How slow is Gatlinburg/Pigeon Forge?
Collin HaysBusiness Member
Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votesHow slow is Gatlinburg/Pigeon Forge?
Most Popular Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votesQuote from @John Underwood:
Quote from @Jay Hinrichs:
Quote from @John Underwood:
Quote from @Jay Hinrichs:
Quote from @John Underwood:
What I see as crazy is that someone down the street from our cabin just built a brand new cabin to rent out. How in the world are they going to even break even after paying for a new construction cabin? I don't see them faring well.
On the plus side our June and July look to be the best ever at our 6 bedroom cabin. Maybe because we are very established?
It seems word of mouth helps us a lot. Someone stays with us then their cousin, aunt etc end up direct booking with us.
do you guys follow the NODs there or attend courthouse foreclosure auctions in that county ? might be a time to start. Even if the props are over leveraged sometimes the banks will drop the opening bid and some deals can be made.. just curious ..
What is NOD's?
I live 3 hours away, but don't have a day job and I am always open to an opportunity.
I'd be open to buying cheaper properties too where all the service industry workers could afford. I've heard there is a real need for this type of housing.
Although in reality if these "cabins" are 1 to 3 mil with the associated max debt investors seem to like might now be a lot of activity at courthouse steps.. not many have 750 to 2 mil in cash to buy at courthouse given the risks associated. CA of course happens every day as there are groups/individuals with some serious horsepower in those markets buying courthouse steps.
Sounds like what we call a Lis Pendens.
Yes same purpose.. Lis Pendens is when your doing mortgage foreclsoures through the courts.. NOD is done with Deeds of Trust and the power of sale with a Trustee NO court needed the trustee has the power to conduct the sale.. Trustee's are generally foreclosure mills owed by attorney firms.. But Trust Deeds allow for much quicker foreclosures than mortgages since they are not bogged down in the courtrooms. U can still do a mortgage and judicial foreclosure on the west coast and those happened during the robo signing foreclosures.. But when market is normal its all trust deed and Trustee sales.. Its the same in GA TX and of course all the west coast states OR WA CA AZ NV etc. I looked at foreclsoures in N. Carolina and those things are very complicated with the overbid process. Cant recall TN process although I funded a bunch of stuff in Memphis over the years just never dove into courthouse defaults in that state simple google search will tell us though.
90 Replies
- 1yJohn UnderwoodPro MemberInvestor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
What I see as crazy is that someone down the street from our cabin just built a brand new cabin to rent out. How in the world are they going to even break even after paying for a new construction cabin? I don't see them faring well.
On the plus side our June and July look to be the best ever at our 6 bedroom cabin. Maybe because we are very established?
It seems word of mouth helps us a lot. Someone stays with us then their cousin, aunt etc end up direct booking with us.
- 1yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @John Underwood:
What I see as crazy is that someone down the street from our cabin just built a brand new cabin to rent out. How in the world are they going to even break even after paying for a new construction cabin? I don't see them faring well.
On the plus side our June and July look to be the best ever at our 6 bedroom cabin. Maybe because we are very established?
It seems word of mouth helps us a lot. Someone stays with us then their cousin, aunt etc end up direct booking with us.
do you guys follow the NODs there or attend courthouse foreclosure auctions in that county ? might be a time to start. Even if the props are over leveraged sometimes the banks will drop the opening bid and some deals can be made.. just curious .. - 1yJohn UnderwoodPro MemberInvestor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
Quote from @Jay Hinrichs:
Quote from @John Underwood:
What I see as crazy is that someone down the street from our cabin just built a brand new cabin to rent out. How in the world are they going to even break even after paying for a new construction cabin? I don't see them faring well.
On the plus side our June and July look to be the best ever at our 6 bedroom cabin. Maybe because we are very established?
It seems word of mouth helps us a lot. Someone stays with us then their cousin, aunt etc end up direct booking with us.
do you guys follow the NODs there or attend courthouse foreclosure auctions in that county ? might be a time to start. Even if the props are over leveraged sometimes the banks will drop the opening bid and some deals can be made.. just curious ..What is NOD's?
I live 3 hours away, but don't have a day job and I am always open to an opportunity.
I'd be open to buying cheaper properties too where all the service industry workers could afford. I've heard there is a real need for this type of housing.
- 1yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @John Underwood:
Quote from @Jay Hinrichs:
Quote from @John Underwood:
What I see as crazy is that someone down the street from our cabin just built a brand new cabin to rent out. How in the world are they going to even break even after paying for a new construction cabin? I don't see them faring well.
On the plus side our June and July look to be the best ever at our 6 bedroom cabin. Maybe because we are very established?
It seems word of mouth helps us a lot. Someone stays with us then their cousin, aunt etc end up direct booking with us.
do you guys follow the NODs there or attend courthouse foreclosure auctions in that county ? might be a time to start. Even if the props are over leveraged sometimes the banks will drop the opening bid and some deals can be made.. just curious ..What is NOD's?
I live 3 hours away, but don't have a day job and I am always open to an opportunity.
I'd be open to buying cheaper properties too where all the service industry workers could afford. I've heard there is a real need for this type of housing.
