Thread by @nathanbarry

Last fall I bought a 4-plex in Nampa (a suburb of Boise) to turn into an airbnb with the help of 2 friends.

Each unit is ~900 sq ft (2 bed, 1.5 bath). Purchase price: $339,000. We had to pay cash because it was in such poor condition.

Here's a thread about how it all went:

2 units were poorly remodeled, 2 units had serious issues including water damage & needed to be taken down to studs.

We estimated $130k in remodeling expenses with Patrick (one of the partners) doing the construction work. But quickly went over as HVAC was far more expensive.

We replaced all the windows, doors, siding, roof, plumbing, flooring, etc. Work started in October and by mid-December we had the first unit ready for Airbnb.

Winter is always slow here, but we still made $764 over the holidays as we picked up the first couple reviews.

On average it costs $4,000 to furnish a unit. We took advantage of Black Friday sales at Kohls to buy tons of sheets, pillows, towels, and kitchen supplies. This is about 1/10th of what I ordered.

Good thing we have the farm truck!

Then we got started on the next unit.

By mid-March we had 3 units on Airbnb and were waiting on a lease to finish before we could remodel the 4th.

Then the pandemic hit. All our stays canceled. Airbnb basically shut down and we got really nervous. Summer is the busy season, would we not make any money?

March was rough, but then in April more stays started to come in. People who were in town to care for family, someone who needed to quarantine for work, people who already had moves planned.

These aren't vacation rentals, but more of extended stay furnished apartments.

Here are the totals including the $800/mo long-term tenant. Number in parenthesis is the number of units on airbnb:

December $1,564 (1)
January $1,494 (1)
February $2,202 (1)
March $3,200 (2)
April $4,497 (3)
May $5,737 (3)
June $7,621 (3)
July $8,170 (3)

We're not quite at our pre-COVID projections, but we're not that far off. In August our final unit will be renovated and on Airbnb. It already has a 30 day stay for just over $3,000.

Depending on how much we dip in the winter I expect it to average $9,000/mo year round.

Once the remodel was finished we were able to get it refinanced. They valued it at $480,000 and we paid 25% down. The payment with insurance & taxes is about $3k/mo on a 15yr mortgage.

Technically it was a cash out refi on a multi-unit investment property. The highest rate. :(

We're targeting $9k/mo in revenue and $4.5k/mo in expenses ($3k mortgage + $1.5/mo in utilities management, cleaning, and improvements) which would mean an average $4.5k/mo in profit.

Significantly more than if we did long-term rentals.

Our friend Amanda took incredible photos of the finished building. Professional photos make all the difference.

I plan to do 1 project a year like this. Since ConvertKit is so successful people ask why...

1. I love it
2. Diversify income/assets
3. Fun projects w/ friends
4. Live the principles in my Ladders of Wealth Creation post

nathanbarry.com/wealth-creatio…

Happy to answer any questions!