All Forum Posts by: Jeff Gold

Just looked at “deal” in Gatlinburg for 3/3 with Mountain View with about 97k in revenue. 

It will go for 825-850k. On similar properties they are getting well over asking (and often over a dozen offers or more) and cash deals as many of you know…

20% down brings you to a mortgage of around 3200/month plus 2100/month management fee (25% of gross which is based on 2021 #'s) and you still have to pay taxes of approx 300/month, HOA 95/month and monthly expenses of approx 700/month (ac/heat, cable, homeowners insurance) plus upkeep/maintenance of cabin $150/month (just a guess but could be more).
65,500 in expenses (and I think this is a conservative number.
So, you are left with maybe 30-35k net annually..
You shelled out 170k plus closing expenses of 8500 (1%). 178,500 approx. 

Less then 20% CoC… unless you can increase your annual rental rates.

Also, there is no way of knowing if this market will continue to fly or come back down to earth. No way to fully calculate this risk…

I’m curious of the forum members thoughts are on this….

@Jason Wiser I think it’s great that you have turned this into a family experience and are remembering the fun part of investing.  You are looking to grow your asset and grow your str skills as well. It can cost a good amount of dough to get an str up and running. 

We did a lot of modifications to our place and also had to our in all new furniture and some appliances. It can add up! 

Curious… what’s the formula to determine pmi?

@Luke Carl are there certain conditions where  your vacation home can also make an income without it be considered in “investment” purchase?  I was reading in another thread that under certain criteria your vacation home can also make an income. 

@Jason Wiser I appreciate you walking me though that. 

Saving that 1% is a big deal. What the formula used to determine pmi?  I’ve always paid bigger downstroke so never had to worry about this but I prefer to pay pmi if it makes sense and keep extra cash on hand for other deals.

Jason, what COC return are you looking for with this investment?
 

@Jason Wiser

Looking at this quote…

The Borrower must keep the property available primarily (i.e., more than half of the calendar year) for the Borrower's personal use and enjoyment

How could you meet this criteria if you are using it as an str? Keeping it “available” for personal use 1/2 the would prohibit str during that time unless I’m reading it wrong. 

The Borrower may rent the property on a short-term basis provided that the property is not subject to any rental pools or agreements that require the Borrower to rent the property, give a management company or entity control over the occupancy of the property or involve revenue sharing between any owners and the developer or another party

So, you wouldn’t  be able to have a management company manage your property according to this requirement?  You would have to self-manage?

This is great learning!!!

If you meet this criteria then it would be considered a vacation home vs an investment property, correct?

I’m curious what the difference in mortgage rate between investment vs vacation home.

Also, do mortgage companies require pmi across the board when you are putting 10% down?

I apologize for the list of questions… just attempting to understand the behind the scene processes that lead to a purchase with vacation vs investment home.

Thanks

@Paul Sandhu according to reports it will only bring in 50 full time jobs. What are you seeing on your end that makes you believe it will increase need for str or ltr?  
Appreciate your insights! 

@Mike Petrosinelli makes sense. What COC return are you typically shooting for?

@Kyle Smith thank you for sharing your thoughts. Yes I’ve been noticing lots of “pool” homes going up. Are they just small pools in a room like a big jacuzzi?

@Collin Hays good points. And this is why I will likely never self-manage. 

@Collin Hays very well said! Panic buying. To me that’s when my antennas go up and they say… slow down rather then speed up. I wonder how many people are really doing their “due diligence” before walking into these deals. I think they are worried the train will leave without them. To me, you have to know your own rhythm. Trying to “outbid” others in inflated doesn’t jive with me. I think there are hidden gems but sometime stop and think outside the box. I haven’t bought in this market yet but might…. Only if it makes fiscal sense. My 2 cents…