NOD = Notice of Default first document filed when the bank is starting Deed of Trust or Mortgage foreclosure .. Might be a west coast term.. These are published in the local paper by law. I think pretty much in all counties in the US IE start of the process.. Also many pre foreclosure investors/students follow those to go knocking on doors per their Guru training. - 1yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @John Underwood:
Quote from @Jay Hinrichs:
Quote from @John Underwood:
What I see as crazy is that someone down the street from our cabin just built a brand new cabin to rent out. How in the world are they going to even break even after paying for a new construction cabin? I don't see them faring well.
On the plus side our June and July look to be the best ever at our 6 bedroom cabin. Maybe because we are very established?
It seems word of mouth helps us a lot. Someone stays with us then their cousin, aunt etc end up direct booking with us.
do you guys follow the NODs there or attend courthouse foreclosure auctions in that county ? might be a time to start. Even if the props are over leveraged sometimes the banks will drop the opening bid and some deals can be made.. just curious ..What is NOD's?
I live 3 hours away, but don't have a day job and I am always open to an opportunity.
I'd be open to buying cheaper properties too where all the service industry workers could afford. I've heard there is a real need for this type of housing.
Although in reality if these "cabins" are 1 to 3 mil with the associated max debt investors seem to like might now be a lot of activity at courthouse steps.. not many have 750 to 2 mil in cash to buy at courthouse given the risks associated. CA of course happens every day as there are groups/individuals with some serious horsepower in those markets buying courthouse steps. - 1yJohn UnderwoodPro MemberInvestor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
Quote from @Jay Hinrichs:
Quote from @John Underwood:
Quote from @Jay Hinrichs:
Quote from @John Underwood:
What I see as crazy is that someone down the street from our cabin just built a brand new cabin to rent out. How in the world are they going to even break even after paying for a new construction cabin? I don't see them faring well.
On the plus side our June and July look to be the best ever at our 6 bedroom cabin. Maybe because we are very established?
It seems word of mouth helps us a lot. Someone stays with us then their cousin, aunt etc end up direct booking with us.
do you guys follow the NODs there or attend courthouse foreclosure auctions in that county ? might be a time to start. Even if the props are over leveraged sometimes the banks will drop the opening bid and some deals can be made.. just curious ..What is NOD's?
I live 3 hours away, but don't have a day job and I am always open to an opportunity.
I'd be open to buying cheaper properties too where all the service industry workers could afford. I've heard there is a real need for this type of housing.
Although in reality if these "cabins" are 1 to 3 mil with the associated max debt investors seem to like might now be a lot of activity at courthouse steps.. not many have 750 to 2 mil in cash to buy at courthouse given the risks associated. CA of course happens every day as there are groups/individuals with some serious horsepower in those markets buying courthouse steps.Sounds like what we call a Lis Pendens.
- 1yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @John Underwood:
Quote from @Jay Hinrichs:
Quote from @John Underwood:
Quote from @Jay Hinrichs:
Quote from @John Underwood:
What I see as crazy is that someone down the street from our cabin just built a brand new cabin to rent out. How in the world are they going to even break even after paying for a new construction cabin? I don't see them faring well.
On the plus side our June and July look to be the best ever at our 6 bedroom cabin. Maybe because we are very established?
It seems word of mouth helps us a lot. Someone stays with us then their cousin, aunt etc end up direct booking with us.
do you guys follow the NODs there or attend courthouse foreclosure auctions in that county ? might be a time to start. Even if the props are over leveraged sometimes the banks will drop the opening bid and some deals can be made.. just curious ..What is NOD's?
I live 3 hours away, but don't have a day job and I am always open to an opportunity.
I'd be open to buying cheaper properties too where all the service industry workers could afford. I've heard there is a real need for this type of housing.
Although in reality if these "cabins" are 1 to 3 mil with the associated max debt investors seem to like might now be a lot of activity at courthouse steps.. not many have 750 to 2 mil in cash to buy at courthouse given the risks associated. CA of course happens every day as there are groups/individuals with some serious horsepower in those markets buying courthouse steps.Sounds like what we call a Lis Pendens.
Yes same purpose.. Lis Pendens is when your doing mortgage foreclsoures through the courts.. NOD is done with Deeds of Trust and the power of sale with a Trustee NO court needed the trustee has the power to conduct the sale.. Trustee's are generally foreclosure mills owed by attorney firms.. But Trust Deeds allow for much quicker foreclosures than mortgages since they are not bogged down in the courtrooms. U can still do a mortgage and judicial foreclosure on the west coast and those happened during the robo signing foreclosures.. But when market is normal its all trust deed and Trustee sales.. Its the same in GA TX and of course all the west coast states OR WA CA AZ NV etc. I looked at foreclsoures in N. Carolina and those things are very complicated with the overbid process. Cant recall TN process although I funded a bunch of stuff in Memphis over the years just never dove into courthouse defaults in that state simple google search will tell us though.
- Yea that is crazy and you are right they are not going to fare well.
Quote from @John Underwood:
What I see as crazy is that someone down the street from our cabin just built a brand new cabin to rent out. How in the world are they going to even break even after paying for a new construction cabin? I don't see them faring well.
On the plus side our June and July look to be the best ever at our 6 bedroom cabin. Maybe because we are very established?
