Couple Defies Odds: Buys Vacant 20-Unit Airbnb and Outperforms Owner’s Best Year
~Vacation rental building survives using direct bookings and the couple’s secret formula…
Deerfield Beach, FL – “We moved in late on a summer night. We rushed home from Delray to Fort Lauderdale after the closing that day to quickly pick up our cat and pack a few bags to stay over for at least the next month, knowing it was an empty building. — afraid it’d become a target if it look abandoned, which it was. We didn’t own a gun or even a bat, but we were ready to protect it…
We arrived around midnight to our new 20 unit vacation rental building and there were absolutely no cars in the driveway but ours. It was so hot that humidity covered all the apartment windows and as my wife and I dragged our heavy luggage and cat up the two floors to our new apartment door, it just felt eerie. You’re in this large 10,000 sqft building overlooking a beautiful courtyard pool, one block away from the beach and you’re all alone — it’s just dead quiet. It felt like you arrived a day early for a destination wedding and you’re waiting for all your friends and family to show up… but knowing that nobody would show up. It was just us. And we had to fill up the whole place quickly or we’d likely lose the building before end of the year”, said Marco Cepeda.
On June 24, 2022, Marco and Danielle Cepeda became the new owners of Beach Walk on Deerfield Beach Island. The seller only agreed to their purchase offer because they verbally agreed to work with their in-place manager, but three weeks before the closing, they looked at the live calendar online and it averaged 5-10% occupancy. Deerfield Beach Island is a seasonal town and with the busy season over, the economic pull back was in full swing.
They had no choice. They took over the management directly.
Only one guest was booked on the closing date and the manager took the remaining two reservations to other properties. They had to borrow hundreds of thousands in hard money to get the deal done and the NY building they had planned to sell in order to pay it back — as they learned just before the closing — was now no longer an option.
They cancelled all their vacation plans, quickly packed up what they could and moved from their home into the new property.
For two months they lived and worked at the new Pier Walk during all their waking hours, starting everything from scratch. Often cleaning the units before each reservation, stocking, staging, inspecting linens, dropping off and picking up laundry, putting them into sets, and sorting through hundreds and hundreds of pounds of stained laundry that that they inherited from the closing that was beyond repair. Then after each long day of fighting heat exhaustion, they talked at length over their homemade cocktails about what the business needed to survive one more day.
Many people would dream about living in a beautiful resort-style vacation rental property so close to the beach, with gorgeous sunsets filtering though the kitchen window blinds every single evening. But it was a jarring juxtaposition for them - paired with the overwhelming financial stress and the sheer exhaustion of living at work, it was more akin to a private nightmare.
During the summer they had no choice but to fill the building with below market, last minute discounts. It was a constant battle between trying to hold higher rates or to hold higher occupancy. But never both — they chose occupancy.
But once they reached mid August, snowbirds began booking at market rates and occasionally, above market rates. The best part? They were direct bookings. That meant that unlike Airbnb, which only pays the day after arrivals, 50% was being paid upfront. They were pulling income forward from the busy season which helped them greatly.
They attribute having a direct booking website through Ownerrez as one of the main keys to their survival. Based on financials of the previous owner, the breakdown in their 2021 bookings was split 75% from Airbnb and 25% from VRBO. For 2022 the new Pier Walk reported 33% in direct bookings and in 2023, over 55% of their bookings were direct from their website for the first quarter.
Knowing they’d make interior improvements soon, they used their pixel and iPhone cameras to take photos and videos instead of professional cameras which would serve as interim photos until they finalized key improvements. But as Pier Walk gained occupancy and after several failed attempts to hire a good team, professional photography would have to wait. To their surprise, the video phone tours proved extremely popular with snowbirds looking to book for a month by the beach. And maybe counterintuitively, using their camera phones worked better in a way.
