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Before and After Photos

Alohalani Beach House at Surfside Beach, SC

We ended up performing a 1031 exchange with the sale of our Tree House vacation rental in Beech Mountain, NC and we rolled our capital gains into this property. We always wanted a beach house and figured we would get more personal use out of this type of property vs. a mountain house while the kids were young. We also wanted to go ahead and get a property that would be more comfortable for larger groups of friends and family and that could generate more income annually for the same amount of work (when compared to a smaller property like the Tree House).

This property was in decent shape when we saw it was priced below market so we were instantly interested. Not to mention it also has a private pool, it is only a block from the beach, and large enough for bigger groups (we allow up to 13 guests currently). It would only require some cosmetic upgrades and some staging to give it some personality to make the listing stand out.

This project was instantly one heck of a challenge. We had so much cash into the purchase of this property that we had to stick to a tight budget. Not only did we need to get the property properly functioning, comfortable, and looking good for guests, but we also only had about a month and a half to do it since we were expecting our second child VERY soon. Our goal was to get the property turned over to our property managers and listed by the time our second child was born (NO PRESSURE) in order to minimize the holding costs with the home sitting vacant. This is also the largest home we have ever worked with (5 bedrooms and 4.5 baths. Oh my!!!).

In a nut shell we worked our butts off on this one. We had to get super creative and resourceful with the decor and renovations to stick to our budget and meet our investment numbers while still providing a high-quality vacation experience to future guests. We also had to make the home look as unique and enticing as possible to get as many reservations on the books to start seeing some profits.

Our biggest money savers was trying to reuse as much of the existing furniture pieces that came with the home. We purposely chose a boho/retro/tribal theme to not only allow us to work in some of these older pieces, but to also give the home a warm and playful personality of its own. We noticed many other listings in the area had the typical traditional coastal decor or the homes were super modern and luxurious with all brand new furniture (this is awesome if you have it in your budget, but we did not).

We also saved a bunch of money by keeping the existing cabinetry and going along with the natural wood by adding modern upgrades to them. Our entire renovations consisted of replacing the old school vinyl counters for some basic quartz and some gorgeous mint green back splash and hardware for the cabinets. We also decided to replace the flooring on the main floor with some unique weathered luxury vinyl plank. We needed to get rid of the old-school yellow paint that was on every wall in the home and decided to go with a more neutral gray color so we could throw some colors into the decor and art work without worrying about colors clashing.

We were incredibly fortunate to have found some super reliable contractors out there in the Myrtle Beach area so we were able to stay on track for our tight timeline. Our listing went live literally the same week that our second baby was born so we managed to pull this off (even with Tehane being 9 months pregnant).

We decided to turn over the daily operations and property management over to a third party company this time. Even though we had an excellent track record with the Tree House we just didn’t want to be on call all the time for guest-related issues and we realized that self-managing was preventing us from being able to take on more projects. Our property has been live as of January 2021 and we are already crazy booked out. Stay tuned for additional updates as we continue our journey with our Alohalani Beach House.

Update as of 10-13-21

This property had been renting out solid and we were watching the market prices increasing like crazy. We made a decision to go ahead and sell this property to take advantage again of the hot market – especially since we were itching to do another project again, but we had a ton of capital tied up in this home. We ended up listing this property fully turnkey with all furnishings, and guest bookings along with it. The sell price was for $700,00 at the time of closing so we consider this project to have been a huge success! It was bitter sweet to say good bye to our beautiful Alohalani but we were happy that another awesome family will get to enjoy the home. On to the next one… stay tuned for our next adventure!

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 a more detailed analysis report at tehane@gallimorerealestate.com