Buying a Fixer Upper Beach House With My Sister
My sister and I grew up vacationing in a beach town in Florida, around 6 hours from our hometown of Roswell, Georgia. We have really fond memories of the area and for years have fantasized about one day owning a home there to continue these memories with friends and family for years to come. 30A felt like home to us. When we first started daydreaming about this beach house, I honestly didn’t see it happening in our 20’s & 30’s. That was something our rich friends’ parents owned, not us. But every year, we continued talking about our goal and planning. After we partnered on our first house together in Austin, when my sister was 24 and I was 26, it felt like our dream beach house may be a more realistic goal than we thought!
If you’re interested in utilizing strategies like my sister and I did to get our dream vacation home, consider watching our free video series: First-Time Home Buyer Mini-Course!
Why did we partner to buy real estate?
My sister Stefanie works in the fashion industry and is the Creative Director at Urban Outfitters. Her weeks are spent creating, traveling, and managing. Every time I talk to her, she is in a new city or country for her job. Because of her crazy schedule and the expensive fashion-forward cities she lives in, buying real estate is super unattainable for her to do on her own.
When we first decided to buy a house together years ago, buying by myself was difficult for me as well. I had just started working for myself, and I didn’t have that nice and shiny stable W2 income lenders were looking for. Stef and I worked out a great real estate partnership because we both had different strengths and things we brought to the table. I am in the real estate industry and have renovation experience, and she has a corporate job and an eye for design. We are also both organized and have go-getter personalities.
How did we afford to buy this beach house?
Remember that house in Austin I told you we bought together? I still live in this home and have slowly fixed it up and made it my own. A few years after we purchased it, I was able to utilize something called a cash-out refinance. This allowed me to take my sister off the home loan and free up some of her buying power. She wanted to remain a partner in the Austin home, so she is still is a 10% owner. With the cash-out refinance, I was also able to lower my interest rate AND pull out $84,000 of equity from the house. Plus, my mortgage payment only went up $139 a month. I was blown away! I had no idea this was something I could do when I first bought my house. I talk more about my cash-out refinance in this article.
So, I had $84,000 that I could potentially invest in another property or two. Stef had some money saved in her company-provided retirement fund (if you aren’t contributing to yours, maybe get on that!) and used it to help purchase the home. To cover the renovation and furniture costs, she used her bonus money and opened up an 18-month interest-free credit card while she continued to save money from her W2 job each month. We are 50/50 partners on this deal and split everything down the middle. We each contributed $60,000 for the purchase, renovation, and furniture. We opened a joint checking account, and all expenses go through that account to track everything for our accountant. 2021 will be a big year of write-offs!
Beach home sale details
Location: Santa Rosa Beach, Florida
Sales price: $455,000
Lot size: .179 acres
Layout: There are 2 units, and this house is somewhat of a “sneaky duplex”. The upstairs has 3 beds, 2 baths, and 1,323 square feet. The downstairs unit is an efficiency apartment that is around 550 square feet. We only renovated the top unit and plan to renovate the bottom in the winter of 2021.
We bought our home, sight unseen, during covid and wanted to keep traveling at a minimum. So, we found a realtor familiar with renovations and short-term rentals that we could trust from afar. Let me know if you’d like us to connect you with a fantastic realtor you can trust as well!
Stef and I had been eyeing this particular house for a couple months. It had been on the market for almost a year, so we sent it to our realtor to take a look. She went to the property and gave us a tour via Facetime. She concluded that it was a good find, and we made an offer and got the house under contract in August of 2020.
Our house had been on the market for a while because it was a pretty funky property. It had a weird exterior shape and color, and the interior design was very dated. I don’t think the majority of people could see the potential as we could. We also jumped on this opportunity because this particular beach town is very pricey and desirable. So, let’s be honest, this house is what we could afford, and we became obsessed with all the possibilities it had!
We went under contract in August but could not close until November because we had a few issues with the seller. But it all worked out in the end, and we were officially owners of a home in the hot 30A area!
And don’t forget - we bought our house sight unseen. So we went through the entire inspection process and closing process from afar. I had never done that before, and I think it went so well because we knew the area and had a great realtor. The first time we went down to see our house in Florida was over Thanksgiving, and it was surreal! It felt like a dream come true because it really was!
On our first trip down during Thanksgiving, we only had mattresses at the home and spent the week planning, researching, and coming up with a renovation game plan!
