All Forum Posts by: Raja Gupta

@Todd Goedeke - we've only been on the platform for about 3 weeks, so hard to say how it will be long term. We haven't had any maintenance issues, bad reviews, or guest issues, but given this is a new build and only been rented for 3 weeks, that's not surprising. 

What IS surprising is that we already have enough confirmed nights booked Feb-Aug that the net revenue will cover a full 12 months of operating expenses + maintenance. I am really blown away by how quickly our calendar filled up. I think CabinsUSA has a "no cancellation" policy, and makes "trip insurance" mandatory, so we should get paid out for the bookings we have so far, unless something crazy happens (or I am misunderstanding something). We have zero nights booked in Sep - Dec, and probably 6-8 open weeks from April-Aug, so all of those bookings will be profit.  
 

@Todd Goedeke - great questions!

We got lucky with our builder. I did some initial research and had some trouble finding a builder that had availability and willingness to build on a lot that I own. Not a lot of local builders have web sites or are looking for clients, so was just hard to find someone not being local. We originally had a verbal deal with a developer, and then the developer pulled out because he thought he could make more money with someone else, so I went straight to his builder and asked if he'd build a house for me without the developer. Luckily, he said yes, and that's how we found him. We didn't interview anyone else and felt comfortable with him, and it was a great experience. 

House details - 2600 sqft, has a basement (that's where the pool, theater, and game room are). The cost of the well and septic were included in the build cost - I think well was 15K and septic was ~$12.5K. 

We did sign a build contract with the builder, and all of the overages were selection items. Some examples are we added more cans, upgraded fixtures (lighting and plumbing), quartz instead of granite tops, added 1.5 bathrooms, added 2 fire places, added a waterfall for the pool, upgraded from carpet to wood flooring everywhere, added the theater (theater alone was $17K), etc. Most of these upgrades, we felt, would generate a return by having differentiating aesthetics, more utility, or more durability (or some combination of the three). 

Thanks, Avery! 

Hi Everyone, 

First, I want to say thank you to this community! I haven't been an active contributor (mainly because I didn't know anything - ha!), but I have learned so much since I joined the community a few years ago. I have read, soaked up knowledge and made some great contacts. 

We recently closed/completed a cabin build in Pigeon Forge with the help Julie McCoy, and I wanted to share our experience in case it is helpful to someone else. 

Investment Info:

Single-family residence build & hold investment in Pigeon Forge/Sevierville.

Build Budget: $583,500

Actual Build Cost: $632,700 (includes furnishings)

Cash invested: $106,500

We built this cabin (The Bear and Buck!) because as we were looking to invest, we were just not able to find a cabin that would perform the way we wanted it to, at the price point that we thought made it a good investment. Although we came in over budget by a substantial amount, we added in a lot extras that should classify this cabin as a "high end" rental in the market and help us keep our occupancy and DAR high. 

The cabin is a 4 Bed, 4 bath, 2 Half Bath cabin, with a pool, theater room and gaming area. 

What made you interested in investing in this type of deal?

We have some experience designing, building, and decorating homes, and wanted to take these skills and apply them to an investment of our own. It seemed like a good way to add value using our skills. 

How did you find this deal and how did you negotiate it?

I worked with Julie McCoy (I'll tag her if she responds to this post - won't let me tag her now for some reason) to find the lot and get the build started. She's awesome! 

How did you finance this deal?

Regular mortgage, second home loan.

How did you add value to the deal?

As mentioned earlier, we felt that our experience in knowing the build process, as well as our experience in decorating homes was crucial to making this deal work and brining value and uniqueness to our property.

What was the outcome?

The build process was challenging at times, but we had a great builder who helped us manage through everything. This was our first "remote" build (we are not local), and during COVID, there were a bunch of things that popped up that were unexpected. We worked through everything and couldn't be happier!

Lessons learned? Challenges?

Everything is going to take longer and cost more than you think. Don't be afraid to spend more if you can see a path to additional revenue and profit. 

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Yes - Julie McCoy was our agent. 

