First Purchase (maybe) - Tree House - Need Guidance

[Mike Schouder]

Like many of you, I've been in analysis paralysis for years about investing in STR but I'm trying to make some things happen. I came across a property that I have been absolutely struggling with making a decision on and would appreciate input or guidance.

The property -

The property is set on 12 acres (some of it developable) located and in driving proximity to a popular state park.  It is a very unique property that consists of a "tree house" that is purposely designed as a couple's retreat - it's very romantic and has all the right touches.  Additionally, there is a set of mall campers on the same property that can be rented out - very cute and fun.  It's a very well-designed property.  There's potential to also make it an event venue and there is 1-2 developable area on the property that has been "perced".  The property has 200+ 5-star reviews on Airbnb.  The current owner currently has a small local team in place to manage cleaning, landscaping, etc and she does some of the hands-on management such as putting together welcome pkgs for guests, etc.

Bookings and Financial -

The property has been on Airbnb since 2019 and did about $140k in '21 (don't have visibility to '22 numbers) and much of '23 is booked already on Airbnb. My best estimate is that occupancy is a minimum of 80%. Based on the numbers provided I estimate the property will have an NOI of $87k

My dilemma - 

The owners are eager to sell but the asking price is $900.  When I run my numbers my best evaluation of the property is around $750 ( EBITA x5 with a 50k premium applied).  So, issue one is I'm struggling with the valuation of the property and am concerned I'm missing something and also very worried about my first purchase being such a HUGE investment.

Financing the property - this is where I'm most paralyzed.  I was looking at using a DSC loan but as I listen to more podcasts/read articles here on Bigger Pockets I'm not sure how to approach it.  While I could put 10% down it would wipe out my liquid capital.

In short, I'm stuck and not sure where to go with this.  Thanks in advance for your input/guidance.