Finding contractors in an unfamiliar area
Typically, I like to plan out my renovation process before closing on a home, so we can hit the ground running. This project was different because we had not even seen the house in person until a couple weeks after we closed on it. We still needed to walk the property in person and meet and vet a handful of contractors and vendors. Because I didn’t have any vendor connections in the area, I started off by asking my realtor. I also found a local homeowner Facebook group that has helped me tremendously.
I talked to 3 contractors while I was in town, but they gave me red flag vibes with their communication. When I got back home to Austin after that first trip down to Florida, I decided to keep looking for a contractor remotely, and I’m glad I did! I found a company that had an online presence, which I have found to be rare with contractors. I liked this option because we would not be in Florida during the renovation process, which would give us a bit of leverage if they didn’t do a good job. The company would want to keep their reviews and reputation up.
In hot markets like the one we are currently in, contractors tend to be really busy, and if you are not in constant contact with them, they may ghost you or do slower work. It’s a weird dance. The next educational product we roll out at Open House will be a step-by-step guide on dealing with contractors and renovation projects. If you’re interested in a mini-course like this, you can sign up here to be the first to try it out.
I always tell people to be around for their renovation project to keep an eye on things and make sure the contractors are showing up and getting work done on time. I did not follow my own advice for this project! My sister and I were both super busy with new product launches, and I knew we wouldn’t be able to get to Florida often. Not to mention we were at the peak of the pandemic - not a great time to travel! Working with a contractor who had over 50 five-star reviews online seemed like the best choice for us, even if the bid would be pricier. I knew it would be worth the money and save us time and energy in the end.
The renovation process:
Even before we had closed on the house, my sister and I started dreaming about what the final product would look like and the work we’d do. I created a board on Pinterest and pinned absurd things we would never actually be able to afford. My sister, on the other hand, made a design deck and planned out each room realistically. Early on, we decided that I would handle the logistics of the deal, create a budget, and manage and hire our contractors. I’d also take care of our Airbnb listing setup and systems. Stef made our design deck and picked out and ordered all of our materials and furniture. We both handle managing the property.
Throughout the entire project, we stayed organized by keeping everything in a spreadsheet.
Our most essential spreadsheet tabs included:
Budget: Where we keep track of monthly expenses.
Materials: My sister put all the links of every material and piece of furniture she ordered and the price.
Details: Where we kept all of the contractor and vendor information and our utility and mortgage information, as well as passwords.
Presale info: Where we kept all the details from the sale of the home. How much we put down, how much the inspection was, etc.
To-Do list: Anytime we thought of a task we needed to do, we would add it to this sheet and assign it to a person.
We decided what work would be done first by going through our inspection report. We picked out anything we thought would be good to fix before we had guests stay. We wanted to avoid getting calls at inopportune times from people saying something needed to be fixed.
Luckily, the seller replaced the roof before closing. From the report, all we needed to do was replace the water heater, hire a pest control company, and service the AC. The rest of the work we did was cosmetic. Our contractor started renovating in January, and our home was ready to rent by the end of April. Initially, our contractor told us the work would only take a month, but I assumed it would take around 2. And the reason it actually took 3 months was because of the materials. My sister ordered the majority online, and we had to wait for them to arrive. Some of the things arrived late or damaged. We also didn’t realize we’d need to order certain materials (which I think could have been communicated better by our contractor), so some of it was ordered last minute. All in all, It was a good learning experience!
List of the majority of the work done:
Gutted 2 bathrooms
Added a new window to the kitchen
New floors
Interior & exterior paint
All new fixtures & lighting
All new outlets
All new door hinges
New front door
New kitchen countertops
We painted the original kitchen cabinets and took down some upper cabinets for open shelving
My bf and our friend built bunkbeds
If you’d like to see footage of the entire process from start to finish, I documented it on 3 highlights on Instagram.
Our beach house design
We wanted a light, airy feel for the upstairs with lots of neutrals and a clean, relaxed feel. So when anyone stayed there, they would feel completely relaxed and comfortable. We only renovated the top unit, and the downstairs apartment will be designed a bit funkier once we make enough rental money for the second round of renovations. I think we will eventually rent out both units together for bigger groups to stay. I also already have so many fun vacation trips planned in my head for all our friends and family!
My sister picked out specific products that people would rave about and certain brands that people love and see as higher-end or trendy. She truly implemented the skills that make her excellent at her day job into this renovation project, and it shows. This was her first design project, and it came out SO well. I’m really excited about our next project together.
