All Forum Posts by: Justin Beasley

Just completed a similar process. There are some advantages to this strategy but it is also very risky. 

Here is what I see as the advantages...

1. You have closing cost on the HELOC but no down payment as you can take a maximum of 75% of the appraised value.

2. You only have to make the interest payments if you desire and can maximize cashflow or limit your cash out of pocket while completing renovations. 

My personal experience and advice is to use the HELOC to purchase a value add property as a "cash" buyer. Immediately add the value through a renovation. Once reno is complete cash out refinance or sell the property and collect the profit.

I use my HELOC to move fast on deals I KNOW I can make money on and like to have options for how I could hold or liquidate that property.

Echo the guys above. Really like Hospitable. Also, Hostfully offers a nice digital guidebook. 

Proper Insurance would be an option for you.

Is Meridian a vacation town? If it is great. If not, I would spend what money I had getting int ones of those markets, make more money, and rent a place to stay when I wanted to visit family. 

Focus in on a few markets. AirDNA is more accurate in some places than others. Hit the "find an agent" button and get connected with someone in your primary areas that can help you make a solid purchase.

Be patient, know your numbers, don't operate out of fear, have fun!

This is great advice! We have been using Proper Insurance for STRs. Do you know how Southpoint and Proper compare on pricing?

@Josh M. I would look towards Blue Ridge/Ellijay with that budget. There are also certain condo areas in Gburg/PF that perform well that you can get for sub-400.

The more data points a system like Airdna has the more accurate it is. Even then you should always verify/adjust the numbers based on your own research. 

Also, every STR market has different historical occupancy rates. For instance, in Pigeon Forge prior to 2020 the average occupancy rate was around 70ish percent. The average occupancy rate over the past 2 years is above 80% and there is little reason to think this will go down in the foreseeable future.

Gatlinburg is about as safe as it gets. There will certainly be future zoning changes in the smokies(some have already take place) but any future changes will grandfather in current rentals. Also, the Gburg/PF economy is built around short term rentals so even future regulations are not going to be designed to prohibit that industry.

Future regulations in the smokies are likely to address things to help protect the land & environment. So purchase confidently and go make some money!