It seems word of mouth helps us a lot. Someone stays with us then their cousin, aunt etc end up direct booking with us.
- 1yJohn UnderwoodPro MemberInvestor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
Quote from @Collin Hays:
I did a quick check on VRBO for a McMansion cabin this weekend - Friday and Saturday only, 10 people, 4 bedrooms, 4 baths. There are over 50 pages of vacancies, which means there are hundreds of McMansion cabins available, for as little as $254 per night, including all fees and taxes. By my math, that would put actual nightly rent in the $130-150 range, on cabins that recently sold for between $1 and $2 million. At 10 guests, this works out to $13-15 per night per guest. That rivals Salvation Army.
No wonder my cute 1-bedroomer @ $90 sits empty.
Regarding home sales, I talked today to a well-connected realtor in the area, Phillip Derosia, who told me things are not moving at all, even with significant price cuts. He knew of a short sale just last week.
An interesting year this will shape up to be.
Collin, I love hearing your insights about the PF market as I have a vested interest.
- Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes1y
It is far too early in the cycle to score any deals. Current buyers of foreclosures and “bargains” will also be selling at a significant loss.
A lot more unwinding left to go.
- 1yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Collin Hays:
It is far too early in the cycle to score any deals. Current buyers of foreclosures and “bargains” will also be selling at a significant loss.
A lot more unwinding left to go.
vulture fund or small hedge fund could move into buy foreclosures.. like they have done in many other markets.. fresh capital not selling anything just looking to deploy
- 1yAndrew SteffensBusiness MemberTampa, FL · Member since 2022 · 4k+ posts · 3k+ votes
Do you have data on visitors? Even with Canada issues FL did record tourism. My question is, is it a demand problem, supply problem or both? I see a lot of newbies on here looking looking to jump into this market thinking its a great idea, and that is the problem - too many people with the same idea. Same thing with Orlando.
Vacation Rentals of Florida53 Reviews- Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes1y
Quote from @Andrew Steffens:
Do you have data on visitors? Even with Canada issues FL did record tourism. My question is, is it a demand problem, supply problem or both? I see a lot of newbies on here looking looking to jump into this market thinking its a great idea, and that is the problem - too many people with the same idea. Same thing with Orlando.
The National Park Service will release 2025 visitor data in April or May of 2026.
However, this page tells a pretty accurate story - lodging sales in 2025 versus 2024. Things looked pretty steady year over year until June. That agrees with my own company's statistics roughly.
- Member since 2018 · 88 posts · 55 votes1y
Quote from @Collin Hays:
I did a quick check on VRBO for a McMansion cabin this weekend - Friday and Saturday only, 10 people, 4 bedrooms, 4 baths. There are over 50 pages of vacancies, which means there are hundreds of McMansion cabins available, for as little as $254 per night, including all fees and taxes. By my math, that would put actual nightly rent in the $130-150 range, on cabins that recently sold for between $1 and $2 million. At 10 guests, this works out to $13-15 per night per guest. That rivals Salvation Army.
No wonder my cute 1-bedroomer @ $90 sits empty.
Regarding home sales, I talked today to a well-connected realtor in the area, Phillip Derosia, who told me things are not moving at all, even with significant price cuts. He knew of a short sale just last week.
An interesting year this will shape up to be.
Im not sure why you are saying this. I just did the same search myself. June 6-8, 4BR and 4BA, 10 travelers. For the Gatlinburg PF area. Sorted to only show those rated 9+ (4.5, i think that is reasonable).
170 properties came up which, at 50 listing per page, is 3.5pages. Not 50. At the top it says
Gatlinburg - Pigeon Forge is popular!
Only 12% of properties are available on our site for your dates.
Only the first 10 properties listed come to under 900 with the fees for 2 nights which brings it to 450 per night.
I have 8 properties in the smokies and they are all booked for this weekend.
I do think that this summer may be a bit slower or more last minute and i def would not be buying cabins at this point. I do agree with you that the there is still more unravelling to go for sure. But there is a little too much fear mongering here i feel- Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes1y
Quote from @Yitzchok Carmen:
Quote from @Collin Hays:
I did a quick check on VRBO for a McMansion cabin this weekend - Friday and Saturday only, 10 people, 4 bedrooms, 4 baths. There are over 50 pages of vacancies, which means there are hundreds of McMansion cabins available, for as little as $254 per night, including all fees and taxes. By my math, that would put actual nightly rent in the $130-150 range, on cabins that recently sold for between $1 and $2 million. At 10 guests, this works out to $13-15 per night per guest. That rivals Salvation Army.
No wonder my cute 1-bedroomer @ $90 sits empty.
Regarding home sales, I talked today to a well-connected realtor in the area, Phillip Derosia, who told me things are not moving at all, even with significant price cuts. He knew of a short sale just last week.
An interesting year this will shape up to be.
Im not sure why you are saying this. I just did the same search myself. June 6-8, 4BR and 4BA, 10 travelers. For the Gatlinburg PF area. Sorted to only show those rated 9+ (4.5, i think that is reasonable).
170 properties came up which, at 50 listing per page, is 3.5pages. Not 50. At the top it says
Gatlinburg - Pigeon Forge is popular!
Only 12% of properties are available on our site for your dates.