Financial Details to Date: 

Here is the good stuff - the financial details: 

- Land cost: $26K
- Build Costs: $537K
- Furnishings: $40K (includes substantial savings we due to our design experience - normally, this would be closer to $60K)
- Loan costs (interest payments during construction, closing costs, insurance, etc): $25,500
- Travel Costs (going to check on the build, meeting with builders, scouting lots,etc): $5K

Progress to date:

We are using a management company (Cabins USA) to operate the cabin. This is our first cabin, and we are on the hunt to build another, and we are focusing on growing our portfolio right now and leaving the management to someone else. So far we have been happy and they were really helpful in getting the cabin setup appropriately. The cabin came on to the rental market on Feb 3 (12 days ago), and so far we are booked  for 87 nights through June (59% occupancy so far). Our occupancy numbers by month so far are: 

- Feb: 81%; DAR (Net) $294/ Gross $367 (excludes cleaning fees, insurance, taxes, etc)
- March: 94%; DAR (Net) $357/ Gross $445
- April: 57%; DAR (Net) $316/ Gross $395
- May: 35%; DAR (Net) $366/ Gross $458
- Jun: 63%; DAR (Net) $421/ Gross $526 

We don't have any pics of the cabin up on the rental site yet, so find it amazing that we have such high occupancy rates in Feb and March already. We fully expect occupancy rates and DAR to increase as we move into summer and spring and we finally get pics of the cabin up on the rental site. 

We took some pics of the cabin as we were finishing up the decorating before the first renters, so if you are interested, feel free to take a look! 

The Bear and Buck - Prelim Photos

If anyone has any questions, I'm happy to help in any way that I can!

@Kristine Eickman - thank you for the detailed and informative post! It seems like you and your family made the properties work, band got out just at the right time!  With COVID and declining DAR numbers, seems like it might be hard to make it work right now.  That is also great perspective on the international renters. 

Seems like it might be best to table the idea of a Disney home for now, and see if we can find a better opportunity elsewhere (and then use the funds to visit Disney? haha). 

Thank you, everyone, for the helpful responses!

@amit - thank you for the offer! I have been in contact with Alice Horn and she has been very helpful. How has your experience been so far? Are the numbers they gave you bearing out or are you seeing higher/lower occupancy/DAR?

It seems like 80% might be doable in some years, but it might take a couple post-covid to reach those occupancy numbers. @Frank Borzen & @Kim Robinson - using 50-60% occupancy would make me feel a WHOLE lot better as that seems like it would be more reasonable.

@Amanda Ferguson and @Piero Millares - thank you for chiming in as well! Based on what you are seeing from the properties you are managing, what is a realistic occupancy rate expectation? Sounds like 80% is "possible," but maybe it is not probable?  Also, based on your experience, what factors seem to drive the best income to expense ratios? 

- 3, 4, 5, or 6 Bedrooms? Pools? Game rooms? Theaters? Theming? Nice/upscale furnishings? Trying to figure out what to really home in on when looking for the right property. 

My wife and I also own a small design shop so we can get trade pricing on furniture, decor, etc so we can offset some re-furnishing expense there and make things look fantastic. Only issue is I haven't seen much for sale that is either empty or sparse/inexpensive enough that the decorating would be a huge bonus for us. 

@John Underwood & @Frank Borzen - are you self managing properties in this area remotely? What has your experience been if so? I worry about cleaners being my only eyes/boots on the ground, and not having someone there that has incentives aligned with my own i.e. maximum occupancy and DAR. 

Hi Everyone,

My wife and I currently own some STR properties in TN and are looking to expand to the Disney area. We have narrowed in on buying in Windsor Hills as we feel like the amenities are a nice bonus for families that may not want to spend every day in the parks.

The issue we are having is that I just can't seem to make the numbers work, so wanting to see if maybe I am doing something wrong in my calculations. 

Right now, we are looking at 3bd townhouses in WH w/pool in the 220-240K range. I am estimating a $150/nt rate, ~$1000/month for mortgage costs (20% down, 3% int, including taxes), $1500/month in operating expenses (Utilities, HOA, maintenance, reserves, etc). Also assuming 30% of gross rents for property management since we are out of state investors. Based on some initial analysis, it looks like we would need a 80% occupancy to break even.

Do those numbers/ my assumptions look right to you? Is 80% even a feasible number during or even post COVID?  We could be open to going a little bigger and doing a 4-5 bed single family home as well. 

As a second question - I have been looking at some properties and rental calendars, and I can't seem to make heads of tails over what is causing high occupancy/ DAR. Seems like some properties with great theming and decorating are staying empty and others with old decor are rented every night. What do you see driving traffic to Disney STRs in particular? 

Would love the community's thoughts and advice! Thanks!