All Forum Posts by: Gerald Pitts
Gerald Pitts has started 11 posts and replied 460 times.
Post: Cabin Purchase in Sevierville, TN
- Lender
- Asheville NC
- Posts 466
- Votes 317
I recommend self managing. With today's tech, it's.very doable. I recommend Short term shop, who can teach you as part of finding you a property!
Post: Goal for returns on STR
- Lender
- Asheville NC
- Posts 466
- Votes 317
I find that 20% or more cash on cash is a good use of my money when analyzing the deal. Usually comes out to more with STR.
Post: Vacation Rental - Is 10% cash on cash too low for first STR?
- Lender
- Asheville NC
- Posts 466
- Votes 317
Congrats!!
Post: Cash out refi short term rental
- Lender
- Asheville NC
- Posts 466
- Votes 317
Those terms sound good to me. Have heard of lend simpli, but never researched Check out Host Financial too. Where is your str? I invest in the Smokies in TN.
Post: air bnb str and cost segregation ????
- Lender
- Asheville NC
- Posts 466
- Votes 317
Hi Jay, definitely use Your Porter or another PMS as opposed to hiring lame property management. Also check out Price Labs for a pricing tool. Danny Rusteen has a good tutorial for it on YouTube.
And I second Yonah Weiss for cost seg. He's the man!
Post: Vacation Rental - Is 10% cash on cash too low for first STR?
- Lender
- Asheville NC
- Posts 466
- Votes 317
Sounds like you have some good perspective. A lot of times, looking for a unicorn keeps us in analysis paralysis. Sometimes, a base hit deal is just a good fit for our actual individual situation, and the amount we learn on the first deal is priceless. Wishing you and your wife luck.
Originally posted by @Peter Amendola:
@Gerald Pitts love this response Gerald. I found a property in Pennsylvania with a 21% cash on cash return… but my wife wants to start this locally to reduce the fear factor. Sometimes getting the first base hit is just as important as hitting the three run homer ;)
Post: Gatlinburg Tennessee Airbnb Property Manager Recommendations
- Lender
- Asheville NC
- Posts 466
- Votes 317
I was going to recommend Justin in the Smoky Mountains if you don't self manage. He's an owner himself and understands maximizing revenue and occupancy whereas most property managers in the Smoky Mountains area just boast occupancy, but charge ridiculously low prices and then take a huge cut of that so you hardly make any money.
Post: Vacation Rental - Is 10% cash on cash too low for first STR?
- Lender
- Asheville NC
- Posts 466
- Votes 317
10% is a little low, but could be the base hit you need (possibly more with Ken's amenities suggestion, along with appreciation). It seems like you've done your research If going local is what you need to get out of paralysis, do it. You could always sell in a year and invest somewhere with better COC numbers.
Post: Short Term Rental - How to partner
- Lender
- Asheville NC
- Posts 466
- Votes 317
The latest BP episode, #486 goes into a lot of good questions to ask when partnering. Definitely also have an attorney help draw up a contract.
Post: Curious about people's cash flow numbers on STR's...
- Lender
- Asheville NC
- Posts 466
- Votes 317
Originally posted by @Alex S.:
Originally posted by @Deanna Lawrence:
Originally posted by @Alex S.:
Most folks on here will advise against having a property management company for STRs,
@Alex S. I'm curious why you would say this?
Property management with LTRs is the norm. It is 10% and they handle all the tenant screenings, repairs, rent collection, etc. Extremely passive for the investor. STRs don't work like that. The management companies want 20% or more, plus the cleaning fee. That is a HUGE chunk of your cashflow. In many areas (like mine)...there aren't even any management companies because there aren't that many STRs. You just simply can't make the numbers work paying a STR manager unless you just stole the property. Also, it is really easy to self-manage. Hire a cleaning crew. Hire a handyman. Keep tabs on them. Just about everything else can be automated.
I think, as STRs are more normalized over the coming years, we'll see those management fees start to drop and maybe it'll be viable.
100% agree with Alex. Also, a lot of times property management companies are way underpricing the property. For example, you're getting a cut of $135 a night 90 days in a row as opposed to using your own pricing software and getting a fluctuating $210-$350 a night or more during those same 90 days. They sell themselves on "being booked up through the end of the year". That doesn't mean anything if they charge the guest peanuts, and you only get half a bag of peanuts. 😄
Self management is easy once you get automated systems up and running, and worth trying yourself for a month or two, and seeing for yourself how much money is possible for how much work.