Only the first 10 properties listed come to under 900 with the fees for 2 nights which brings it to 450 per night.
I have 8 properties in the smokies and they are all booked for this weekend.
I do think that this summer may be a bit slower or more last minute and i def would not be buying cabins at this point. I do agree with you that the there is still more unravelling to go for sure. But there is a little too much fear mongering here i feelYour query is very different. I didn't filter out based on ratings. 170 empty McMansions is still a lot in the first weekend of June. I am glad to hear that you are booked up for the weekend.
- Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes1y
Quote from @Yitzchok Carmen:
Quote from @Collin Hays:
I did a quick check on VRBO for a McMansion cabin this weekend - Friday and Saturday only, 10 people, 4 bedrooms, 4 baths. There are over 50 pages of vacancies, which means there are hundreds of McMansion cabins available, for as little as $254 per night, including all fees and taxes. By my math, that would put actual nightly rent in the $130-150 range, on cabins that recently sold for between $1 and $2 million. At 10 guests, this works out to $13-15 per night per guest. That rivals Salvation Army.
No wonder my cute 1-bedroomer @ $90 sits empty.
Regarding home sales, I talked today to a well-connected realtor in the area, Phillip Derosia, who told me things are not moving at all, even with significant price cuts. He knew of a short sale just last week.
An interesting year this will shape up to be.
Im not sure why you are saying this. I just did the same search myself. June 6-8, 4BR and 4BA, 10 travelers. For the Gatlinburg PF area. Sorted to only show those rated 9+ (4.5, i think that is reasonable).
170 properties came up which, at 50 listing per page, is 3.5pages. Not 50. At the top it says
Gatlinburg - Pigeon Forge is popular!
Only 12% of properties are available on our site for your dates.
Only the first 10 properties listed come to under 900 with the fees for 2 nights which brings it to 450 per night.
I have 8 properties in the smokies and they are all booked for this weekend.
I do think that this summer may be a bit slower or more last minute and i def would not be buying cabins at this point. I do agree with you that the there is still more unravelling to go for sure. But there is a little too much fear mongering here i feelAaaaahhhh.....
When I do a basic search in the area for a very near term date, it says over 1k available....... Notice in top left of page, it says how many there is because it max's out the page count.
And that's looking less then 10 days ahead for booking.
And as I narrow in on Gatlinburg it comes just under 500
That's a lot, that's a hell of a lot of offerings....
- Member since 2018 · 88 posts · 55 votes1y
Quote from @Collin Hays:
Quote from @Yitzchok Carmen:
Quote from @Collin Hays:
I did a quick check on VRBO for a McMansion cabin this weekend - Friday and Saturday only, 10 people, 4 bedrooms, 4 baths. There are over 50 pages of vacancies, which means there are hundreds of McMansion cabins available, for as little as $254 per night, including all fees and taxes. By my math, that would put actual nightly rent in the $130-150 range, on cabins that recently sold for between $1 and $2 million. At 10 guests, this works out to $13-15 per night per guest. That rivals Salvation Army.
No wonder my cute 1-bedroomer @ $90 sits empty.
Regarding home sales, I talked today to a well-connected realtor in the area, Phillip Derosia, who told me things are not moving at all, even with significant price cuts. He knew of a short sale just last week.
An interesting year this will shape up to be.
Im not sure why you are saying this. I just did the same search myself. June 6-8, 4BR and 4BA, 10 travelers. For the Gatlinburg PF area. Sorted to only show those rated 9+ (4.5, i think that is reasonable).
170 properties came up which, at 50 listing per page, is 3.5pages. Not 50. At the top it says
Gatlinburg - Pigeon Forge is popular!
Only 12% of properties are available on our site for your dates.
Only the first 10 properties listed come to under 900 with the fees for 2 nights which brings it to 450 per night.
I have 8 properties in the smokies and they are all booked for this weekend.
I do think that this summer may be a bit slower or more last minute and i def would not be buying cabins at this point. I do agree with you that the there is still more unravelling to go for sure. But there is a little too much fear mongering here i feelYour query is very different. I didn't filter out based on ratings. 170 empty McMansions is still a lot in the first weekend of June. I am glad to hear that you are booked up for the weekend.
If I remove the ratings filter it goes up to 290 listing which is a bit less than 6 pages. Perhaps ypu are getting confused about 50 listings per page vs 50 pages?
Yes its def more than we would like to see but even still the cheapest place you will find is about 350/ nightly. And again it still says that only 13% of the places are open which means there is an 87% chance that you are booked this weekend.
Could be better for sure, but terrible? I dont think so. Its def harder than it used to be and sometimes I am still stumped by a cabin that is rated well, priced right etc and still just wont book for specific date. But if you bought right even the last few years I dont think the sky is falling.
I have seen on FB groups that people are blaming a slowdown on the "trump economy" bc Canadians are boycotting the US etc but how many Canadians and Europeans come to the smokies anyway... These are the same guys blaming last year on the "Biden economy". I think some years are better and some are slower but again unless you paid a million dollars for a 3br house you should be okay
I feel like as long as there's not a massive stock market crash or something like that, we need to just be proactively priced and roll with the punches.
