All Forum Posts by: Keith Miller

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $327,000
Cash invested: $33,000

Bought as our home, then immediately built a separate entrance to the basement and have been running as an Airbnb ever since. The Airbnb brings in around $3,500 if half the mortgage is included as an expense, $13,500 if that's taken out. Either way, it helps pay most of the mortgage.

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

The size of the lot was an immediate draw, as I knew I could split it into three lots and build in the backyard. There was also a lot of value that I knew I could add to the interior.

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

MLS, negotiated down from the listed price by about 12K. The real reason I bought this house is that it sits on a 12,000+ square foot lot. I've just got my permit to the city to build two townhouses in the backyard, and am planning on breaking ground in the next month. One side will be two bedroom, the other side one bedroom. I plan on running them as either Airbnbs or rentals. We are currently renting the upstairs of the house for $2050 per month, and running the downstairs as an Airbnb.

How did you finance this deal?

10% down conventional.

How did you add value to the deal?

ave made a number of improvements to the housing, in the ballpark of at least $20K of sweat equity. I completely refinished the kitchen, including painting or refinishing every surface in it, as seen in the pictures below. Concrete countertops, new sink and faucet, new durable floors, tile backsplash, refinished and painted cabinets, added dishwasher, etc. In addition, I put up stained tongue and groove ceiling on the front and back porch, replaced the skinny 4x4 posts with 6x6 stained posts.

What was the outcome?

The main house, even on the new much smaller 5,000 sq ft lot, has recently appraised for $400K. It's bringing in significant cashflow, as the rental upstairs now pays the whole mortgage, and the Airbnb downstairs is doing very well. That cashflow is seasonal, so is more variable.

Lessons learned? Challenges?

Splitting a lot that has a mortgage on it is really hard. It took 9 months to get the permit and split the lot, with both of those processes often holding up the other one. In addition, I'm just starting the challenge of the build, but the projections are looking good!

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

Gina McDonald was my agent, I'd highly recommend her.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $327,000
Cash invested: $33,000

Bought as our home, then immediately built a separate entrance to the basement and have been running as an Airbnb ever since. The Airbnb brings in around $3,500 if half the mortgage is included as an expense, $13,500 if that's taken out. Either way, it helps pay most of the mortgage.

Have made a number of improvements to the housing, in the ballpark of at least $20K of sweat equity. I completely refinished the kitchen, including painting or refinishing every surface in it, as seen in the pictures below. Concrete countertops, new sink and faucet, new durable floors, tile backsplash, refinished and painted cabinets, added dishwasher, etc. In addition, I put up stained tongue and groove ceiling on the front and back porch, replaced the skinny 4x4 posts with 6x6 stained posts.

But the real reason I bought this house is that it sits on a 12,000+ square foot lot. I've just received my permit to the city to build two townhouses in the backyard, and am planning on breaking ground in the next month. One side will be two bedroom, the other side one bedroom. I plan on running them as either Airbnbs or rentals, depending on the market. We are currently renting the upstairs of the house for $2050 per month, and running the downstairs as a Airbnb.

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

The size of the lot was an immediate draw, as I knew I could split it into three lots and build in the backyard. There was also a lot of value that I knew I could add to the interior.

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

MLS, negotiated down from the listed price by about 12K.

How did you finance this deal?

10% down conventional.

How did you add value to the deal?

Lots of sweat equity, as detailed above. But the townhouses in the backyard should be the primary way that significant value is added to the property.

What was the outcome?

The main house, even on the new much smaller 5,000 sq ft lot, has recently appraised for $400K. It's bringing in significant cashflow, as the rental upstairs now pays the whole mortgage, and the Airbnb downstairs is doing very well. That cashflow is seasonal, so is more variable.

Lessons learned? Challenges?

Splitting a lot that has a mortgage on it is really hard. It took 9 months to get the permit and split the lot, with both of those processes often holding up the other one. In addition, I'm just starting the challenge of the build, but the projections are looking good!

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

Gina McDonald was my agent, I'd highly recommend her.

