Analyzing properties in Gatlinburg/Pigeon Forge.

[Guy Mulanax]

I am currently working on a cash out refi on one of my rental properties, and I'm looking to use the money to get in to short term rentals. Everyone seems to have nothing but good things to say about Gatlinburg/Pigeon Forge market. But I have been using Luke Carl's enemy method researching properties on Airbnb and Vrbo and having a hard time finding deals that make sense. I don't know if I'm making a rookie mistake analyzing these properties or maybe there's just not any that will cash flow to be found on the MLS. Is anyone else running into this problem?

[Collin H.]

what kind of deals "make sense"?

[Paul Sandhu]

Try Wynnewood Oklahoma.  The refinery there is converting their hydrocracker for renewable diesel sources.  It's a $110,000,000 project.  If it is successful, they are going to do it in my town on a larger scale.  The contractors doing the work need a place to sleep, cook and do laundry.

[Kyle Parks]

I just found Luke Carls' enemy method. Its pretty solid imo. 

with that said - I would assume the issue would have something to do with rising home prices, and STR rates not pacing the market.

For example - I bought my double for 110k 5 years ago. Renovated and started STR (self manage) a year ago. A home down the street sold for 235k last year, they hired a PM. we went all out and spared no expense. To make their numbers work they had to buy cheaper furnishings.

fast forward 9 months. We are at 100% occupancy on both units. They are at 35% or so. They simply cannot compete with us. They have to charge more for an inferior product. 

Try using a tool like AIRDNA. 

[Julius Chinn]

One of my pet peeves with NEWBIES.   They dont trust their due diligence......hahahaha.

I like to think i know what im doing and the numbers dont pencil out for me EITHER.

I can tell you with high probability $500,000 properties dont generate near enough income to be worthwhile.  This is ANYWHERE on the planet. This same property bought years ago could be a golden cash cow for that astute investor.   Price matters.

[Justin Anderson]

I see properties daily that will work out great.  Of course the market has inflated, but they still can cash flow really well.  In fact, I just closed on one earlier this month and it's already in the green.

You just can't fall into the hype and overpay.  Be smart.

[Justin Anderson]

Originally posted by @Julius Chinn:

I can tell you with high probability $500,000 properties dont generate near enough income to be worthwhile.  This is ANYWHERE on the planet. This same property bought years ago could be a golden cash cow for that astute investor.   Price matters.

You should probably qualify that a bit more.  My first cabin was 7BR and just under 800k.  I expect i'll average 8-10k cash flow after mortgage and expenses.  In other words, it could be 1.5M+ and still cash flow.  My 300k 1BRs cash flow over 1k/month after all expenses.

[Julius Chinn]

Example of $300,000 bringing in $1,000 a month is 4%---not impressive.  I know condos selling for under $200,000 bring in $750.  

Churning $65,000 option account i made $10,000 since oct 5.  Cash sec puts and covered call.  So much fun.  No dealing with tenants and guests.  Not that i ever have i use propety managers.

When did you buy your Cabin?

[Julius Chinn]

Originally posted by @Justin Anderson:

I see properties daily that will work out great.  Of course the market has inflated, but they still can cash flow really well.  In fact, I just closed on one earlier this month and it's already in the green.

You just can't fall into the hype and overpay.  Be smart.

 Give numbers.  Dont worry im not a competitor. So much hype on Pigeon Forge id think its been picked clean already.

[Ryan Moyer]

Originally posted by @Julius Chinn:

Example of $300,000 bringing in $1,000 a month is 4%---not impressive.  I know condos selling for under $200,000 bring in $750.  

Churning $65,000 option account i made $10,000 since oct 5.  Cash sec puts and covered call.  So much fun.  No dealing with tenants and guests.  Not that i ever have i use propety managers.

You could have made exactly $10,000 on a $65,000 account since the beginning of October by just buying the SP500 for even less work than selling options.

Blind monkeys throwing darts have done more than 15% return in the market since October.  I would be careful trying to compare market returns during one of the greatest several month bull runs in history to proven long term real estate returns.  No offense or anything just a word of warning to be careful.  These last few months in the market are the easiest it's ever been.  It's not going to stay that way.

[Julius Chinn]

You are probably right.   My way more fun though.  Plus my first month i traded very tiny money amounts.   Most were one contracts bringing in $30 premium.  We shall see if im better than Blind Monkeys.......................lol.

Point 2.  Im not wheeling and dealing MEME stocks.  My biggest winner was Citigroup.  Theta and Volatility is my friend.   Could be yours too.

[Joe C.]

If only there was a forum where people wanted to hear about trading S&P500 options instead of short term and vacation rental properties...

[Justin Anderson]

Originally posted by @Julius Chinn:

Example of $300,000 bringing in $1,000 a month is 4%---not impressive.  I know condos selling for under $200,000 bring in $750.  

Churning $65,000 option account i made $10,000 since oct 5.  Cash sec puts and covered call.  So much fun.  No dealing with tenants and guests.  Not that i ever have i use propety managers.

When did you buy your Cabin?

I've started buying my cabins from a few years ago to one at the start of 2020 and one this month.

Most real estate investors look at the amount they invested to get a particular return.  We dont pay 300k cash to get a 4% return.  Instead we pay 60k down (or less) which would be a 20% cash on cash return.  And then you get all the benefits that real estate gives - appreciation, depreciation write off, 1031 ability, etc.

I also have made and lost tons in options trading this year.  But that's pretty irrelevant to whether or not you can make money in this area in real estate.  You may want to check out wallstreetbets for tips and tricks on that.

[Collin H.]

