May 4, 2026 | 3.5 Minute Read
In May 2025, we hit a point where we had to make some clear, strategic decisions.
The market felt uncertain. Interest rates were unpredictable. At the same time, we were dealing with multiple vacancies from tenant turnovers, and several of our short-term rentals weren’t producing the way we had projected.
Our portfolio was strong enough to absorb the pressure—but that wasn’t the point. It was time to tighten things up and optimize.
Reassessing Our Short-Term Rental Strategy
We made the decision to convert four short-term rentals back into long-term rentals.
Not every property performs well as a short-term rental, and we understood that risk going in. Still, we had invested roughly $125,000 into upgrading and furnishing these units.
Fortunately, we had built in strong equity positions—our cost basis was around 50% of appraised value. That gave us options.
After completing the final bookings, we delisted the properties, removed the furnishings, and shifted focus to leasing them out as long-term rentals.
By July:
- Three properties were leased at $1,675 (private pay), $1,320, and $1,282 (both Section 8)
.
By September:
- Those same three properties were sold as turnkey investments
- We fully recouped our STR conversion costs
- We generated an additional $120,000 in profit
.
The fourth property rented for $1,300 and stayed in our portfolio due to its great location and equity position.
Stabilizing the Long-Term Rentals
We also had four long-term rental turnovers happening at the same time.
- Two were re-leased and stabilized
- One was sold turnkey to a hedge fund due to long-term concerns about the location
.
The fourth presented a unique opportunity. It sat directly across from one of our top-performing short-term rentals—The Roebuck—which consistently grosses around $37,000 annually.
The properties were nearly identical.
So we asked the obvious question: should we convert this one to a short-term rental?
A Calculated Risk: The Magnolia
We already had extra furniture and supplies from prior conversions, which lowered our risk.
However, stabilization was the priority with the other properties, so we didn’t begin the conversion until November.
By January:
- Renovations were completed at a cost of $31,480
- The property was furnished and launched as “The Magnolia”
.
From February through March:
- Gross revenue: $3,905.93
- Average monthly income: $1,301.97
.
Early results confirmed we made the right call. As we move into peak season, we expect The Magnolia to perform in line with The Roebuck, projecting $35,000+ annually.
Refinancing for Efficiency
With both our long-term and short-term portfolios stabilized, the next step was addressing our debt.
The 9-Property Portfolio
This loan had:
- A 5.5% fixed rate
- A monthly payment of $4,851.80
.
After selling off several properties, only three remained—but the lender would not recast the loan and the monthly payment remained the same.
Even with a great rate, the payment no longer made sense for just three properties.
So we decided to pay off this note from the refinance of the following:
The 15-Property Portfolio
This portfolio had:
- A strong 4.5% rate
- A $12,622.50 monthly payment
- A 5-year ARM with only one year remaining
.
There was also significant untapped equity.
With increased rents across the portfolio, we knew we could refinance at a higher rate and still maintain solid cash flow.
Strengthening the Foundation
Here’s where the strategy really came together.
We paid off the remaining three properties from the original 9-property portfolio — free and clear.
These include:
- One long-term rental generating $1,280/month (tenant in place for nearly six years)
- Two top-performing short-term rentals grossing a combined $82,324 annually
.
That’s:
- $8,140.33 in monthly gross income
- Approximately $4,194 in projected monthly net for 2026
.
The Result
We closed on the refinance in April:
- New loan rate: 6.75%
- Monthly payment: $13,940.63
- Net cash flow from financed portfolio: $6,772.37
.
Combined with the free and clear properties, total monthly net cash flow is now approximately $10,966.37.
Unlocking Collateral
It doesn’t stop there.
With roughly $480,000 in equity across the free and clear properties, we’re now working with a local bank to secure a $1.5M–$2M line of credit.
This gives us the ability to:
- Move quickly on new acquisitions
- Operate without private or hard money lenders
- Increase our competitiveness in the market
.
We expect this to be finalized by June.
Takeaways
This entire process took a year—from uncertainty and underperformance to a fully stabilized, optimized portfolio.
Not every decision was perfect, but each one was intentional. We cut what wasn’t working, leaned into what was, and used our equity strategically to reposition the business.
That’s the real takeaway: stabilization isn’t just about occupancy—it’s about aligning your assets, debt, and strategy so everything works together efficiently.
Now, with strong cash flow, reduced risk, and access to capital, we’re in a position to scale again—this time from a much stronger foundation.