STR Buy and Hold in Fort Walton Beach, Fl

4 Replies

Investment Info:

Condo buy & hold investment.

Purchase price: $142,000
Cash invested: $62,000

Our first "Buy and Hold", Bream Av was a clean, but severely outdated STR. A 3min walk to the beach, it was a great price and the HOA was vacation rental friendly! We brought in new cabinets and appliances (ya dig the cool, red, retro fridge?), salvaged barnwood flooring and custom made the countertop, backsplash and floating shelves. We did some soundproofing and custom made the tables, epoxying Peccy Cyprus that had been laying on the bottom of a Lousianna river for 100yrs.

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

We were finding it tough to find any good flix and flip deals. I had intended to acquire our first buy and hold later in the year but when we stumbled on this deal, we thought it was too good to pass up, so we pivoted.

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

We went to Destin to look at a property that had incredible AirBnb rental history. We were going to put in an offer but on the drive back to FWB, started debating the impending ordeal of dealing with summer traffic to turn over the property (at that point, we were going to manage it ourselves). We looked up the MLS to see if there were any similar properties closer to home on Okaloosa Island. We found this one and we quickly got it under contract, at a little over asking, as it was the last one.

How did you finance this deal?

25% down through Navy Federal's commercial department. They were busy but the process was unnecessarily dragged out an extra 30 days. As the market was going crazy, the Seller could have easily denied our repeated extensions, so it was very stressful. We also lost 30 days of summer income, so I won't be rushing back to them for another loan anytime soon!

How did you add value to the deal?

The condo was built in the '80's and had never been updated. So we gutted it and updated everything. My wife did a fantastic job on the decorating and we built some custom-made furniture. We added some unique features, like the red retro fridge to give it a kind of rustic, but modern beach look.

What was the outcome?

The unit is crushing it and the reviews have been outstanding. We're on target for a 37% CoC return!

Lessons learned? Challenges?

We were going to manage it ourselves but ended up going with a young couple that are super motivated, aggressive and up to date on all the latest technology. Their 20% commission is worth every penny and we are netting more through them than we would have had we managed it ourselves, but we don't have to do anything! Passive income is the best!
The loan was the only real challenge.

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

My wife, Crystal Ryan, was my agent. She is incredible! (and a great agent too!)
Stellar Dwellar are AAA level, STR property managers.
I DO NOT recommend NFCU for financing. Their communication was atrocious.

@Denis Ryan I concur with not using Navy Fed.. worked with them this summer (on a team as the buying agents) and it was a complete debacle.  The loan closed, but the buyer will never use them again, I will never advise a client to use them again (they were advised  not to use them this time...but sometimes clients are adamant and very loyal - which for normal banking, Navy Fed is awesome). But it was awful. The mortgage department got ugly with us and the very long time credit union it was ugly.  Ughhh.. brought back memories LOL!!!

CONGRATS on the STR in FWB! My parents have one in Santa Rosa Beach (just east of Destin/Miramar Beach), and they made over $30,000 gross for two bedrooms that they rent out each summer. Not even full houses! Just 2 rooms!!

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That is awesome @Denis Ryan ! I know exactly which properties you are talking about. I have two properties on Okaloosa Island and have a client who owns further down on Bream. That is a great area that some people have ignored (lack of imagination, lol). I think it has great potential for value appreciation too. I recently made an offer on a little unit just further down on Bream at the Commodore Landing studios building and lost out to an all cash offer, lol. Congrats again. 

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