“While most listings now have very sleek professional photography, ours is just a cleaned up photo from our phones. They’re not unflattering photos that seem careless or blurry. But phones these days have very high powered cameras. So in a way I think it helped build more trust and authenticity with some guests. They know they aren’t seeing super processed, sleek photos. The property rarely looks so glossy in real life anyway. Seeing it through a less filtered lens can set a more realistic expectation and as long as you do a good job with the space, design and staging in real life then the photos and videos are accurate and guests are happy with that,” said Marco.
As one of the first extended stay guests at Pier Walk, Marco and Danielle gained an intimate knowledge of the property and could quickly decision key improvements like sound proofing the two largest apartments that were only separated by air and sheetrock, heating the pool, adding sofa beds to all the one bedrooms, replacing washers that were staining clothes, making the laundry available 24/7, and installing cameras over the driveway.
Tammy - the only guest staying when they took over - told them about lots of confusion with deliveries and guests who couldn’t find the property… they found the building address number was hiding behind overgrown hedges. So they cut it back and it revealed the perfect wall where they installed the new Pier Walk sign and mural. Next to that they installed a QR sign so passersby could point their camera to it from South Ocean Drive and they’d be automatically directed to their website.
Pier Walk was officially on the map.
With each booking they include an online guidebook that shares their best recommendations so guests can walk to all their daily errands or shops and restaurants and, “live like a local”. It includes grocery stores, bike rental shops, spas, restaurants, beach chair and cabana rental stands, nature parks and of course the local international pier, which is they're namesake.
“I believe every property has gold in their own backyard," explains Marco Cepeda. “You just have to do enough leg work to find the nearest and most convenient places where guests can go to meet their daily errands and experience the local flavor. That’s why they book with you instead of a hotel. When you go to a hotel, you could wake up anywhere in the world and you wouldn’t know where you are. Because it’s often not connected to the local community or experience in any meaningful way. That’s where vacation rentals can truly offer something unique and memorable that a typical hotel won’t.”
And finally, they used their best kept secret weapon: their extended-stay formula.
The way they see it, they’d rather get $4,000 from one guest paying a lower nightly rate for the entire month, then to get $4,000 from six or seven different guests that are paying a higher nightly rate with several gaps days for the same month. So their discount curve increases over time. Not only are more people working from home during vacation, an extended stay lowers the frequency of cleanings, which leads to less management and less costs in laundry. And most importantly, the demand for extended stays is high.
The new Pier Walk has already exceeded the 2022 winter bookings performance. And the fact that they surpassed the highest month of the previous owner is living proof that their extended stay formula really works.
Marco and Danielle own DMC Property Pro which is the management company for all family properties, some of which they have also turned around, just like they did for Pier Walk. The couple is working on several other exciting plans for Pier Walk that will connect art, food and travel together in Deerfield Beach in ways they believe hasn’t been seen before.
Today, many Airbnb owners and operators are getting out of the business, even during the winter months which are typically the best time for vacation rentals in South Florida. Occupancy has dropped off the map and rates are many times either down or about the same. On Airbnb Facebook groups, you can see posts from hosts selling all their furniture and every other week a host is asking, “Are you struggling with bookings too?”.
This has led Marco and Danielle to consider managing and cleaning for other owners, under DMC Property Pro. Having built a strong team for their properties they see opportunity in applying the same ideas and framework for other vacation rentals. And having a great cleaning team is the backbone of any vacation rental business.
After all, if they can start with an empty building and defy all the odds with today’s market, then there’s no reason they can’t do it again.
Nightly rates start as low as $89/night this summer and can be booked online at Pier Walk on Deerfield Beach. It’s located one block from the beach and every booking comes with an online guidebook with tips and recommendations to the nearest and best restaurants, activities and services, so all guests can, “live like a local”.
For further information check out http://www.pierwalkdeerfieldbeach.com or contact Danielle or Marco Cepeda at CONTACT@PIERWALKDEERFIELDBEACH.COM.