I hope I can look back at this in a year and have been right :)
- Member since 2018 · 88 posts · 55 votes1y
Quote from @James Hamling:
Quote from @Yitzchok Carmen:
Quote from @Collin Hays:
I did a quick check on VRBO for a McMansion cabin this weekend - Friday and Saturday only, 10 people, 4 bedrooms, 4 baths. There are over 50 pages of vacancies, which means there are hundreds of McMansion cabins available, for as little as $254 per night, including all fees and taxes. By my math, that would put actual nightly rent in the $130-150 range, on cabins that recently sold for between $1 and $2 million. At 10 guests, this works out to $13-15 per night per guest. That rivals Salvation Army.
No wonder my cute 1-bedroomer @ $90 sits empty.
Regarding home sales, I talked today to a well-connected realtor in the area, Phillip Derosia, who told me things are not moving at all, even with significant price cuts. He knew of a short sale just last week.
An interesting year this will shape up to be.
Im not sure why you are saying this. I just did the same search myself. June 6-8, 4BR and 4BA, 10 travelers. For the Gatlinburg PF area. Sorted to only show those rated 9+ (4.5, i think that is reasonable).
170 properties came up which, at 50 listing per page, is 3.5pages. Not 50. At the top it says
Gatlinburg - Pigeon Forge is popular!
Only 12% of properties are available on our site for your dates.
Only the first 10 properties listed come to under 900 with the fees for 2 nights which brings it to 450 per night.
I have 8 properties in the smokies and they are all booked for this weekend.
I do think that this summer may be a bit slower or more last minute and i def would not be buying cabins at this point. I do agree with you that the there is still more unravelling to go for sure. But there is a little too much fear mongering here i feelAaaaahhhh.....
When I do a basic search in the area for a very near term date, it says over 1k available....... Notice in top left of page, it says how many there is because it max's out the page count.
And that's looking less then 10 days ahead for booking.
And as I narrow in on Gatlinburg it comes just under 500
That's a lot, that's a hell of a lot of offerings....
That is true but that is a search for all listings not the mcmansions. There are 10s of thousands of listings in the smokies
- Member since 2018 · 88 posts · 55 votes1y
Quote from @James Hamling:
Quote from @Yitzchok Carmen:
Quote from @Collin Hays:
I did a quick check on VRBO for a McMansion cabin this weekend - Friday and Saturday only, 10 people, 4 bedrooms, 4 baths. There are over 50 pages of vacancies, which means there are hundreds of McMansion cabins available, for as little as $254 per night, including all fees and taxes. By my math, that would put actual nightly rent in the $130-150 range, on cabins that recently sold for between $1 and $2 million. At 10 guests, this works out to $13-15 per night per guest. That rivals Salvation Army.
No wonder my cute 1-bedroomer @ $90 sits empty.
Regarding home sales, I talked today to a well-connected realtor in the area, Phillip Derosia, who told me things are not moving at all, even with significant price cuts. He knew of a short sale just last week.
An interesting year this will shape up to be.
Im not sure why you are saying this. I just did the same search myself. June 6-8, 4BR and 4BA, 10 travelers. For the Gatlinburg PF area. Sorted to only show those rated 9+ (4.5, i think that is reasonable).
170 properties came up which, at 50 listing per page, is 3.5pages. Not 50. At the top it says
Gatlinburg - Pigeon Forge is popular!
Only 12% of properties are available on our site for your dates.
Only the first 10 properties listed come to under 900 with the fees for 2 nights which brings it to 450 per night.
I have 8 properties in the smokies and they are all booked for this weekend.
I do think that this summer may be a bit slower or more last minute and i def would not be buying cabins at this point. I do agree with you that the there is still more unravelling to go for sure. But there is a little too much fear mongering here i feelAaaaahhhh.....
When I do a basic search in the area for a very near term date, it says over 1k available....... Notice in top left of page, it says how many there is because it max's out the page count.
And that's looking less then 10 days ahead for booking.
And as I narrow in on Gatlinburg it comes just under 500
That's a lot, that's a hell of a lot of offerings....
- Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes1y
Quote from @Yitzchok Carmen:
Quote from @James Hamling:
Quote from @Yitzchok Carmen:
Quote from @Collin Hays:
I did a quick check on VRBO for a McMansion cabin this weekend - Friday and Saturday only, 10 people, 4 bedrooms, 4 baths. There are over 50 pages of vacancies, which means there are hundreds of McMansion cabins available, for as little as $254 per night, including all fees and taxes. By my math, that would put actual nightly rent in the $130-150 range, on cabins that recently sold for between $1 and $2 million. At 10 guests, this works out to $13-15 per night per guest. That rivals Salvation Army.
No wonder my cute 1-bedroomer @ $90 sits empty.
Regarding home sales, I talked today to a well-connected realtor in the area, Phillip Derosia, who told me things are not moving at all, even with significant price cuts. He knew of a short sale just last week.
An interesting year this will shape up to be.
Im not sure why you are saying this. I just did the same search myself. June 6-8, 4BR and 4BA, 10 travelers. For the Gatlinburg PF area. Sorted to only show those rated 9+ (4.5, i think that is reasonable).
170 properties came up which, at 50 listing per page, is 3.5pages. Not 50. At the top it says
Gatlinburg - Pigeon Forge is popular!
