Lake Lure? Anything anyone can share about this area of NC?

Question

Hi,

I have the opportunity to purchase a cabin in Lake Lure, NC. Nothing fancy, just a small cabin with may need some repairs. The cabin belongs to an acquaintance who doesn't want it anymore and is giving me the option to purchase it before putting it on the market. Since I'm not familiar with the area, looking for any info that will help me make the decision to purchase or not. (i.e. have RE prices increased in the area, is there room for additional appreciation, how is the STR and LT rental market, any new housing or commercial developments? Any new employers in the area?

Seems to me that it is such a small town that there isn't too much info on the internet. Anything helps! Also looking for an appraiser and someone who can give me a quote for adding AC to the cabin.

Mitch Davidson · Answer

@Sebastian Sogamoso. I would highly recommend you get an agent to do a CMA on it. I'll message you contact info for a friend who's both an agent and an STR investor in and around Lake Lure. He's not acquiring more in the area anymore, due to shifted focus, but still has three 2/2 cabins doing really well.Location: Sounds like it's almost in Hendersonville. I'm happy to look at it further if you want to message me the address.Price: $200,000 is pretty amazing for anything in the region right now. Even an old doublewide. Washer/Dryer: That's easy to add, even if you don't have hookups yet. Basement: If it's unfinished, it might be best to lock it off, use it for storage and cleaning supplies, and only provide access when guests need to use the washer and dryer.Size: 2/2 is enough space for most of the guest traffic there, especially if you can fit in a bunk bed.Well water: It's super common here. Don't sweat it. I would get a water quality test though, included in your home inspection. And if the home is on septic, get that inspected too.Fully furnished: Most of the time that means you've a few things worth using, perhaps bed frames and such, but still a ton to replace. What's good enough for a second home is often not attractive or special enough for STR, despite what we see in many STR listings. Lending: You bet. I can help with conventional, DSCR, etc. Will message you now.

Sebastian Sovero · Answer

Hey guys, thanks a lot for your responses. I do have a couple follow up questions if you don't mind.

My situation is the following, I am not familiar with the area and the reason why I came across this potential deal is because I've known the owner for some time and she mentioned she wanted to sell it. On Zillow, the home is appraised for about $350K, however based on my conversations with the owner, there are a few pain points which I'm sure Zillow doesn't consider in its "Zestimate". 1) The home has no central A/C. The owner never bothered since they were only there during the times of the year when they felt it wasn't needed. 2) There is no washer and dryer, 3) the home is a 2 bed 2 bath plus a basement, which the basement needs some paint on the walls and new carpet, but not much. The home itself is about 1,000 sqft w/o the basement. 4) the owner hasn't been to the house in about a year, so I'm afraid I may need to do some cleaning and repairs if any. The house has well water. Home would be sold fully furnished.

With all that being said, the owner wants $200K for it. @Mitch Davidson regarding your comment on distance from Chimney Rock its about 18 - 20 mins west of it driving, about 8 miles. All that being said, I don't want to dump a whole bunch of money adding A/C, W&D and maybe even a hot tub as you mentioned for a STR that's going to cashflow very little (after property management since I'm in Florida) and stay empty some time of the year.

Thoughts? Also @Mitch Davidson I see you're a lender? Thoughts on doing this as an investment property loan?

Mitch Davidson · Answer

@Sebastian Sogamoso, I was about to say much of what @JD Martin said above. It's one of our best STR markets when you study it. I almost bought there myself a few years ago. There are many second homes there, meaning homes where the owners are content with a crummy PM making them a little bit of STR money in their absence, so it can be a challenge to weed those comps out of your study. I also don't think the appreciation opportunity is as great as communities a little closer to Asheville. Friends of mine do really well with cabins in the woods there, and stay pretty booked in the winter (for low rates of course), but they've had the homes listed for years. Meaning it takes a while to get the momentum going. And you have to work hard at making the home a destination in and of itself (ex: hot tub, outdoor lighting, heat umbrella, fire pit with wood, grill, sauna, games, arcades, books, great cookware, etc.). Also, properties on the lake cost 3-4x per SF and have a major downside for Dec 1 - April 1 or so: they see a giant mud bowl out the window because the lake is drained. You won't have that problem with a cabin in the woods. Final thought. I wouldn't buy anything that's more than 15 minutes from the Chimney Rock strip or otherwise the public beach. The drive down from the norther parts of Lake Lure, for example, is a long, slow, twisty pain in the neck. Your guests will hate it. And they'll have no cell signal or gas stations while they drive it, which can be another problem.

JD Martin · Answer

I live close by. Lake Lure is pretty popular in the summer & fall. It's dead in the winter and spring's not a ton better. There's no employers in the area as it's just a vacation destination. Driving time to Asheville with traffic is about an hour. There's virtually no housing or commercial developments, but there's some pretty expensive houses there especially right on the water. There's essentially no LTR market as it's in the middle of nowhere and the town is pretty picky about keeping property values up so you don't have a bunch of trailer parks or apartments.

If you're getting it cheap enough it could be a worthwhile investment. It's a pretty lake, not very big and created by a dam, but it stay full most of the time versus a lot of other lakes down here that the TVA lower pretty far in the winter & spring to contain flooding. The town owns the lake, so they get a little more leeway there and people who own $4 million homes don't want to see mud flats, so the lake stays full most of the time.