All Forum Posts by: Nathan W.

Quote from @John Underwood:

Quote from @Nathan W.:

 Would drilling the well deeper fix the problem or is something else going on? 

 Possibility that or or fracking the well.

Or worst case drilling a new well.

 Thanks. My well is pretty new but I'm in a neighborhood with a lot of construction going on. I worry that the well wont be deep enough once all the new builds are done. 

Quote from @Justin Beasley:

Quote from @Nathan W.:

I have a nice 2 acre lot with a view in the middle of the Gatlinburg, Pigeon Forge, and Wears Valley triangle.  I'm trying to narrow down what to build on it. 
I'm considering an upscale 4 Bedroom 4 1/2 bath Pool cabin. I honestly have no desire to own an indoor pool but all the numbers say I should do it. I'm guessing it will cost me about $250k in additional square footage and construction costs to add a pool and I'm estimating an additional $50k a year in revenue. 

This may sound stupid, but is there any danger of the indoor pool in the smokies becoming the Jacuzzi tub in the bedroom of the future? So many of these things look so underwhelming. I've seen hot tubs larger than the pools going into some of these places. I just wonder if they are getting over built. On one hand I worry that I won't be able to compete soon without one but I also worry they are a bit of a fad. 

For those that have an indoor pool. How big of a pain is it to manage them and how much extra costs does it add? Are you getting them cleaned weekly or after each guest leaves?

Thanks!

 On the pool question it can add anywhere from 75-125k on average.

 Thanks for that. My $250k was including the added square footage cost for the pool itself. Good to hear some solid numbers though, I appreciate it.

@Joel Owens @Ronald Rohde @Brock Mogensen

I really appreciate the input. 
As I said, we knew what we were purchasing when we bought it. We didn't buy this as a value add. Our goal was to gain some cash flow and hold it long term. Unless something changes we plan on holding this property indefinitely.
It sounds like we are just going to have to wait it out. The good news is in 19 years we will have quite the rent bump to look forward to assuming this tenant stays put. 

Thanks again. 

Quote from @John McKee:

Tenants and landlords can always renegotiate leases at anytime, but in your case it's highly unlikely that you will squeeze more rent out of them in 4 years as they have a contract right to renew that option at an agreed upon rate.  Ground leases are not for the value add investor so your going to have to wait it out.

I appreciate the reply. We plan on holding this asset for a long time and don't have much hope that we could renegotiate. I just wanted to make sure there wasn't anything that we could be missing. We see so many similar properties listed for sale and they all seem to have new leases on them even when they haven't come to the end of their term.

About 11 years ago I purchased a NNN Ground Lease with a couple of friends.
6% CAP | Corp Backed National Tenant | 10% rent bumps every 5 years | High Income Zip Code

It had a fresh 15 year NNN lease in place when we purchased it and it also has three 5 year option periods for a total of 30 years. 
We knew this when we purchased the property but the current rent is low. Even after two 10% rent bumps they are paying about 64% their national average per store for rent. This store is in a great location and it does very well for them. 

In 4 years our initial term with them will be over. I'm assuming they will exercise their option periods and there is nothing we can do about it but I wanted to see if anyone had any ideas. Do NNN tenants ever renegotiate leases after their initial term is up? For example, if they wanted to remodel the property I could see them wanting to have a longer agreement in place. That's a long shot but I wanted to ask. @Joel Owens you seem like the NNN expert here. Any advice? THANKS! 

I signed up for REI Hub yesterday. I'm still learning the system but it seems promising. It might be worth looking at.

Quote from @Kyle Smith:

All in on my 2600 sqft pool cabin with a big view, and me doing most of the construction management, was around $365/sqft.  It was built on a critical slope and the foundation was around $150k.  I’m with Luke. I wouldn’t build again…not in the smokies. Too many bad builders, contract labor is out of hand and the material costs haven’t came down like they should.  Also, better dang sure know who your contractor is and have many references and call those references.  If his estimates are too low, stay away.  Also note, if he can start this month then he has no business building in the mountains.  As far as I know, all the good builders are backed up for 6 months to 2 years to start. 

@Kyle Smith I hear you. A lot of people have really bad experiences building. I love it though and this will be my fourth build with this builder. Other than it taking longer than I would like (about 18 months) I have nothing but good things to say and can't wait to do it again. 
Pool or not pool, I'll definitely be building something on this lot. 

Kyle and @Ken Boone, how large are the pools in your cabins? 

Quote from @Ken Boone:

@Nathan W. .  The pool aspect should not add more than 70-100k to the build.  I can't imagine it being anywhere near 250k, but I could be wrong.

 I really appreciate the feedback @Ken Boone 
On the construction costs, that includes adding about 350 - 400 sqft in additional square footage to the house for the pool and pool equipment. That eats up about $100k of that $250k cost. I realize that $150k is on the high end for a pool but since I haven't built one before I'm just trying to be conservative. I also want to go all out if I do it. 

Again, really appreciate the input. 

Quote from @Luke Carl:

You have been paying attention on YouTube :) 

I wouldn’t want to build from scratch period and I also can’t swim. So I would be out on this idea altogether. You’ve done your homework. Just have to decide! 

@Luke Carl  Yes, enjoying the new Podcast! The bug guy was really interesting. 

I have a construction background and I work with a good builder in the area. I have one cabin done and two under construction as we speak. They are all being done for less than $300/sqft all in with the lot and furniture. My appraisal came back at $500/sqft. I think that's high but either way building is the only way I can make the numbers work in the smokies. This pool cabin would cost me about $330/sqft to build all in. The down side is it takes me 18 months from start to finish but I end up with so much equity day one it's worth it. I know construction isn't for everyone but I love it. 

That being said I'm just not a fan of pools. I'm trying to talk myself into it but looking to hear from all sides. 

I have a nice 2 acre lot with a view in the middle of the Gatlinburg, Pigeon Forge, and Wears Valley triangle.  I'm trying to narrow down what to build on it. 
I'm considering an upscale 4 Bedroom 4 1/2 bath Pool cabin. I honestly have no desire to own an indoor pool but all the numbers say I should do it. I'm guessing it will cost me about $250k in additional square footage and construction costs to add a pool and I'm estimating an additional $50k a year in revenue. 

This may sound stupid, but is there any danger of the indoor pool in the smokies becoming the Jacuzzi tub in the bedroom of the future? So many of these things look so underwhelming. I've seen hot tubs larger than the pools going into some of these places. I just wonder if they are getting over built. On one hand I worry that I won't be able to compete soon without one but I also worry they are a bit of a fad. 

For those that have an indoor pool. How big of a pain is it to manage them and how much extra costs does it add? Are you getting them cleaned weekly or after each guest leaves?

Thanks!