Only 12% of properties are available on our site for your dates.
Only the first 10 properties listed come to under 900 with the fees for 2 nights which brings it to 450 per night.
I have 8 properties in the smokies and they are all booked for this weekend.
I do think that this summer may be a bit slower or more last minute and i def would not be buying cabins at this point. I do agree with you that the there is still more unravelling to go for sure. But there is a little too much fear mongering here i feelAaaaahhhh.....
When I do a basic search in the area for a very near term date, it says over 1k available....... Notice in top left of page, it says how many there is because it max's out the page count.
And that's looking less then 10 days ahead for booking.
And as I narrow in on Gatlinburg it comes just under 500
That's a lot, that's a hell of a lot of offerings....
You do realize all your doing is reinforcing Collins point, right?
I posted a huge inventory on 1 platform, and then you add a different platform showing a whole bunch of inventory. Reason stands that some of that on vrbo is not listed on airbnb which I showed, meaning even MORE available.......
You do know none of this is positive or optimistic signs for that STR market, right?
- Member since 2018 · 88 posts · 55 votes1y
Quote from @James Hamling:
Quote from @Yitzchok Carmen:
Quote from @James Hamling:
Quote from @Yitzchok Carmen:
Quote from @Collin Hays:
I did a quick check on VRBO for a McMansion cabin this weekend - Friday and Saturday only, 10 people, 4 bedrooms, 4 baths. There are over 50 pages of vacancies, which means there are hundreds of McMansion cabins available, for as little as $254 per night, including all fees and taxes. By my math, that would put actual nightly rent in the $130-150 range, on cabins that recently sold for between $1 and $2 million. At 10 guests, this works out to $13-15 per night per guest. That rivals Salvation Army.
No wonder my cute 1-bedroomer @ $90 sits empty.
Regarding home sales, I talked today to a well-connected realtor in the area, Phillip Derosia, who told me things are not moving at all, even with significant price cuts. He knew of a short sale just last week.
An interesting year this will shape up to be.
Im not sure why you are saying this. I just did the same search myself. June 6-8, 4BR and 4BA, 10 travelers. For the Gatlinburg PF area. Sorted to only show those rated 9+ (4.5, i think that is reasonable).
170 properties came up which, at 50 listing per page, is 3.5pages. Not 50. At the top it says
Gatlinburg - Pigeon Forge is popular!
Only 12% of properties are available on our site for your dates.
Only the first 10 properties listed come to under 900 with the fees for 2 nights which brings it to 450 per night.
I have 8 properties in the smokies and they are all booked for this weekend.
I do think that this summer may be a bit slower or more last minute and i def would not be buying cabins at this point. I do agree with you that the there is still more unravelling to go for sure. But there is a little too much fear mongering here i feelAaaaahhhh.....
When I do a basic search in the area for a very near term date, it says over 1k available....... Notice in top left of page, it says how many there is because it max's out the page count.
And that's looking less then 10 days ahead for booking.
And as I narrow in on Gatlinburg it comes just under 500
That's a lot, that's a hell of a lot of offerings....
You do realize all your doing is reinforcing Collins point, right?
I posted a huge inventory on 1 platform, and then you add a different platform showing a whole bunch of inventory. Reason stands that some of that on vrbo is not listed on airbnb which I showed, meaning even MORE available.......
You do know none of this is positive or optimistic signs for that STR market, right?
I am comparing apples to apples. You are comparing apples to oranges.
Colling made a statemnet in theoriginal post that is noyt accurate. That is all I am saying I am not debating that the STR market isnt great now. I live and breathe it daily.
- Member since 2018 · 88 posts · 55 votes1y
Quote from @Yitzchok Carmen:
Quote from @James Hamling:
Quote from @Yitzchok Carmen:
Quote from @James Hamling:
Quote from @Yitzchok Carmen:
Quote from @Collin Hays:
I did a quick check on VRBO for a McMansion cabin this weekend - Friday and Saturday only, 10 people, 4 bedrooms, 4 baths. There are over 50 pages of vacancies, which means there are hundreds of McMansion cabins available, for as little as $254 per night, including all fees and taxes. By my math, that would put actual nightly rent in the $130-150 range, on cabins that recently sold for between $1 and $2 million. At 10 guests, this works out to $13-15 per night per guest. That rivals Salvation Army.
No wonder my cute 1-bedroomer @ $90 sits empty.
Regarding home sales, I talked today to a well-connected realtor in the area, Phillip Derosia, who told me things are not moving at all, even with significant price cuts. He knew of a short sale just last week.
An interesting year this will shape up to be.
Im not sure why you are saying this. I just did the same search myself. June 6-8, 4BR and 4BA, 10 travelers. For the Gatlinburg PF area. Sorted to only show those rated 9+ (4.5, i think that is reasonable).
170 properties came up which, at 50 listing per page, is 3.5pages. Not 50. At the top it says
Gatlinburg - Pigeon Forge is popular!
Only 12% of properties are available on our site for your dates.
Only the first 10 properties listed come to under 900 with the fees for 2 nights which brings it to 450 per night.
I have 8 properties in the smokies and they are all booked for this weekend.
