First STR purchase (Smokies)

[Kevin Luttrell]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $435,000
Cash invested: $62,048

2/1 cabin in Sevierville close to Pigeon Forge and Gatlinburg. $62k total cash invested including closing costs and some updates and furnishings. Trailing 11mo average rent since purchase is about $4,500/mo, but I expect it to be higher in 2022 since we had several long stretches of blocked off dates in the beginning to work on the cabin. After all utilities, subscriptions and monthly expenses, plus 10% set aside for repairs and capex, we're cash flowing about $1,500/mo. 29% CoCROI.

What made you interested in investing in this type of deal?

I had been looking to get into STR investing. This is a true log cabin at the end of a dead-end road with only 1 neighbor within eyesight (not close) and bordering 100+ acres of undeveloped land and national park. Hiking trails a few yards away. These unique features are keeping us fully booked at decent rates even with the recent slowdown.

How did you find this deal and how did you negotiate it?

Found on MLS listed for $425k and offered $10k over. Was able to negotiate a $7k seller credit after inspection.

How did you finance this deal?

Purchased as 2nd home with 10% down.

How did you add value to the deal?

Completed some small renovations and updated some furnishings. Put in new LVP throughout, bought a new hot tub, Washed and stained the deck.

Lessons learned? Challenges?

We were initially going to list with a management company and were almost fully signed up with Evolve, but at my wife's repeated beckoning, we pulled out last minute and decided to try and manage it ourselves. Best decision we could've made - managing ourselves has been far easier than I anticipated and it's way more fun! I learned to listen to my wife more :)