SUMMARY
My name is Colin Burke, and I own a five acre "town" in Pray, Montana, where we have three log cabins and one additional unit currently used as vacation rentals. I am seeking $348,000 to implement the infrastructure (septic/electric/water/road) needed to build two more long-term rental cabins.
BACKGROUND
I bought the five acre property in September 2018, which still contains no zoning and no covenants. At the time, the property included a single-family home, a defunct general store, and a currently functioning post office, which pays a land lease. I immediately began renovations, converting the single-family home into a duplex, living on one side and renting the other as a vacation rental. At the same time, work began on two Amish-built 2BR/1BA log cabins. The two cabins were finished August 2019 at which point were listed on AirBnB/VRBO. The third cabin is slated to be live on AirBnB/VRBO in March.
After consulting with local vacation rental managers, I ascertained the cabins could make $25-30k gross per year; I set the goal for $30k and hit that benchmark for both 2019 and 2020. In 2021 each rental hit an average of $50k gross for the year. At this point in time I have invested over $150k of my own income into this project, along with many hours finishing the interior of the cabins. I worked with a neighbor to install flooring, drywall, trim, cabinets, counters, etc. I am 1000% involved in this project, and have the numbers to back up my confidence in the vision.
VISION
My vision for this property is not vacation rentals, rather long-term rentals for my community. Pray used to be a community hub, where locals would stop by the general store to buy the paper and coffee, then hang out to talk with locals and tourists. The 10+ years prior to my purchase this property was left largely unattended, and I have devoted myself to its restoration.
Many parts of this country have housing shortages, and Paradise Valley is no different. I have been fortunate in life to have a successful career as an SAP consultant, which has significantly aided the building of this business. Unfortunately, I am at max bandwidth between consulting and owning/managing the current rentals. My plan is to build Pray into a place where waiters, Yellowstone National Parks employees, and other locally employed individuals can live in a house they're proud to come home to. In order to complete my vision, I am seeking an angel investor in order to both complete this project and provide the ability to devote myself full-time to this project.
BUSINESS MODEL
I devoured literature, blogs, and videos on how to efficiently run a vacation rental business. I learned concepts and applied them. Here is my business model:
- The cabins were built with "Mountain Modern" in mind. These are true log cabins that evoke a rustic sentiment, while the interior was built with every common comfort in mind. Strong WiFi, smart thermostats, memory foam mattress, smart TV, etc.
- We stay at almost 100% occupancy from June - September. Our main clients are families on their way to Yellowstone Park, wedding party overflow, fly fishers, and 'staycationers' from nearby Bozeman or Billings.
- Nightly rates are maintained and automatically adjusted through a pricing tool called Pricelabs. This takes into account comparable properties' rates, holidays, and supply/demand to automatically push out nightly rates.
- I use Guesty as my PMS software for collating reservations from AirBnB, VRBO, & my direct booking website. This tool also sends automated messages to guests.
- TurnoverBnB is my cleaning platform, also integrated into the aforementioned platforms. This sends my cleaners dates & locations of what cleanings are needed, and sends them payment automatically.
- In 2021 I hired a new marketing manager, who handles social media, strategy, and promotions; all with the goal of driving traffic to my direct-booking website, vacayinpray.com
- I have two accountants; one for bank reconciliation, projections, and planned/actuals, and another for my taxes.
In 2021 I promoted one of my cleaners to "Head Cleaner & Inventory Manager". She handles any schedule changes with the other cleaners, and orders inventory through our Amazon Business account.
The general store building on the property is a 100+ year old historic building, and used to be a post office, gas station, hair salon, and community gathering place. This building is in need of a major renovation, but has major potential as a storefront. It is 5 minutes from:
- Upscale fly-fishing compound & wedding venue, Sage Lodge
- Chico Hot Springs Resort, which has two restaurants, horseback rides, and is also a wedding venue
- Concert venue and legendary cowboy bar, Old Saloon
- Fishing access to Yellowstone River
- Several other restaurants, wedding venues, and outdoor guide services
I have a lease agreement in place at the general store with a tenant who will be running a trading outpost (art, gifts, beer & wine). While this building is on my radar for a future phase, it will be handled last, after the eight cabins. Tenant is comfortable with the building as-is, but it will need renovations if it will succeed.
WHAT EXACTLY ARE FUNDS NEEDED FOR?
- Phase 1 will be completed this March with the final milestone being log cabin #3. Phase 1 also included:
- Renovating home into a duplex
- Building two 2BR/1BA log cabins
- Installing a new well pump and motor in order to accommodate the final number of buildings proposed.
- Phase 2 is what the funding is needed for. The following numbers have all been quoted, and include:
- $70,000 - Two stage septic system capable of handling eight additional cabins. A permit has been drafted by my engineer, which includes locations and exact specifications for not only septic, but water lines, electric lines, road, and propane tanks.
- $30,000 - Run electric lines to all eight cabin location
- $10,000 - Run water lines to all eight cabin locations
- $5,000 - Install underground propane tanks for first two cabins
- $36,000 - Gravel road & driveways.
- $12,000 - Excavation for first two cabins
- $12,000 - Crawl space foundation for first two cabins
- $13,000 - Electric & plumbing finish work and hook-up to cabin
- $140,000 - Price for two 1BR/1BA cabins (18x26') from Mill Canyon Log Homes, the same company who built the three existing cabins. This includes ALL interior finish work. Two cabins is the minimum amount to receive a 5% discount from Mill Canyon, who will provide a better discount if more cabins are purchased at this time.
- While long-term rentals are 2.5-3x less profitable than short term rentals, this rate I've negotiated with Mill Canyon would allow me to rent these cabins at an affordable rate, while still remaining profitable.
- $20,000 - Landscaping; trees along the road, fencing, lighting
- Phase 3 is will be to add six more cabins, a community garden, BBQ area, and renovating the general store. The cost for Phase 3 is not included in the funding request, but to give a picture of the full scope of the final product:
- $420,000 - Cost for six finished cabins
- $48,000 - Excavation for six cabins
- $48,000 - Crawlspace foundation for six cabins
- $12,000 - Greenhouse/community garden
- $60,000 - Renovate general store, updating water/septic lines
THANK YOU
With the right investor, we can provide a much needed service to a beautiful community of individuals. Pray will be a cherished neighborhood where families and couples can walk to the general store to buy a bottle of wine, grab some produce from the community garden, and make dinner in a home they are proud of. Thank you so much for taking the time to read through this, and if you're interested I would love to chat.
-Colin Burke
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