All Forum Posts by: Scott Weston

I've owned for like 2 weeks. It was my intnetion to rent as much as possible, use 2 weeks, and hold long term (I have 6 other properties - mostly investment loans - in my portoflio that i have used this strategy on so i don't htink its hard to prove thats my intent).

I would still be hit by short term cap gains - it would just be deferred, correct?

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Yea pretty quickly figured out teh limitations with a quick google. Will take a few years to transition it from second home to a rental. Thanks.

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We recently purchased a home using a 2nd home loan (with intent to use a few weeks a year and rent the balance which is permitted).

We just got a really compelling offer to immediately sell the home. Curious if the existence of the second home loan would prevent me from placing the gain into a 1031 and finding a replacement property. Obviously I would have to go for an investment/commercial loan on the replacement, but curious if this can be executed.

Thanks

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@Mitch Davidson - agreed. Hammer got dropped in Highlands with some level of grandfathering to existing rentals. Cashiers is unincorporated Jackson County - where Highlands is its own municipality and able to act in more precise way that exact community. So while there is always risk in this area - i don't know. Its a vacation town. Some level of protection will almost certainly be provided as opposed to some sort of outright ban.

Quote from @Mitch Davidson:

@Scott Weston and @Luke Sanders. I looked at Sapphire pretty hard last year, and made a couple of offers there, but in the end decided it wasn't the market for me. I too live in Asheville, so Sapphire was closer than Cashiers and Highlands. And the locals in Highlands have been fiercely debating STR's and regulations for the last few years, so I wouldn't be comfortable buying there. That also made me hesitant about Cashiers, meaning I worried that the mindset would spill over. Sapphire is much more of a vacation home community.

The deciding factor for me was that Sapphire and Cashiers don't have a lot to do, except for golf and hiking. Sure, there's a little beach at the one lake, and the shops at Cashiers, but to me it's just not quite enough. Lake Lure, for example, has more to offer, is more well-known, and is closer to some other great towns like Black Mountain and Hendersonville.

If I was buying south or southwest of Asheville right now I might be trying to get very close to one of our great new downhill mountain bike parks, meaning Ride Kanuga in Hendersonville or Ride Rock Creek in Zirconia. Both are drawing more and more tourism, as well as relocations, and are holding more and more special events and competitions.

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Western NC, North Carolina

Luke - after a year of searching I found a property that i'm under contract on and feel pretty good about. I landed off of Highway 64 between Cashiers and Highlands - so good proximity to both without a daunting drive to get to a great view. Here's my takeaway from the market:

Smaller, less impressive cabins are pretty over-saturated and unless you have a big view (or water frontage) to really make you stand out, you will struggle. I think the area is short on larger (4-5 Bedroom) homes that can really accomodate a whole family. Big, covered, outdoor living areas also appear to be a winning amenity for each home. This is a fine needle to thread because at this size, you very quickly start competing with high net worth individuals who are seeking summer homes. An agent told me that 9/10 transactions they handle are cash and not financed - so i think in this particular submarket going in with financing really weakens you.

All that being said - follow the money. If you can get a big 4-5 BR house with a view for a under a million bucks, i'm pretty confident you can cash flow it with a good return, even in a 6%-7% interest rate environment. Plus, because of the growth of the area and the elevation (you just don't get the cool weather once you drive down the hill to Brevard or other areas), SO MUCH money has eyes on it. I think demand will continue to grow as the area settles into its next life as more of a year round destination.

Quote from @Luke Sanders:

Quote from @Scott Weston:

Quote from @Michael Baum:

So you shouldn't count on appreciation to justify under performing STRs.

Yea this is a long-term personal play more than a strict STR deal. wouldn't bring this one to a partner or anything just satisfying my own desire to get a foothold in a place i like to be.

Scott - I'm in the same boat -- looking for STRs in the area you mention, as well as closer to Asheville (where I live).
Demand and occupancy appears strong, but the numbers don't add up for me to justify the effort of STR. And, not confident of the earnings/industry in the area to feel good about LTR. Curious if you'd found anything?

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Western NC, North Carolina

Quote from @Mack Lengel:

Quote from @Scott Weston:

Quote from @Brock Lanoza:

@Scott Weston how are you currently evaluating potential markets to invest in? Are there certain performance targets you're looking to hit with your investments?

yea general threshold is 5-7% unlevered and 10% with debt in place.

I have come across a couple of deals in the Smokies that meet that criteria if that market is of interest to you!

Very interested in teh smokies.

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Quote from @Michael Baum:

So you shouldn't count on appreciation to justify under performing STRs.

Yea this is a long-term personal play more than a strict STR deal. wouldn't bring this one to a partner or anything just satisfying my own desire to get a foothold in a place i like to be.

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Western NC, North Carolina

Really interested in investing in this market and would accept a relatively low return (or even a break even scenario because i believe in continued appreciation potential here). Ownership demand here seems to heavily outweigh tourism demand and i'm struggling to get anything to pencil. Not alot of confidence in any existing rentals as consistent indciators but I feel like so many homes are 1/2 rentals and don't tell the whole story.

Anyone have any insight into the Cashiers/Highlands/Sapphire/Lake Toxaway markets to share?

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Western NC, North Carolina

Quote from @Michael Baum:

Well those are realistic numbers @Scott Weston. You might look around Lake Tahoe as well. The high end homes on the lake can do really well, but entry point is pretty high. Just double check the regs for each place to make sure there aren't a ton of restrictions.

I was perusing some high end Tahoe rentals on specialized management websites and they have very full calendars. I was surprised actually.

I think your budget might be a bit light, but worth a look.

Yea lakefront Tahoe is like $5MM plus. Was thinking more nice condos in Aspen/Vail/Whitefish that can do $600k a year in revenue.

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All Forum Posts by: Scott Weston

Scott Weston has started 4 posts and replied 18 times.

Post: 1031 Question (Existing Second Home Loan)

Post: 1031 Question (Existing Second Home Loan)

Post: 1031 Question (Existing Second Home Loan)

Post: 1031 Question (Existing Second Home Loan)

Post: Highlands Cashiers Market

Post: Highlands Cashiers Market

Post: Big Budget - Top Destinations

Post: Highlands Cashiers Market

Post: Highlands Cashiers Market

Post: Big Budget - Top Destinations