Project Summary

This property was purchased using a 1031 exchange with the sale of the clients other AirBnB in Beech Mountain, NC rolling the capital gains into a new property. This home was priced below market and in decent condition. The property featured a private pool, was only a block from the beach, and was large enough to host up to 13 guests, making it an ideal AirBnB/STR. The property required primarily cosmetic updates and staging to enhance its appeal and create a standout listing.

The project, however, posed significant challenges. With substantial capital invested in the purchase, the client was forced to adhere to a tight budget. They also had a narrow timeline, as the birth of their second child was imminent. The goal was to complete the necessary renovations and get the property listed with their property management team before the baby arrived, in order to minimize holding costs associated with the vacant home. This project also marked their largest property to date, at 5 bedrooms and 4.5 bathrooms, adding further complexity to the task.

Despite the tight constraints, the team worked diligently to meet their goals. Creativity and resourcefulness were key to staying within budget while ensuring the property offered a high-quality vacation experience. The home was designed to be unique and inviting, aiming to attract bookings and generate income as quickly as possible.

One of the team’s most significant cost-saving strategies was reusing existing furniture that came with the home. They opted for a boho/retro/tribal theme, allowing them to incorporate older pieces while giving the home a distinctive, warm, and playful personality. This choice set the property apart from other local listings, which either featured traditional coastal decor or ultra-modern, luxurious furnishings (the latter, of course, being out of their budget).

In addition, they kept the existing cabinetry but updated it with modern touches. The renovations included replacing outdated vinyl countertops with basic quartz, and adding a mint green backsplash and new cabinet hardware. The flooring on the main level was updated with a weathered luxury vinyl plank, and the walls, previously painted yellow, were repainted in a neutral gray to allow flexibility with accent colors in the decor and artwork.

Fortunately, the team found reliable contractors in the Myrtle Beach area, ensuring the project stayed on track to meet their tight timeline. The property listing went live in the same week as the birth of their second child, which was a remarkable accomplishment. Since the property went live in January 2021, bookings have been consistently strong, with the property often fully booked well in advance.

Update as of 10-13-21

The property had been consistently rented and the team had observed a significant increase in market prices. After careful consideration, the client decided to sell the property in order to capitalize on the strong market conditions, particularly as they were eager to take on another project but had considerable capital tied up in this home. The property was listed as fully turnkey, including all furnishings and guest bookings, which added value to the sale.

The property ultimately sold for $700,000 at the time of closing, marking the project as a significant success. The clients netted $108,000 on the sale of this home. While it was bittersweet to part with their beloved Alohalani Beach House, the client was pleased that another family would now have the opportunity to enjoy the home.

Numbers Summary:

Purchase Price: $500,000

Renovations and Start-Up Expenses: $37,000

Estimated Annual Income for 2021: $80,000

Numbers based on current total reservations: $1952/mo Cash Flow · 10.1% Cap Rate · 25.5% COC

Final sale price: $700,000

Reach out for more info on our consulting services if you would like to do a similar project.

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