All Forum Posts by: Corbin Loveless

@Ryan Lloyd are you viewing the unlocked market in Air DNA? I'm able to pull revenue numbers by percentile and bedroom back to 1/1/2018 for my market...

Borrowing @Matthew Ringer's line from above- everything cash flows when you pay cash...

One of the opportunities that I see in the current market is cashing out on a portfolio that's appreciated massively over the past few years and reinvesting with cash. If you have a portfolio of rentals, odds are likely you have equity. Using a 1031 and paying cash for some bulletproof investments is a great way to hedge inflation/potential recession and still be "in the market" IMO. 

Jeff! I'm sure you've heard the saying, "some of the best deals you make are properties that you don't buy." As a word of encouragement, it sounds like you and your wife are killing it in REI so far, and I would encourage you to view those losing offers as properties that did not meet your criteria. Those are good decisions IMO, and I sleep like a baby when I lose out on offers...it just means someone else had lower standards for their investing criteria (which many can afford to have and not to say anything negative about those folks).

As the (supposed/predicted) recession heads our way, it will be great to have cash on hand for security/rainy days. I don't know for certain what this year holds for the RE market, but you and your wife may find deals as the market changes head our way. My advice would be to sit tight, take a breath, and use the losing offers as a sign from the universe that waiting may be the best thing for that RE portfolio in the long run! Have a good weekend!

What was the impact of Covid in the Smokies? (biggerpockets.com)

 Thank you, sir!

Sorry guys...the forum got my post out there before I added the data. 

That said, @Luke Carl and @John Underwood and @Collin Hays are the folks that I was hoping would offer their opinion. Appreciate your input and advice!

1. I'm not a data scientist or statistician. 

2. These numbers are my opinion and have been compiled from Air DNA. I don't believe Air DNA is a perfect data source, and I believe you can find inconsistencies depending on when the data is pulled and lagging inputs.

That said, I thought it would be interesting to add some data to all the discussions around 2022 STR demand in the Smoky Mountains.

While park data from the NPS is not yet available for 2022- I've pasted the # of visits to GSMNP below for those keeping track. 

NPS: 

2018- 11,421,200

2019- 12,547,743 (10% growth y/y)

2020- 12,095,720 (-4% growth y/y)

2021- 14,161,548 (17% growth y/y)

2022- TBD

Source: irma.nps.gov/STATS

While It looks like there's some credence to the discussions of reduced rental demand, it doesn't appear to be significant (3%-7% depending on the number of bedrooms). I agree that 2021 demand was not sustainable, but I don't think the data paints a bleak picture of the Smoky Mtn rental market.  In my opinion, these numbers show the overall impact of the pandemic on tourism in this area was significantly positive (2019 vs. 2022).

This data strengthens my take on the Smokies and recommendations to my clients as a Realtor. 1. The Smoky Mtns are hard to beat for STR rental demand. 2. Choose your property wisely. Base your investment decisions on the property, not the average. 3. Tether yourself to longstanding investment criteria and consider all four wealth-building strategies in your investing (appreciation, cash flow, loan pay down, tax benefits).

Not everyone has to contend with the 8% interest rate. A lot of folks are taking advantage of the recent historic appreciation levels, cashing out, and rolling into new investments.   

Example Scenario: Investors that sold their rental in California use a 1031 and are looking for high-income generating properties and have to spend cash. Very few markets in the country compete with the Income/purchase price ratio of the Smokies, even today. 

I find that if the rent/purchase price isn't ~14%+, the numbers aren't going to pencil out for the folks that plan to finance with today's rates (12/22). 

Just IMO.

Unfortunately, this happens in the Smokies...

To all the investors out there- Use Air DNA, drill down to the property level to find comps, make sure you're tethering yourself to data (multiple objective sources!), and verify opinions. Your agent should never guarantee returns. They should be providing objective data. Also, find an agent that's actually investing in your market. Ask them to share their story and their experience so that you have a point of reference. They should: 1. Be a subject matter expert in the areas of experience/knowledge you lack 2. Be successful in doing what you're interested in doing. 3. Be willing to show you the ropes. 

Great points. I think the key takeaway here is thinking long-term. STR will become less popular as interest rates have risen to 50-year averages (7ish percent). Maybe this will mitigate the saturation and keep margins strong for all the folks that got in early. IDK, we'll see.