I do think that this summer may be a bit slower or more last minute and i def would not be buying cabins at this point. I do agree with you that the there is still more unravelling to go for sure. But there is a little too much fear mongering here i feelAaaaahhhh.....
When I do a basic search in the area for a very near term date, it says over 1k available....... Notice in top left of page, it says how many there is because it max's out the page count.
And that's looking less then 10 days ahead for booking.
And as I narrow in on Gatlinburg it comes just under 500
That's a lot, that's a hell of a lot of offerings....
You do realize all your doing is reinforcing Collins point, right?
I posted a huge inventory on 1 platform, and then you add a different platform showing a whole bunch of inventory. Reason stands that some of that on vrbo is not listed on airbnb which I showed, meaning even MORE available.......
You do know none of this is positive or optimistic signs for that STR market, right?
I am comparing apples to apples. You are comparing apples to oranges.
Colling made a statemnet in theoriginal post that is noyt accurate. That is all I am saying I am not debating that the STR market isnt great now. I live and breathe it daily.
I have been following Collin on here for literally years and always enjoy what he has to say. I read a lot and post a little. That doesn't mean I don't see the market myself or understand where things are
- Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes1y
Quote from @Yitzchok Carmen:
Quote from @James Hamling:
Quote from @Yitzchok Carmen:
Quote from @James Hamling:
Quote from @Yitzchok Carmen:
Quote from @Collin Hays:
I did a quick check on VRBO for a McMansion cabin this weekend - Friday and Saturday only, 10 people, 4 bedrooms, 4 baths. There are over 50 pages of vacancies, which means there are hundreds of McMansion cabins available, for as little as $254 per night, including all fees and taxes. By my math, that would put actual nightly rent in the $130-150 range, on cabins that recently sold for between $1 and $2 million. At 10 guests, this works out to $13-15 per night per guest. That rivals Salvation Army.
No wonder my cute 1-bedroomer @ $90 sits empty.
Regarding home sales, I talked today to a well-connected realtor in the area, Phillip Derosia, who told me things are not moving at all, even with significant price cuts. He knew of a short sale just last week.
An interesting year this will shape up to be.
Im not sure why you are saying this. I just did the same search myself. June 6-8, 4BR and 4BA, 10 travelers. For the Gatlinburg PF area. Sorted to only show those rated 9+ (4.5, i think that is reasonable).
170 properties came up which, at 50 listing per page, is 3.5pages. Not 50. At the top it says
Gatlinburg - Pigeon Forge is popular!
Only 12% of properties are available on our site for your dates.
Only the first 10 properties listed come to under 900 with the fees for 2 nights which brings it to 450 per night.
I have 8 properties in the smokies and they are all booked for this weekend.
I do think that this summer may be a bit slower or more last minute and i def would not be buying cabins at this point. I do agree with you that the there is still more unravelling to go for sure. But there is a little too much fear mongering here i feelAaaaahhhh.....
When I do a basic search in the area for a very near term date, it says over 1k available....... Notice in top left of page, it says how many there is because it max's out the page count.
And that's looking less then 10 days ahead for booking.
And as I narrow in on Gatlinburg it comes just under 500
That's a lot, that's a hell of a lot of offerings....
You do realize all your doing is reinforcing Collins point, right?
I posted a huge inventory on 1 platform, and then you add a different platform showing a whole bunch of inventory. Reason stands that some of that on vrbo is not listed on airbnb which I showed, meaning even MORE available.......
You do know none of this is positive or optimistic signs for that STR market, right?
I am comparing apples to apples. You are comparing apples to oranges.
Colling made a statemnet in theoriginal post that is noyt accurate. That is all I am saying I am not debating that the STR market isnt great now. I live and breathe it daily.
How is it apples to oranges?
You do know that guests don't give a rip who the management company or ownership is, right.
I get that you care, but all but no guests care at all.
I have never booked a place and said "ugh, but it's owned/ran by...." never, not once.
What it is, where it is, how much it is, that's all that matters to 99% of people.
- Member since 2018 · 88 posts · 55 votes1y
Quote from @James Hamling:
Quote from @Yitzchok Carmen:
Quote from @James Hamling:
Quote from @Yitzchok Carmen:
Quote from @James Hamling:
Quote from @Yitzchok Carmen:
Quote from @Collin Hays:
I did a quick check on VRBO for a McMansion cabin this weekend - Friday and Saturday only, 10 people, 4 bedrooms, 4 baths. There are over 50 pages of vacancies, which means there are hundreds of McMansion cabins available, for as little as $254 per night, including all fees and taxes. By my math, that would put actual nightly rent in the $130-150 range, on cabins that recently sold for between $1 and $2 million. At 10 guests, this works out to $13-15 per night per guest. That rivals Salvation Army.
No wonder my cute 1-bedroomer @ $90 sits empty.
Regarding home sales, I talked today to a well-connected realtor in the area, Phillip Derosia, who told me things are not moving at all, even with significant price cuts. He knew of a short sale just last week.
An interesting year this will shape up to be.
Im not sure why you are saying this. I just did the same search myself. June 6-8, 4BR and 4BA, 10 travelers. For the Gatlinburg PF area. Sorted to only show those rated 9+ (4.5, i think that is reasonable).
170 properties came up which, at 50 listing per page, is 3.5pages. Not 50. At the top it says
Gatlinburg - Pigeon Forge is popular!
