Palisade CO, AirBnB, BRRR, First time home buy!

3 Replies

Investment Info:

Single-family residence buy & hold investment in Palisade.

Purchase price: $137,000
Cash invested: $10,000

So with this one we are currently using as our primary residence while doing all the repairs needed before we flip it into an AirBnB. We got on the waiting list as soon as we bought back in 17' and fortunately for us that list sort of "went quick", about a month ago we got our spot. We just did our first refi and we appraised 100K over purchase price! Now we are taking out what we can, finishing small repairs needed and going to patiently wait for our next deal to swim on by. Thats it in a nutshell.

What made you interested in investing in this type of deal?

We had done this in an around about way with our very first home and it worked well, it cashflows enough to pay both of our current mortgages. AirBnB seemed like a neat way to "stay in the know" when it comes to any problems with your home, and it has worked great so far.

How did you find this deal and how did you negotiate it?

God literally dropped this one in our lap. My wife was taking a job in Grand Junction and we looked on zillow, found this house in a surrounding neighborhood and called the realtor. It had been back on the market less than a day when we found it and we got the 8am showing the next day, we left our house at 4am! As soon as we realized it had good bones and you could not beat the location we made an offer 3 or so hrs. later for 135K, about 13K under asking. They countered and we took it.

How did you finance this deal?

As first time home buyers with 3.5% down and fixed for thirty years.

How did you add value to the deal?

Cleaned it! I mean we even had to mop the ceilings, it had been rented for the past ten years and it was DIRTY. We had cockroaches, we had weird smells, we had it all. But you know, after it was all cleaned and painted on the inside it wasn't so bad. Then we took things that were unnecessary out, fixed windows, ventilated basement with vents and fans(got rid of bugs), and did what I like to call brewed a batch of bootch, you can PM me for details (Chinese remedy for bugs).

What was the outcome?

100K over purchase price appraisal. Money for some still needed repairs and maintenance and a remaining balance to hunt for our next deal.

Lessons learned? Challenges?

My challengers were leaving my trusting wife here alone while I still worked out of town and coming home on weekends to work very hard and trust that my higher power would get me through what honestly was very tough. My lessons learned were that with a little faith and hard work anything is possible.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Karla Cole with Caldwell Banker, Adam Bunniger with Academy Mortgage and a good community of neighbors and real people here in Grand Junction CO.

What a great presence that house has!  Your numbers went in a terrific direction, too. Given that you put so little down, the payments by necessity are often quite high. Supplementing with some short term income is a good way to make those payments.    

I recently started my first short term rental, using tips from the experienced folks in the STR forums here on BP. Where are most of your guests coming from, and what are they in Palisade to do? Do you have an in-law suite, or what space are you using for that aspect of your business?

I look forward to reading about your success as you continue to learn and grow.

Hi Kerry, 

Thanks for the positive feedback, it really is nice to start building a network of like minded investors. 

I have yet to open this home in Palisade to AirBnB just yet, my wife and I are holding back until the time is just right hopefully in the spring, but we have jumped through all the necessary hurdles A.k.a the hard part, in my opinion. But our first vaca rental in Dolores CO is cash flowing this Palisade rental so that helps relieve the mortgage pressure completely.  

Both Dolores and Palisade are cute little high desert mountain towns which have a lot of summer spring and fall activity to offer, laid back is a big part of that.  Its good stuff this vacation rental business, its just a nice way to be involved so personally with your home, if its one you do take pride in.  

I will hopefully have more to post about in the future, in the meantime it looks like I have a lot to learn from people like yourself.  Have a great day. 

Thanks again. 

Chris

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@Christopher Curry congratulations on your deal.  It probably helps being a contractor to get repairs done, but it is still hard work.  The increase in value is huge.  I do not understand about the waiting list.  What is that about?  I am curious about your VR in Dolores County.  What kind of daily rates do you get, and what kind of guests?  I think of Dolores County as Dove Creek, perhaps because my brother lives there.  He is a mechanic.

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