Lakehouse Love.. We can't afford this.

[Brienna Roberts]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $665,000

STR on Lake Charlevoix. 250 ft of water frontage and 4 miles from Boyne City. It had two small cabins closer tot he water that were nearing end of life, but we knew if we could make money renting the house, the cabins would cashflow well too after some work. We bought and furnished in 2 weeks and had it rented nightly starting in Sept 2021. Gross income around $80,000. Occupancy varies with the season. Most draw is in the summer because we provide amenities to use in the water like SUPs and kayaks, outdoor fireplace, boat rental, etc.

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

We knew the value would only increase. We had no idea to what extent, but 5 acres on Lake Charlevoix and with three potential dwellings/rentals on one parcel, it would be a cash cow

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

This house sat on the market for almost 2 years. Over priced. People saw the cabins as an eye sore and they were! We always look for listings with terrible photography and marketing. This was the perfect example. We offered low.. It was listed originally at 899. Down to 799. We looked at it then but didn't offer until it hit 720. We offered 600 and got it for 665.

How did you finance this deal?

A portfolio loan with a small local bank. We sold one of our previous rentals for downpayment (1031 exchange) and used the other as collateral into the portfolio loan. Terms: 5/1 ARM at 4.5% amortized over 25 years. We couldn't have been happier

How did you add value to the deal?

Fixing up the cabins and bringing life back to the home that sat vacant for 2 years. Added central air, renovated bathroom, pulled down wallpaper and updated with paint. Furnished it well and focused on the beautiful water views.

What was the outcome?

We are nearly finished with the cabins which should rent for $250/nt each. (probably 100 nights a year). The house rents well and generates $80K/yr

Lessons learned? Challenges?

Buy something everyone will always want and is in limited supply... lakefront property.