Hi. If you are receiving this, it is because we have discussed real estate in the past and you expressed an interest in real estate investment. This information shares an opportunity that was brought to my attention by someone that is already an investor.
First, please do not send investment questions via AirBNB. There will be a meeting scheduled where investment questions will be addressed.
Let’s start here - The best way for me to explain this opportunity is to share the exact investment that my friend currently holds.
As you can see, this property is an AirBNB rental, also referred to as a Short-Term Rental. This unit uses the arbitrage method which is where a house or apartment is leased and then used as a Short-Term Rental with the full knowledge and blessings of the landlord.
This unit is hosted by Y|S who is the entity that finds the properties, puts them under lease, shares these deals with investors, manages the furnishing of the property and manages the operation of the property.
If you go to the Y|S hosting page, https://www.airbnb.com/users/60105727/listings, you will see the 170 properties under their management for different investors.
How does this work?
- Y|S introduces a property or properties to potential investors.
- An investor or investment group agrees to sign an investment agreement for the property or properties.
- A design for the unfurnished property is completed which creates the shopping list to furnish the apartment and the associated costs for the fit out.
- The initial investment covers the cost of the furnishings and fit out and the cost to bring the property online and available for rent.
- The money generated by the Short-Term Rental pays the monthly lease and the monthly management costs.
- The money generated over and above the monthly lease and monthly management costs is profit paid out to the investor.
Here is some quick ballpark math.
Investment in the property above was about $30k
Lease is $3000 per month.
June has 23 nights rented at $213 = $4899
Pay the lease first - $4899 - $3000 = $1899
Pay management costs - $4899 x 15% = $735 (*taking multiple properties in a deal lowers management costs to 10%)
Profit is rent minus lease cost minus management cost = 4899 – 3000 – 735 = $1164
At this monthly profit level ($1164), the initial $30k investment is paid off in 26 months.
Profit will vary month to month based on the nights booked but the rate can also be modified to maximize booking potential.
The current investment opportunity involves 10 newly constructed units in Philadelphia. My goal in sharing this opportunity with you is to put together a group of investors that would be able to invest in at least several of these units. The initial investment cost varies based on the size of the unit and the desired level of fit out and furnishings.
If you are interested in hearing more about this investment opportunity, I am looking to set up a virtual meeting tentatively during the week of 6/13 with Y|S to learn more details about the Philadelphia property.
Please drop a note to email@example.com or leave a message at 215-704-1138 if you are interested in joining the virtual meeting to learn more.