All Forum Posts by: Micah Jackson

Appreciate the feedback from everyone and hearing the variety of ideas.  As @Nathan Gesner said no one can truly answer, because it depends on my personal situation.  I love the feedback and ideas and this has given me a lot to consider as we enter 2023.

@John Morgan-Love your personal example of what worked for your situation. 

Jon-Yeah, I agree probably be a very long time before we see rates under 3 again.  Thanks for your advice.

Steve thanks for the input, I appreciate your viewpoint.

I have two STR properties in the Gatlinburg area. Currently owe $13,000.00 on cabin #1 and $235,000.00 on cabin #2. Each cabin would currently appraise between $900,000 and $950,000. I am trying to decide if I should leverage and purchase another property or payoff property #1 and then aggressively payoff property #2. Property #2 has a 2.9% rate and has 11 years 5 months left on the mortgage. Property #1 has a P and I payment of $2,000.00 a month that will be freed up soon. I have used the cabins profit to payoff cabin #1 the past few years. Both cabins gross around 75,000.00 to 80,000.00 each year and net around 55,000.00 to 60,000.0 per year.

I also have a commercial property worth 500,000.00 and owe 86,000.00 on it.  The interest rate is 5.4% on the commercial loan and it either needs to be paid off or refinanced in 3 years.  The payment is currently $1,100.00 per month.

My thought was get a Heloc or cash out refinance on cabin #1 and buy another STR rental with cash or also do a cash out refinance on the commercial building to have more cash to work with.

I am new at wholesaling and looking for some input.  

The private seller has a home with the ARV between $185,000 and $190,000. I have a family member who is a realtor and has sold houses in the neighborhood. She says, she would list the house for $188,000.00 if it was her listing. It a 4 bedroom 2.5 bath 2850 square feet. The house needs no work at all and is 5 years old. Rent for 3 bedrooms in the area are going for $1,395.00 to $1,495.00 per month. I would assume the 4 bedroom would get $100.00 more per month.

The seller says he needs to sell quickly.  He is asking for $170,000.

In this situation what is the price you would make to the seller?

I have a price in mind, I am just looking to see where seasoned wholesalers would come in, so I can compare.

Thanks,

Micah

I am from the Indy area and Bedford is about 1.5 hour drive from Indy.  I never have invested in Bedford, but I have had several long term rentals in smaller towns about an hour away from Indy.  One in particular has always had vacancy issues, due to the local economy (car manufactures left).  Try to talk to a local real estate agent in Bedford and get a sense if there is a lot of empty homes and if the local economy is good. 

Bedford is close to Bloomington and IU, so maybe that community is fine for investors..

I have owned a 3 bedroom cabin in Gatlinburg overlooking Ober since 2006. It has averaged 55,000 to 60,000 in gross rents the last 10 years. Maintenance cost are higher than a standard SFR. Cabin staining, wood bees, wood peckers, etc. and of course nothing parties like a rental. Even with these costs associated with owning a cabin its been well worth it.

I purchased another 3 bedroom in the Preserve in the Wears Valley area last year.

The market has changed a lot since 2006.  The cabin rental companies use to do a 60/40 split, now its a lot more competitive.  Even with a cabin rental company you can get a 80/20 or 85/15 split.