All Forum Posts by: Joshua Feit

@Richard Lee Nice! I am buying in Wears Valley because I like to think that Wears Valley renters may be slightly more mature and quiet on average than PF / Dollywood renters, and therefore a little lighter on the wear/tear. I could be wrong about that, but it's just the sense I get driving around the area and seeing the appeal of the different places.

But if I went for a third, I may try to get something close to Gatlinburg or Dollywood to diversify the portfolio.

Regarding cleaners, we actually stayed in a cabin that your cleaner cleaned when we were in the area a few months ago. It was clean, but it wasn't perfect. The floor in the kitchen was sticky (think spilled Sprite) and she only left one bath towel in a cabin that sleeps six. Not bad at all, and mostly very clean, but Airbnb guests are brutal about their reviews.

Last weekend, we did a drop-in on our cleaner on a turn day unannounced. It was really great to see her in action. Mostly the check-in verified that she's doing a great job. I did find a couple of things that needed improvement, and I was able to send her a follow up email (with three compliments / affirmations of specific things she's doing great, and then two constructive suggestions) to let her know what I found.

Let's stay in touch! I think we can help each other dial in this new venture. Cheers!

@Richard Lee -- Sounds like Amy / Bryan -- is that your team?

If so, I work with Bryan on repairs. I actually thought about having Amy help me too, for all the reasons you mentioned. But I felt a little unsure about keeping all of the work in one family team. What happens when said family is on vacation, for instance?

Regardless, backups are important. I have a spreadsheet going with 5-6 vendors in each category.

Where are your cabins? We have one in Shagbark, and the one under contract is in Wears Valley.

All the best to you in 2019!

@Tanner Marsey Feel free to connect anytime!

@Dave Foster Yep -- you are right. I meant HELOC will give access to 70% of the funds. I added an update to my post above. (I should never try to type so late in the evening!)

So far, it has been fairly easy to run the VR on Airbnb. We're pretty new -- this is our fourth week. We have our 10th guest staying at the cabin right now. As with any business, it's all about the relationships! We took the most time figuring out who was going to be doing our cleaning, as they would be the ones in there every few days, and would be helping us to understand what's going on at the cabin.

We chose someone who:

-Uses an app to interface with our calendar -- so we don't have to keep communicating about the schedule

-Charges monthly instead of requiring payment after every cleaning

-Is just REALLY easy to communicate with. Very good language/social skills and answers calls/texts quickly.

We are learning that the nice thing about Gatlinburg/PF is that it is setup for vacation rental services. There are so many VRs that I can always seem to find someone who is able to help me with maintenance issues. Unlike some markets, there are plenty of cleaners, handymen/women, hot tub repair people, fireplace repair people, septic and well people, etc. And they all know how to work around guests/turnover schedules.

Like so many others, I worked with @Avery Carl to purchase my first cabin, and she is helping me with the purchase of the second one (now under contract).

Any Atlantans out there?

I think we need a little more information, please. 

-What is the market value of the home as it sits (current condition)?
-What work would need to be done to get it ready for sale on the MLS?
-How much is the total tax obligation?
-Is there any mortgage on the property? If so, what is the balance of the mortgage(s)?
-Any other liens or encumbrances against the property?

Also, where is it? Not looking for a full address, but can you share the street, city, and state?

Glad to help you brainstorm if I can!

Cheers,
Josh

Hi Libby!

I am not sure if this is the 'correct' way, but this is how I have done it in the past:

I would just treat it like a 6-plex and input the numbers as if it were one property. Have you tried that? Any reason that wouldn't work?

Now that you've run the numbers for individual properties, I am very curious to know how the numbers compare when you run it like a 6-plex. Please let us know!

Hope it helps,
Josh

Hi everyone!

I've been investing in Atlanta for four years, and I'm branching out into the VR business. I have my first cabin on Airbnb now, and I have a second one under contract.

I'm interested in networking with other people in Atlanta who are getting into the VR biz in the Smokies. I thought it might be helpful and fun to get together sometime and help each other out with strategies, favorite contractors, etc.

Anyone interested in meeting up sometime to talk shop?

Cheers,
Josh

Hi there!

1031 will only give you access to 70% of the equity. So that keeps $40,500 tied up that you could access if you sold and exchanged.

$40,500 is a full down payment on a great rental in Atlanta. I would sell and then buy three or four rentals that actually cash flow here in ATL (or in any of the many markets that work well for this). The beauty of ATL is that we are experiencing a ton of growth and solid appreciation too. But we're no California, and the purchase prices around here are very low in comparison.

I have some amazing contacts for management if you need them. And also, glad to talk shop if you would find if helpful. Reach out anytime. Cheers!

Hi Tanya!

While the analysis looks okay on paper, I'm going to guess that your numbers for repairs and CAPEX are very low. Based on the purchase price, I'm just going to take a wild guess that this is an older building in an average-at-best neighborhood.

If that's the case, you are going to spend a lot more on repairs, and you are going to have a lot of CAPEX every year. I've had places like this, and they always seem to do much worse than I am thinking.

This is especially true if you are going to use a manager. For example, on the places I self manage, if there's a toilet flapper that needs to be replaced, I can do it myself for $15 parts + my time. If a manager calls a handyman to fix that same problem, the minimum bill is going to be $125 (parts + markup + trip fee + other such nonsense). You are going to be AMAZED how much maintenance costs when a manager runs point.

Speaking of management, your percentage is low too. Even if the managers tell you they take 10%, they probably also take the first month's rent from any new tenant, so that's going to cost more every time you place a new tenant. And with a 5-plex like this, I bet you will have at least one placement a year. Maybe more.

Where you can gain some money in this analysis is in the garbage and water / sewer expenses. You can pass along a flat fee for garbage to the tenants. Just divide the bill by 5 and that's your flat fee. And for water/sewer, you can either install sub-meters and charge for usage (better way, but more expensive) or just come up with a flat fee and pass it along to tenants.

That's my two cents -- hope it helps!
Josh

This is a great start, Zachary! Do you have any capital with which you can go after a new investment? If you do, how about expanding on your current idea by getting a cute little house near your school and trying it as a short term rental on Airbnb? I have heard of a lot of people that have experienced great success by setting up STRs near schools with football programs. If you found the right place, you could even live in it and just rent the rooms like you do now. Or you could use it strictly as an Airbnb. Or get a duplex and live in one side and rent the other, or ... So many great options in a college town!

I have ten rentals in ATL and one STR/Airbnb in Gatlinburg/Pigeon Forge. Hit me up by DM if you want to chat about anything specific. Always glad to help!