If you’re interested in hiring Stef to help you with a design route for your next project, shoot her an email!
We also included a fully stocked kitchen setup and little comfort details like beach bags, hydro flasks, beach towels, umbrellas, and chairs. The reason we added these touches to our property was not only to create a luxurious beach vacation for people but also to attract guests we’d vibe with and understand. When I wrote out our Airbnb listing, I mentioned: No “live love laugh” signs will be found in our home...just not our style! I think that really resonates with many people who are used to staying in Airbnb’s that were quickly designed and renovated to make a quick buck.
Here’s a list of a few of my favorite materials we included in our beach house:
These coffee cups from Urban Outfitters
These cutie lights in the kitchen
Kitchen table I’m obsessed with
Amazing coffee (Levercraft coffee) & an excellent coffee maker
Snack bags to take to the beach
Managing an Airbnb from afar
Click to see our Airbnb listing!
Stef and I decided to manage our property from afar instead of hiring a manager because we wanted to save money. Also, this house was like our baby; we wanted to keep tabs on it! Hiring a short-term rental property manager usually comes out to cost around 30% a month. So, if we made $5,000 in a month, we’d have to give up $1,500, and we were not ready to do that! I have some experience with Airbnb management and figured that if we were really organized and had sound systems, we’d be successful on our own. We also had a newly renovated home, and there wouldn’t be much to complain about. So far, so good.
Here’s what I did to prepare to self manage our Airbnb:
First, I got back on that 30A homeowner FB group and asked around for any recommendations for short-term rental cleaners. They were all very busy, but I did end up finding a group I felt comfortable with.
When I was in town again in April, right before our first guest arrived, I got back on that FB group again and asked around for a recommendation for someone who does odd jobs and handy work in the area. I was lucky and found a small business owner who does just that! I had him install blinds and do a few odd jobs while I was in town, not only because I needed help but also to test them out. They were great!
Once I had a little crew to help while we weren’t around, I then created a document with about 15-20 different “Airbnb listing title” names that I could swap out every so often. Airbnb has its own algorithm, just like Instagram or Google, and apparently, it likes when you swap pictures and titles out every so often.
I then wrote down a list of rules for guests:
You can use our bikes for free with a Venmo deposit
No bookings for anyone under 25
No parties
No glitter
I then wrote up a good description of the house and who we were. I made it personal, so the guests could get to know us a bit and see how much work and care we put into the home and managing it ourselves. We also named our property the “Nuri House” as it has meaning to both my sister and me and created an Instagram account for the property.
I bought an electric door handle to set up temporary codes for each guest that automatically starts and ends with their reservation.
When I first made our listing live, I only opened it up for bookings in April and May. At the time, we had around 5 photos, and they were not a great representation of the space. But I advertised it to my followers on Instagram and offered a discount for people in exchange for a review and feedback. We did have some random people book, but they have turned out to be wonderful guests! They really liked the design and our vibe and commented on the “no live laugh love signs”.
These were our earnings per month so far (This included 20 days we blocked off for us to stay):
April: $4,637
May: $4,860
June: $9,188
July: $7,831
Our monthly mortgage payment is $2,250 a month. So we are cash flowing even on our discounted months, and during months we are staying there. I think that December-February will be slower, but that may be when we renovate the bottom unit of our home this year! In the future, it will be a great place to escape to and live/work remotely. I’m excited just thinking about it! I’ve been working hard to set my life up to live in this way, and now I can do it with a “free” place to stay. Also, I grew up in Atlanta, and it’s closer to my dad and my friends who still live in the South.
What’s your next move?
I hope you have enjoyed learning about me and my sister’s little real estate journey together. If this story was inspiring or invigorating to you, please know that it can absolutely be a possibility for you as well! It truly takes planning, strategy, education, and a bit of saving. This is not something I made a reality overnight and not something I could do alone. But I had my eyes and my focus on this dream for years, and I made sure to continue to make moves that would get me to this goal sooner than later.
If you’re interested in learning more about buying your first home and eventually taking on a project like this, I highly encourage you to take our Homeschool course. We will help you navigate your 5-year real estate plan and leave with a strategy that works for you. Also, you’re stuck with us for life! We have an online community for continuous support so you can get answers to your real estate questions for years to come. If you’re not ready for that yet, just remember to continue to educate yourself and stay inspired! Rooting for you all. Until next time.