All Forum Posts by: Michael Weigum

When looking at Condotel's in North Myrtle Beach, local lenders are a good way to go.

@Myrtle Mike Thompson has some good insight. 

Owners and Listing agents here have been burned by bad financing and are being much more cautious accepting offers that they now know wont go through.

I also have helped several clients close on properties here utilizing DSCR loans. Having an agent who specializes in Condotel's and knows the in's and out's of the market can really be beneficial to your success investing here. Another option that investors are taking advantage of here is paying cash and then doing a delayed financing just to get the deal secured.

I totally agree. New construction in the area is taking longer and people need a place to live for 6 months to a year while they wait for the house to be finished. I see a huge demand for the 6 month rental market here in the Myrtle Beach area! 

Hi @Ryan Elam

I like the idea of a HELOC. I bought my first deal with a HELOC I have on my house in Denver. For me, I knew I was going to sell the house within a year or two, so the thought of an interest rate hike on the HELOC didn't bother me too much. You have to ask yourself how long you want that HELOC to be out there. When do you want to pay it off and what are the chances of the interest rate going up and how fast.

When I run the numbers for myself and other investors, this is how I calculate it.

GRI $40,000 minus

Debt (mortgage payment assuming 30 year note as you described) $23,408.64 minus

HOA ? minus

Taxes/Insurance ? minus

Management (assume 10%) $4000.00 minus

Equals Net = $12,591.36 Minus any HOA, Taxes, Insurance - divide that 50/50 with investor - Best case to you would be $6,295.50 per year. By my calculations that would be a 7% rate of return on your $90,000 investment. Is this a good deal? For me it wouldn't be. 7% rate of return on a STR is not very good. This is all based on the numbers you provided. If I missed something let me know. I love crunching numbers and analyzing deals.

Very nice place. It looks very clean and crisp, that is very important. However, a lot of the pictures don't make it look warm and inviting. Not sure why, just my first impression. Also, I would add something to showcase the local area in your photos and your home. It looks like it could just be a home in a lot of towns in the US. Showcase some local attractions. Think about why people want to be there. Airbnb is all about "the experience". Just my 2 cents from what I have learned. You could also checkout a youtube channel called Airbnb Automated. He gives a lot of good info on how to set up you place and analyze market data and get the best return on your investment. Good luck! Here's to your success!

We have been seeing the same thing in Myrtle Beach. One thing investors here do is pay the difference between the asking price and the appraisal. It's true it hurts your cash on cash a little the first year, but it doesn't affect you in years prior. What is your strategy for STR? How long do you plan to hold the property? If you are looking at a 3 to 5 year strategy, the extra money up front can easily be made up over time. In a sense, purchase price can become irrelevant. Your cash on cash will be lower the first year, but as years go on, your cash on cash will increase and so will your bank account!

Checkout Myrtle Beach! You can still get 20% Cash on Cash here even though prices are going up. 

I think a lot of it has to do with how you market it. I currently own one of each. I have and oceanfront that has done really well this last year. Now I just got an ocean view. I'm projecting $42,000 GRI for the oceanfront unit this year and $36,000 for the ocean view that is across the street. Personally I am ok with the lower GRI from the oceanview because my HOA fees and expenses are less, plus the purchase price of the one across the street is far less than the going rate for the current oceanfront. So, the NET should be similar. I'll have more data after we get through this year.

Hi @Sharonda Frazier

I'm in Myrtle Beach. I bought my first ocean front condo last year with a HELOC that I had on my house in Denver. I had a really good year last year with the condo, so much so that I purchased another one in January 2022 with a private money lender. It is up and running and doing well.

We are seasonal here in Myrtle Beach, but I personally beat the averages for the winter months, so that was a plus. There are certain requirements here for financing "Condotels" so it would be wise to talk with someone who knows the area and the laws. 

I'd be happy to answer any questions you have and share my experiences.

Investment Info:

Condo other investment in Myrtle Beach.

Purchase price: $90,000
Cash invested: $90,000

1 bed 1 bath Ocean front end unit condo. My first deal! STR in Myrtle Beach that did very well in 2021.

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

Cash Flow

How did you finance this deal?

Paid cash

Investment Info:

Condo private money loan investment.

Purchase price: $133,500
Cash invested: $40,000

1 bed 1 bath ocean view condo. STR on Airbnb and Vrbo

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

Cash Flow