Duplex as an AirBNB investment
Investment Info:
Small multi-family (2-4 units) buy & hold investment in Shorewood.
Purchase price: $240,000
Cash invested: $15,000
Duplex in Shorewood. Purchased with a partner who is living in the property and AirBNBing one of the units. Thus qualified for 3.5% owner occupied down payment. Both units are 2 bed 1 bath with upper kitchen having been recently remodeled. Also fairly turkey but a lot of elbow grease required to get ready for AirBNB'ing. Refinished hardwood floors, landscaping, chimney repair, some window repair, painting.
What made you interested in investing in this type of deal?
Great location with likelihood of increased appreciation or at least prices holding steady. Purchased specifically to rent as an AirBNB given high purchase price and property taxes. Wanted to have an AirBNB option so I had a place to stay when coming to town.
How did you find this deal and how did you negotiate it?
Sat on the MLS throughout the winter and dropped multiple times while it sat. Was still able to negotiate multiple repairs needed.
How did you finance this deal?
Traditional financing. Owner occupied 3.5% down.
How did you add value to the deal?
Refinished hardwood floors, landscaping, painting. Basement has some small foundation issues/water leaks that will be repaired in Spring. Will re-do kitchen floors in one unit. Replacing defunct air conditioner in another unit. Will add sink/cabinet to lower unit.
What was the outcome?
Renting fabulously well via Airbnb! Very happy and a beautiful place to stay when I come to town.
Lessons learned? Challenges?
Don't fall in love with a property so that it affects your ability to negotiate properly! Many new learnings with this property. A tad less turnkey than the last and so allowed for learning about a lot of little things. Including damp basements and leaks in foundation (though nothing major!)
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Tom Kerr - Mortgage Lender at Guaranteed Rate: www.rate.com/tomkerr
