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Guys, we did something really crazy. It's either going to be the worst idea or the best idea we ever had.

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So we decided to invest in a pool house, and it's not any kind of pool house. It's an Airbnb pool house in Canada, in Edmonton, in a market where it gets down to -35 or -40. What were you thinking? Let's dive into it today.

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Okay, welcome back everyone. Michael and Catrini here with STR Wealth Academy, where we talk about all things short-term rentals and how to build long-term wealth.

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In today's episode, we are going to break down our latest STR acquisition purchase that we had made during kind of an interesting time, I guess you could say. It's never a dull moment. A lot of turmoil, a lot of political strife happening in Canada. Not a lot of great economic news coming out of Ottawa recently here. A lot of downturns, a lot of, you know, just housing is just getting wrecked in our country. And you're just like, okay, so why the heck did you purchase a house? Number one, and number two, a house that has a pool in it. And number three, why did you do it for a short-term rental Airbnb investment? Like it's so contrarian that everyone's just like, really? You did this and why?

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So first thing before we kind of get into the specifics is that generally speaking, when everyone is going one direction, usually that's when opportunities start to percolate up in the market and you find these very unique situations that, with the right skill set applied to it, can create a lot of value that other people simply just aren't seeing. So when everyone is scrambling, stressed, you know, they're scared. It's like fear. You really need to be like, hmm, where's the opportunity lie here? Because When everyone is in a frenzy, everyone's like, oh, this is the greatest market. That's when you should be fearful, right? So this is really the opposite, and this is when you're gonna see a lot of deals coming through. There's a lot of fear in the market, a lot of turbulence, there's not a lot of stability, and that's actually when the opportunity arise.

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This is exactly what happened with this deal, and we wanna pull back the curtain, look into why we did this, and to really show you, number one, short-term rentals are still an incredible opportunity if you know what you're doing and if you know what you're buying or getting into or managing and how to still be profitable in this kind of market. We're entering a market right now where you definitely have to be much more selective and much more picky about the type of properties that you take on, whether you're managing, whether you're doing rental arbitrage, or you're going down the path of actually purchasing a property. So this deal that we're going to walk through today took a fair bit of due diligence.

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We're going to share our screen here. We're going to show you guys just some photos of the property just to give you like a perspective of exactly what we're talking about just so you can see kind of the specifics with it.

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One of the things that was interesting about this particular house is it had actually sat on the market for almost a year. And the reason why it wasn't selling was one, the fellow was simply just asking way too much and he was trying to capture a value in a market that just simply did not exist anymore. He was trying to shoot for the moon on this one and I believe it was around the high 700s when he had listed it last year in 2024 September. He had relisted it back down at $675,000. We went and took a look at it and the first thing we walked into this house, it had just an unbelievably bad smoke smell. So the guy had smoked in the property. So a lot of people were getting turned off by this. This kind of made our ears perk up a little bit. We're like, aha, so this is why it's not selling. First it was overpriced and two, it just smelled like smoke.

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It's just such a deterrent because this really is a family style home. It's in a very mature neighborhood. The lot is 8,000 square foot. It has a beautiful pool. It has seven bedrooms and four bathrooms. Like this is enormous. This is a really big house. And so this would be a family type market. And the first thing people walk in is they're hit by a smoke smell and it's just an immediate turn off.

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Coming in here as investors and with the lens of a short-term rental, well, that's pretty easy to fix for us, right? It's kind of the first lesson when you're looking for investments, especially with real estate, is if you're finding problems, then that's where some opportunities tend to make themselves appear because if everything is perfect with the house, you're probably not going to make as much money on it because there's no opportunity for you to be able to improve the asset, which something like this is a fairly easy thing to fix. It's basically smoke remediation, paint, and an ozone. It's not that big of a deal.

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So guys, this video isn't a flex being like, oh my goodness, look at us, we're buying properties. It's really just to show you that there is opportunity and there's going to be even more opportunity for people to get into this market with this unstable real estate market coming up and the opportunities coming and how to know when to buy or when to get into it and make sure that you're going to be winning with a high ROI on your purchases.

