Smoky Mountains Vacation Rentals!!!!!! Yes, Please!

[Eva Dees]

Greetings BPeeers! I finally know what I want to be when I grow up! This was a tough one for me and it's taken almost a year of digging down deep but I've finally nailed down a strategy that I am super excited about...vacation rentals!  I have come back to this as a potential strategy so many times and after listening to podcast #364 twice, I am sold. Seal the envelope, this is happening! Thank you Avery Carl for that awesome insight (and I'm sorry/not sorry I am going to try and copy your success). I have always loved the Smoky Mountains and have had a side eye on Tennessee as a potential state to invest in for a while .

I digress. The first part of last year I was desperately trying to purchase a small multifamily as my first RE investment. I must have walked 15 different ones and tried to write offers on a handful with no luck. By summer I had saved up a good chunk of money and taken out a personal line of credit at my bank. At the suggestion of other very helpful local investors, I decided to attend the judicial tax sale in my county. These properties are being sold for cash, "free and clear" (no liens, etc..) for sometimes extremely low prices. Granted, you can not go inside them and you are only to drive past them and decide if you want to bid on them. It's kind of terrifying and exhilarating. So I spent the weeks leading up to the sale driving around my county after work and crossing houses off the extensive list, or making notes next to the address like "bid high" or "bid low". Low and behold I walked away with 2 properties last July. Almost immediately, I sold one of them under article of agreement because after I had it inspected, I quickly realized it would cost way more to fix than it would ever be worth in the next 20 years and the cash flow on it after repair was non existent. I made a profit on that one and I was happy with that. I am currently living in and renovating the second property. I had to pay the tenants of the previous owner to get out and take all their gross stuff with them which was totally worth it. They had been non-paying tenants for 2 years prior to me purchasing the house!! 2 years!!!! After I dump a total of about $25,000 into the rehab and get some tenants in here, I should be able to net about $30,000 on the cash out (after paying my line of credit and my credit cards back that have funded the rehab) and have the property cash flow about $75/month. Not the cash flow numbers I am shooting for but this property is merely a launch pad for my vacation rental investing, a great lesson in rehabbing yourself, and my very first deal!!!

Back to the future...My plan for investing in the GSM is to self manage the properties while keeping my job in Pennsylvania (for now). At first I am looking for turn key but am open to value-add fixers in the future when I know more about the market and contractors. Eventually I would love to relocate to Tennessee (or Texas). I am researching the market and will start diving deep into cleaning arrangements, repair folks, what types of properties bring the biggest return (size, more private vs more crowded cabins, closer to or further from town, hot tubs, views, etc...) 

There are a few reasons I am zeroing in on this strategy. I have a service heart and mind. I worked largely in the service industry for many years and there are so many things I love about interacting with people on that level. I'm good at it. I want to make peoples experience wonderful. And after sitting at a desk the last 2 years straight, doing graphic design, I know that I am much more fulfilled when I am working with people. I also like change. I like talking to different people every day and learning new things. Also, I feel confident that I can pull this off and keep my design job until I can replace my income.

I am pulling together a business plan as I am interested in partnering for the first one or two properties and want to present potential partners with enough clear and accurate data that they can make an informed decision.

For those of you seeing success in this market or for folks that may just know about this market, do you have any advice on things I should add to my business plan other than the usual suspects? And does anyone know how long, assuming I am going to be great at this self-managing thing, it will take to get some traction on Airbnb, VRBO, etc..? Essentially, is there a rough time frame that it will take me to get to 50% occupancy, 60%, 70% or whatever the

average is for well-run, self-managed properties? I don't care so much about that time line as I do about reporting an honest potential-profit statement to a partner that is not familiar with vacation rentals or the GSM market. I'll be talking to different types of potential partners, some have real estate knowledge, and some do not, but I basically just need more capital and I will run the whole thing myself. I want to run the whole thing myself.

One more question and I'll let you guys and gals out of this book: I am planning a weekend in GSM in February and I haven't been there since I was a teenager. I'll be traveling with my vegan sister. Are there any super delicious places to eat that have animal-less options that we absolutely can't miss out on? We will just be driving around most of the time anyway looking at adorable mountain cabins so anywhere from SV to GB to PF and surrounding.

Thank you for reading my book. I appreciate all of you who post and who take the time to read and respond to all of us newbs. Much love.