All Forum Posts by: Chris Harjes

Check with Joshua at Nantahala Bank.  He's financed my last 12 projects, including 5 construction-to-perm loans. He's amazingly good to work with. 

All good information, and it's great to have more lending options for these projects, since some lenders are shy about them. But it's also worth knowing that Asheville proper has illegalized vacation rentals almost entirely, and Buncombe County looks poised to follow suit within the next month or two, possibly as soon as two weeks from now.   :(

Blake Long is excellent for closings and general light legal work (evictions and minor land use/border issues.) Mitch is right- they're highly specialized, so you may need someone else for heavier work or high conflict.  

Joshua Owens at Nantahala Bank is amazing to work with. I've financed maybe 12 properties with them, many STRs, and some with oddities that other lenders would shy away from. 

They don't do hard money loans, but Alfie does and is well-reputed. Message me for other options if you like. 

BP won't let me share it for some reason, but he's with Smith and SHins in Taylors SC.  He's very familiar with NC tax law and serves quite a few clients in the WNC area. 

Brandon Smith is Da Bomb. My effective tax rate for the past 2 years has been under 10%, in the setting of significant real estate income, and much higher 1099 income. He's a freaking wizard. 

Thanks Ryan!  A bit tough to sift through, and not much actual information on the law itself, but it looks like it may be far less definitive and immediate than I thought. I guess we'll have to keep a close eye on how the courts interpret things moving forward?

Asheville is tough these days since so many new players are entering the market.  We've seen about a 30% drop in income this year vs last year, somewhat due to the rebound into hotels and international travel after Covid, but some likely representing the results of everyone and their brother and their uncle Bob starting new vacay rentals in Asheville. Rising interest rates are also putting a tight squeeze on cash flow. 

There's also a bill passed by the NC house and stalled in the Senate which may move soon, which would stop Asheville city from regulating STRs. This would be a boon for owners in the city, but would suck the life out of the "near asheville" rental market. AVL and Wilmington will aggressively fight it in court, so it may take some time to take effect. 

So in summary, they're still profitable at the moment, but I'm oised to sell off a few in the coming years, if retail prices hold up. 

Spot on reply by Ryan Howell- it's a balance, with a lot to consider. Also be sure to look at how much work maintaining and renting the property will be – many places that don't cash flow well are the same ones that end up being super easy to find tenants for, and a low drain on management bandwidth, which becomes more relevant as your portfolio grows.

I'd also consider whether or not you need the cash flow. If you're in a position to keep working your regular job or do flips, then buying property primarily for long-term market gain is a great idea in my opinion. However if you need the short-term stability, or just as importantly if your lender believe that you need it to keep acquiring more properties, then you'll need to move more in the cash flow direction.

I also agree that, at the moment, there is considerable downside risk of market drop preceding any expected market gain, so decisions based on long-term market gain could end up being painful over the next few years before they become beneficial. However, I've been thinking the same thing for about four years now, and keep getting proven wrong- so the market may continue to rise despite so many signals to the contrary.

Absolutely. A full opening of Asheville for short-term rentals would completely destroy the basis of my income, with my portfolio being carefully built over the past seven years to maximize returns outside of city limits. These returns could be erased by an enormous surge in supply within the city itself. This action would also indirectly raise retail prices at the same time, which would allow me to sell off my portfolio and invest in something else. But I do like real estate, and I hope that I'll be able to continue owning these houses into the future. I'm on pause for any additional investing until this issue settles out or becomes clearer on either side.