The meetups are back! May 18th at the Highlander at 6 PM, more details are here: https://www.biggerpockets.com/...

Brandt, it sounds like you'd be a great fit for coming to our meetup. I'm restarting the Missoula Real Estate Meetups, and all are welcome on May 18th at 6:00 at the Highlander in Missoula. We are lucky enough to have Matt Mellott presenting at the beginning, who is extremely knowledgeable about the Missoula market, as the founder of Sterling CRE. He'll be giving us an overview of the state of the Missoula market, as well as answer any questions you have.

There will be no attempts to sell you anything, this is purely a way to help build the Missoula investor community. The more we understand the market, and learn from each other, the more effective we can be. I'm looking forward to networking with you, and learning how we can help each other meet our real estate goals.

Sign up is below:
https://www.biggerpockets.com/...

https://fb.me/e/d3gaZBPar

For those interested in meeting up, I'm restarting the Missoula Real Estate Meetups, and all are welcome on May 18th at 6:00 at the Highlander in Missoula. We are lucky enough to have Matt Mellott presenting at the beginning, who is extremely knowledgeable about the Missoula market, as the founder of Sterling CRE. He'll be giving us an overview of the state of the Missoula market, as well as answer any questions you have.

There will be no attempts to sell you anything, this is purely a way to help build the Missoula investor community. The more we understand the market, and learn from each other, the more effective we can be. I'm looking forward to networking with you, and learning how we can help each other meet our real estate goals.

Sign up is below:
https://www.biggerpockets.com/...

https://fb.me/e/d3gaZBPar

For the original poster, we're restarting the Missoula Real Estate Meetups, and all are welcome on May 18th at 6:00 at the Highlander in Missoula. We are lucky enough to have Matt Mellott presenting at the beginning, who is extremely knowledgeable about the Missoula market, as the founder of Sterling CRE. He'll be giving us an overview of the state of the Missoula market, as well as answer any questions you have.

There will be no attempts to sell you anything, this is purely a way to help build the Missoula investor community. The more we understand the market, and learn from each other, the more effective we can be. I'm looking forward to networking with you, and learning how we can help each other meet our real estate goals.

https://www.biggerpockets.com/...

https://fb.me/e/d3gaZBPar

@Lovetta Mullins

@Brady Potts

@Linda Jones

@Benjamin Savage

@Austin Elm

We're restarting the Missoula Real Estate Meetups, and all are welcome. We are lucky enough to have Matt Mellott presenting at the beginning, who is extremely knowledgeable about the Missoula market, as the founder of Sterling CRE. He'll be giving us an overview of the state of the Missoula market, as well as answer any questions you have.

There will be no attempts to sell you anything, this is purely a way to help build the Missoula investor community. The more we understand the market, and learn from each other, the more effective we can be. I'm looking forward to networking with you, and learning how we can help each other meet our real estate goals.

https://www.biggerpockets.com/...

https://fb.me/e/d3gaZBPar

We're restarting the Missoula Real Estate Meetups, and all are welcome. We are lucky enough to have Matt Mellott presenting at the beginning, who is extremely knowledgeable about the Missoula market, as the founder of Sterling CRE. He'll be giving us an overview of the state of the Missoula market, as well as answer any questions you have.

There will be no attempts to sell you anything, this is purely a way to help build the Missoula investor community. The more we understand the market, and learn from each other, the more effective we can be. I'm looking forward to networking with you, and learning how we can help each other meet our real estate goals.

Agreed Brady, the Missoula market is bonkers right now, both for buying but also the rental market. The show Yellowstone has taken all available rentals in the Bitterroot, and the rental supply is at crazy low levels. Good situation to have if you have a rental, but it's a tough time to try and buy. There's definitely a growing interest for commuting distances from Missoula and Bozeman, but I'm less familiar with the Butte/Anaconda area. Helena is growing a lot in popularity, the long-term prospects seem pretty good as it's the capital. That's one of the places I'd be looking. 

I definitely will, my second shot is in early April so I'm getting ready to start scheduling it!