Analyzing deals in STR

[Owen Thornton]

Hello!

I am looking for advice on my first str, ideally by the end of January I’m attempting to get a deal under contract. I have a partner who is helping mentor me as well, but I would love to hear more from those of you on BP.

I am searching for deals and was wondering what parameters you guys use.

I will be looking for deals in the Smokey mountains, and up towards brevard, ashville, Boone NC.

When analyzing deals what do you look for in terms of

1. How much do you look to pay per bedroom

2. What average occupancy do you look for in an area

3. What is the lowest months occupancy you look for

4. What website or data do you use to figure the above out

5. On market, off market, both?

6. Do you have any recommended calculators

7. For those of you in NC what are your best and worst months in the year. How do you make the worst months work?

8. What sites do you use for calculating and managing properties

9. What other rules do you follow. Any and everything - I am very open to learning what rules and estimates you like to adhere to - of course everything is subjective and is deal by deal” but would love to hear it.

If anybody wants to connect, please let me know. I’d love call any time.

[Justin Beasley]

@Owen Thornton Great questions, and good luck starting your search. 

* There is a lot that goes into the price you pay per bedroom. Currently in the Smokies the best value I have found is a 4 bedroom(or a 3 that sleeps like a 4) between $700,000 and $900,000. I am personally going to be looking in this range come January.

** Current occupancy rates are sky high! North of 90% in a lot of places. I would run numbers towards 80% occupancy. Prior to 2020 the average occupancy in Pigeon Forge and Gatlinburg was 70-75%. I do not think the PF/Gatlinburg area will go back below 80% occupancy as the area has gained so much momentum during COVID.

*** There hasn't been a low month in a long time! Traditionally, the starts of the school semesters bring a little slow down. This has not been the case for the past 2 years. 

**** Lived in Smokies my whole life, and the cities business development pages: https://pigeonforgedevelopment...

Also I do have a proforma that I created for STRs. Feel free to message me and I will send your way!