Originally posted by @Julius Chinn:

You are probably right.   My way more fun though.  Plus my first month i traded very tiny money amounts.   Most were one contracts bringing in $30 premium.  We shall see if im better than Blind Monkeys.......................lol.

Point 2.  Im not wheeling and dealing MEME stocks.  My biggest winner was Citigroup.  Theta and Volatility is my friend.   Could be yours too.

Moron Poster of the year.  

[Julius Chinn]

Why cant Real Estate and Stock guys get along?   Not yet against the law to do both.

[Guy Mulanax]

Originally posted by @Paul Sandhu:

Try Wynnewood Oklahoma.  The refinery there is converting their hydrocracker for renewable diesel sources.  It's a $110,000,000 project.  If it is successful, they are going to do it in my town on a larger scale.  The contractors doing the work need a place to sleep, cook and do laundry.

Thanks I’ll look into that. I noticed that we are neighbors I’m from Baxter Springs, KS

[Guy Mulanax]

Originally posted by @Kyle Parks:

I just found Luke Carls' enemy method. Its pretty solid imo. 

with that said - I would assume the issue would have something to do with rising home prices, and STR rates not pacing the market.

For example - I bought my double for 110k 5 years ago. Renovated and started STR (self manage) a year ago. A home down the street sold for 235k last year, they hired a PM. we went all out and spared no expense. To make their numbers work they had to buy cheaper furnishings.

fast forward 9 months. We are at 100% occupancy on both units. They are at 35% or so. They simply cannot compete with us. They have to charge more for an inferior product. 

Try using a tool like AIRDNA. 

 Thanks for the advice. I think his enemy method is spot on but I’ll try Airdna. Maybe I need to look in a little larger cabins.

[Collin H.]

Originally posted by @Julius Chinn:

Why cant Real Estate and Stock guys get along?   Not yet against the law to do both.

Who says we aren't doing both? Or 5 or 6 different things? You missed the point: This isn't a forum for stock and option strategy. Go to that forum. Come back to this one for STR discussion.

[Paul Sandhu]

Originally posted by @Guy Mulanax:

Originally posted by @Paul Sandhu:

Try Wynnewood Oklahoma.  The refinery there is converting their hydrocracker for renewable diesel sources.  It's a $110,000,000 project.  If it is successful, they are going to do it in my town on a larger scale.  The contractors doing the work need a place to sleep, cook and do laundry.

Thanks I’ll look into that. I noticed that we are neighbors I’m from Baxter Springs, KS

Coffeyville here.

[Samara Huntley]

Just researched Luke Carls Enemy method, seems like a proven way to analyze STR. I can understand that the pigeon forge/gatlinburg market is blowing up, however, the prices have not inflated to a point that STR's are no longer working.Yet. I have analyzed multiple STR in that specific area out of my interest in the market and a large portion of them have come up with great results. I suggest you keep digging, it's a fantastic market. I use AIRDNA to get my data to analyze short term rentals. It shows the average occupancy, daily rate and average revenue for FREE. if you get a membership, it gives you even more specific data like seasonality, revenue growth etc. per the specific zip code you're buying in. Check it out and good luck, Guy!

[Julius Chinn]

Originally posted by @Paul Sandhu:

Originally posted by @Guy Mulanax:

Originally posted by @Paul Sandhu:

Try Wynnewood Oklahoma.  The refinery there is converting their hydrocracker for renewable diesel sources.  It's a $110,000,000 project.  If it is successful, they are going to do it in my town on a larger scale.  The contractors doing the work need a place to sleep, cook and do laundry.

Thanks I’ll look into that. I noticed that we are neighbors I’m from Baxter Springs, KS

Coffeyville here.

I love Coffeyville. 

[Anthony Hofgren]

@Guy Mulanax use the short term shop’s real estate team. They will help you run the numbers.

[Brian G.]

@Guy Mulanax there is a reason that properties are still flying off the shelf in that market, ie pretty much every deal has multiple offers and is under contract within a few days of being listed. You have to know what the gross revenue potential is on any deal so you can underwrite properly. You need to work with a local realtor that can help you. Sure, many ppl overpay and the market is red hot so be careful. I’m under contract right now and I wouldn’t be buying unless I knew for certain I’m going to profit.

[Luke Carl]

@Guy Mulanax

Thanks for all the enemy method shout outs everyone!!!

I’m closing 1.3 million in sevier county this month. The numbers work for me big time! These will be my last two single families for a while.

[Thomas Ackley]

I've been investing in Wisconsin for a few years. There are opportunities here, but I am all in on the PF market right now. 

My partners and I are under contract for 3 properties in the PF area with the STS for 2021. I overanalyze the hell out of markets and properties. I am all in on building my portfolio, for the time being, in the PF market. I have one STR in what I think is the best vacation spot in WI for a STR and each PF house will be almost twice the purchase price. I am confident each PF cabin will provide better numbers, in terms of the COC / ROI, etc, than my WI STR. I am very happy with my WI STR, btw.

That being said, what @Paul Sandhu said about Wynnewood, OK is a golden ticket. If one were to look into that project and be sure its going to happen, copying Paul's business model in Wynnewood would be an amazing opportunity. That sounds like the type of idea that a few people think about and 3 people actually do. If that plan goes through, there will be so much demand for that model. You could scale that pretty quickly. I know nothing about that project besides what Paul said and that you can buy single family houses for under $100k there. 

There is obviously a large gap, in this thread alone, with opinions regarding PF specifically, as well as other general topics. Figure out what type of portfolio you think you want, learn how to analyze markets, models and then specific properties. If you find a model you like, copy the success of someone that will talk to you.

[Jacob Ayers]

I would reach out to Avery Carl. She has a lot of STR experience in that region.