All Forum Posts by: Chase Hoover

@Laleh Omaraie You can definitely find a Wintergreen condo in that range, but keep in mind there is a lot of competition and expensive HOA fees. There are cabins that come available in this price range in areas like Mt Jackson, Luray, Standardsville, etc. They typically need some updating, but this is where you're bound to get your best returns.

When I had a STR PM business, the majority of my new clients found me on Airbnb since my name was on a bunch of local listings that they'd see when doing their market research. Of course, this works after you've already picked up a few listings. Until then, I'd network locally as much as possible. Meet investors with LTRs and talk to them about converting to STRs.

The Shenandoah Valley is where people from NOVA/DMV vacation - many STR friendly areas! Front Royal, Luray, Massanutten, etc.

Reach out to Chloe Phillips at Vesta Management- She's an STR manager in the Front Royal area that actually used to work in the county governement permitting STRs.

Investment Info:

Other commercial investment investment in Luray.

Purchase price: $430,000
Cash invested: $70,000
Sale price: $1,035,000

Four cabins on the Shenandoah River in Luray, VA, each identical 1 bedroom, 1 bathroom, 600sf with a 250sf covered patio. Located near Luray Caverns, Shenandoah National Park, George Washington National Forest, and Shenandoah River Outfitters (fishing, kayaking, tubing adventures).

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

First cabin deal in Virginia. We'd had much success with Airbnbs in south Florida and wanted a project in Virginia. This fell into our lap and it was the perfect value-add opportunity.

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

Facebook post by owner - not on MLS

How did you finance this deal?

Commercial loan

How did you add value to the deal?

Interior remodel of all cabins. New brand, website, marketing strategy.

What was the outcome?

The property far exceeded our projections by grossing $200k in its first full year after launch.

Lessons learned? Challenges?

The Shenandoah Valley is a GREAT place to invest in STR!

Investment Info:

Other commercial investment investment.

22-room motel on Afton Mountain, Virginia converted to an Airbnb-style outdoors lodge with a retail shop, indoor and outdoor event spaces, and an on-site hiking trail. Prime location at the convergence of the Appalachian Trail, Blue Ridge Parkway, Shenandoah National Park, Skyline Drive, Rt. 64, and Rt. 250, right across the street from the Blue Ridge Tunnel trail

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

This run-down motel was known for shady activity and was in serious need of repair. However, it was located in a superb location surrounded by hiking, breweries, wineries, and convenient to major highways.

How did you finance this deal?

1031 from another property, construction loan converting to a commercial loan on the remainder.

How did you add value to the deal?

Full gut remodel interior and exterior. New brand, website, offerings and marketing strategy.

What was the outcome?

Launching late summer / early fall 2022

@David Evans I have piece of commercial land I am trying to sell quickly for well below market value, I just sent you a PM.

Thanks all for the responses.  The cabins are in the Shenandoah Valley of Virginia.  Since there are 4 cabins on the property there really isn't a good way to compare them to other sfh comps in the area, which is why I am leaning towards a more commercial valuation approach.  The river frontage definitely adds tons of value, which I think is reflected in the gross income (income wouldn't be as high if it wasn't waterfront).  I'm thinking a 10% cap would be a fair starting point, which would put it in the $1.5m range.  This also seems to be the general range that many of you calculated as well.  I figure it's always best to start high and work my way down if the market dictates.

I have a river property with 4 cabins we rent on Airbnb. I'm considering selling but am having a hard time finding the right valuation. Since it is a unique property with 4 cabins in a vacation rental destination, I am assuming the best way to value would be a cap rate on NOI, as there are not really sales comps to compare.

The property grosses over $200k/year, nets around $150k, and is totally turn-key, updated, furnished, cleaners in place, etc.  The location is very hot and getting better, only about 2 hours from two major metro areas. 

Vacation rentals are obviously a bit more work and risk from an investment standpoint so I don't want to overvalue the property by using a cap rate comparable to LTRs or other commercial options.  My question is, if you are analyzing a deal like this, what sort of cap rate would you be willing to make a deal on?