myka Artis]

@Chase Helm I think you need a cheaper purchse price. I would look for stuff that's 70K - 150K. Plenty of that in the new Dallas Empowerment Zones (Opportunity Zones). There are 7 areas currently being pushed for new development. If you are looking to do Airbnb verify the long term numbers work and then run the Airbnb numbers. Airbnb isn't technically regulated in Dallas so you have to be careful in case a shut down happens. I would also avoid condos & townhomes because more than likely their HOA bylaws will not permit Airbnb rentals. I would aim for a 3/2 in the Dallas market that needs work if you want to get the biggest ROI on an Airbnb property. 1/1 units are completely saturated in Dallas. The bigger the better.