All Forum Posts by: Avery Carl

@Account Closed has questions about.  None of these issues are un-solvable and there are likely some simple answers for navigating this new venture for us, and there are MANY investors on this forum who have dozens or hundreds of doors who deal with lower income tenants all the time.  Those are the folks whose answers we are interested in hearing. What is "sad" about that?

@Rodney Morris I would not bother with the meth house.  There are plenty of available properties that won't require that kind of remediation!  I'd also make sure that you're looking at something that will be attractive to renters.  There aren't very many (with some exceptions) short-term-rentable properties that are being used for long term rentals that would be affordable for the meth-cooking crowd.  I can take a look at it if you want.

As far as R-1, not everything close to downtown is zone R-1 one, but it's definitely something to pay close attention to when you are looking right off the strip in Pigeon Forge or Gatlinburg.

@Chris Watson I think you pretty much nailed it on the A, B, C concept!

@Nicholas Moran 100%!

A few years ago it was possible to buy undervalued properties in this area. But now, short term rental investors moving in from areas like Nashville, New York, and other large cities where short term rental laws have tightened and inhibited their ability to scale, have discovered the Smokies and their excelling COC return. Demand is high and supply is low, not seeing more than a 5% discount from purchase price, with a few exceptions.

Just to add to what @Chuck Kramer said, as I think he mentioned he is buying larger properties.  For the 2-3 bedroom properties (and sometimes the larger ones, depends on how turn-key they are), especially the ones that are new to the market, it's taking at asking price and sometimes over (if there are multiple offers) to snag them.  If the property has been sitting on the market for a few weeks there is more room to negotiate, but most of the time we aren't seeing properties go for more than a 5% discount from purchase price.  Of course, there are exceptions, but when you are running your numbers make sure you take that into account. The smaller/lower asking price the property, the less leeway I have been seeing sellers give on purchase price.

@Tim Schroeder also gives great advice to not get too caught up in purchase price and monthly net profit, but overall COC return.

Lol the Thunder Crapper and I do have plenty of self management contacts we are happy to share @Ray Thorsen.  To @Jeff Piscioniere's point, yes there has been a ton of appreciation in the area. I don't see it cooling off anytime soon. The trend that I am seeing, especially with the clients that come to me, is that short-term rental investors who have previously invested in other cities such as Nashville, Austin, and NYC (where short term rental laws have become much more strict, some even outlawing STR's altogether) are beginning to discover the Smokies. These investors who are accustomed to STR cash flow are looking for markets where they can move their money where legislation against STR's will likely never happen. The economy in this area has been dependent on STR's for decades, so any strict legislation on STR's would be detrimental to the local economy. And compared to the Austins and New Yorks, real estate is still really cheap here. Hope that gives you some insight!

@Ray Thorsen sent you a PM!

Thank you for the shoutout @Chuck Kramer!  @Ray Thorsen  everything Chuck mentioned is spot on.  To add to what he said, you actually do not have to have granite counter tops, etc.  Rustic is chic out here, and granite upgrades and stainless appliances are value I prefer to add myself later rather than pay a premium for it up front.  While it is not necessary to have a view to make some serious cash on cash return, it's definitely a huge bonus.  You can fix up a cabin, but the view is either there or it isn't. So if you happen upon a property that has a fantastic view but needs some fixes, I would seriously consider buying it.  I am slammed but I can always take the time to chat and show investment cabins to other BP'ers!

@William Denniston prices are only going to continue to go up. With all of the short term rental regulations being imposed in major cities, tons of short term rental investors are now looking to move their money to markets such as Gatlinburg/Pigeon Forge where the economy depends on short term rentals, and there is a minuscule chance of regulations on STR's tightening, which is continuing to drive the prices up.

Also, one thing to remember in a competitive market: if the cash-flow numbers work at full price, it's still a good deal. It's important to pay attention to ROI and not get caught up in what price someone else paid for a property, or how much the property cost 10 years ago. Prices may take a dip here and there, but they are not going to go down significantly anytime soon. Obviously, we all want the best deal we can get, but waiting around for another crash that may or may not happen is cash flowing you zero dollars.