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So how did we identify this specific house though? Well, the first thing we did is we hopped over to AirDNA, and we punched up Edmonton, which is where we were looking to make a purchase. And then we just simply went to the top short-term rentals in our city and sorted by highest to lowest revenue. And when we did that, a few things jumped out right away. So all of the top performing properties were six bedroom homes, had unique features or amenities that other homes simply didn't have. Actually, the top performing listing when searched was one that had a pool. It was the only property in the whole city that had this unique amenity. So that's something you might call a clue. The other thing we noticed was it was a six bed, three and a half bath home.

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So you could see kind of a trend, like the top properties just were simply larger, had more bedrooms and had either unique features or unique amenities with it. So the reason why this house stood out to us was simply because, well, it had a unique amenity and had a large number of bedrooms. That's what initially turned our attention onto this property to begin with.

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The main thing here guys is really just to show you number one, short-term rentals are not dead. The truth is that Airbnb is not oversaturated dying. It's only half truth because really what side of the Airbnb industry is dying are bad listings. And what we mean by bad listings, it's commodity listings. They're not unique, they're not different, and they're losing their pricing power because there's so many of them, and it's just four walls in a bed, right?

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So that's why we wanted to bring this up, is what's still thriving? And that's what we just saw here, is like, what are the top short-term rentals? And these are ones that solve for space. They all had six or seven bedrooms in our market. They all had an experience and an aesthetic. So those ones had a pool. They had a really nice aesthetic. And there were large homes that had a theme, story, or a draw.

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On this particular property, we're going to be modeling this as a private Nordic spa experience. So we're going to go all out on this property. So barrel sauna, cold plunge, fire table, fire pit area, outdoor shower, a massage table, a relaxation area, yoga room. This is where we're really leaning into the wellness market of it. It's very unique. It's very private, very different. And up here in Canada, we have a lot of Nordic spas and retreats, but they're not private, they're public. And so really bringing that and making it a private one in a city is such a game changer.

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Long story short, we ended up getting it under contract for $635,000. So we actually got the seller down $40,000 in price. So again, building in some more margin of safety on our entry so that we weren't overpaying for the property.

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The home price was 635 of what we got it down to. Then we have 20% down payment, we got closing costs. And then we just have some pool maintenance needed in there as well. And really, it's just going to have all the different elements of what we need to furnish the home, have all the amenities that Michael just said. And it's going to land us probably right in between about $200,000 to $225,000 of upfront investment.

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What we project this property in terms of of monthly overhead between mortgage, utilities, insurance, taxes, upkeep, you know, the works, it's going to be right around $500 to $5,500 a month to run this property.

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Now, when we were projecting revenue on what we felt was possible, we had kind of a good, better, best scenario. At the most conservative level, we said it was right around $125,000 a year. So even at the base base level, we would be cash flowing roughly $60,000 a year on a net basis. Then the expected one of what we have on here is really looking at the expected level, which would be 150K. We think this property could revenue around $200,000 a year. Now again, this is obviously the best case scenario. But if it does, then this property has the potential, in our view, to do 120 to 130, maybe even $140,000 a year in net profit.

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So you look at that investment, 635, and it could potentially cash flow between anywhere to 60 to 130, 140 net cash flow. You're looking at this, you could have this investment paid back within five to seven years easily with a net cash flow on this, which is incredible.

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Anyways, we'll make several more videos kind of taking you guys through the whole process 'cause we don't actually get possession of this house until the end of this month. But we will show you guys step-by-step exactly all the things that we are gonna be doing to add value to the property, to help the property stand out and be unique and different. And we will give you guys live updates as we start going live, getting bookings, and making some pretty exciting stuff happen.

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Please leave your comments below. Let us know your comments below. Do you think we made a stupid decision, a great decision, or maybe an okay decision? We want to hear from you guys so let us know in the comments below and we will keep you posted all throughout the process as we kind of get underway on this journey that we're about to take. Alright, see you in the next video guys.