Only 12% of properties are available on our site for your dates.
Only the first 10 properties listed come to under 900 with the fees for 2 nights which brings it to 450 per night.
I have 8 properties in the smokies and they are all booked for this weekend.
I do think that this summer may be a bit slower or more last minute and i def would not be buying cabins at this point. I do agree with you that the there is still more unravelling to go for sure. But there is a little too much fear mongering here i feelAaaaahhhh.....
When I do a basic search in the area for a very near term date, it says over 1k available....... Notice in top left of page, it says how many there is because it max's out the page count.
And that's looking less then 10 days ahead for booking.
And as I narrow in on Gatlinburg it comes just under 500
That's a lot, that's a hell of a lot of offerings....
You do realize all your doing is reinforcing Collins point, right?
I posted a huge inventory on 1 platform, and then you add a different platform showing a whole bunch of inventory. Reason stands that some of that on vrbo is not listed on airbnb which I showed, meaning even MORE available.......
You do know none of this is positive or optimistic signs for that STR market, right?
I am comparing apples to apples. You are comparing apples to oranges.
Colling made a statemnet in theoriginal post that is noyt accurate. That is all I am saying I am not debating that the STR market isnt great now. I live and breathe it daily.
How is it apples to oranges?
You do know that guests don't give a rip who the management company or ownership is, right.
I get that you care, but all but no guests care at all.
I have never booked a place and said "ugh, but it's owned/ran by...." never, not once.
What it is, where it is, how much it is, that's all that matters to 99% of people.
With all due respect you are just responding without knowing what you are responding to. Apples to apples is 4br 4ba sleeping 10 for this weekend.
Apples to oranges is all listings of any size or type in the smokies for the next 10 days
The management part was a sperate point
Read thw OP again pls
- Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes1y
Quote from @Yitzchok Carmen:
Quote from @James Hamling:
Quote from @Yitzchok Carmen:
Quote from @James Hamling:
Quote from @Yitzchok Carmen:
Quote from @James Hamling:
Quote from @Yitzchok Carmen:
Quote from @Collin Hays:
I did a quick check on VRBO for a McMansion cabin this weekend - Friday and Saturday only, 10 people, 4 bedrooms, 4 baths. There are over 50 pages of vacancies, which means there are hundreds of McMansion cabins available, for as little as $254 per night, including all fees and taxes. By my math, that would put actual nightly rent in the $130-150 range, on cabins that recently sold for between $1 and $2 million. At 10 guests, this works out to $13-15 per night per guest. That rivals Salvation Army.
No wonder my cute 1-bedroomer @ $90 sits empty.
Regarding home sales, I talked today to a well-connected realtor in the area, Phillip Derosia, who told me things are not moving at all, even with significant price cuts. He knew of a short sale just last week.
An interesting year this will shape up to be.
Im not sure why you are saying this. I just did the same search myself. June 6-8, 4BR and 4BA, 10 travelers. For the Gatlinburg PF area. Sorted to only show those rated 9+ (4.5, i think that is reasonable).
170 properties came up which, at 50 listing per page, is 3.5pages. Not 50. At the top it says
Gatlinburg - Pigeon Forge is popular!
Only 12% of properties are available on our site for your dates.
Only the first 10 properties listed come to under 900 with the fees for 2 nights which brings it to 450 per night.
I have 8 properties in the smokies and they are all booked for this weekend.
I do think that this summer may be a bit slower or more last minute and i def would not be buying cabins at this point. I do agree with you that the there is still more unravelling to go for sure. But there is a little too much fear mongering here i feelAaaaahhhh.....
When I do a basic search in the area for a very near term date, it says over 1k available....... Notice in top left of page, it says how many there is because it max's out the page count.
And that's looking less then 10 days ahead for booking.
And as I narrow in on Gatlinburg it comes just under 500
That's a lot, that's a hell of a lot of offerings....
You do realize all your doing is reinforcing Collins point, right?
I posted a huge inventory on 1 platform, and then you add a different platform showing a whole bunch of inventory. Reason stands that some of that on vrbo is not listed on airbnb which I showed, meaning even MORE available.......
You do know none of this is positive or optimistic signs for that STR market, right?
I am comparing apples to apples. You are comparing apples to oranges.
Colling made a statemnet in theoriginal post that is noyt accurate. That is all I am saying I am not debating that the STR market isnt great now. I live and breathe it daily.
How is it apples to oranges?
You do know that guests don't give a rip who the management company or ownership is, right.
I get that you care, but all but no guests care at all.
I have never booked a place and said "ugh, but it's owned/ran by...." never, not once.
What it is, where it is, how much it is, that's all that matters to 99% of people.
With all due respect you are just responding without knowing what you are responding to. Apples to apples is 4br 4ba sleeping 10 for this weekend.
Apples to oranges is all listings of any size or type in the smokies for the next 10 days
The management part was a sperate point
Read thw OP again pls
Yeah I was pretty clear sparky, that I did a BASIC search and found a HUGE amount of offerings available.
And apparently that has you all triggered and steaming. Sorry bud, I don't control reality in general just my own.
- Member since 2018 · 88 posts · 55 votes1y
Quote from @James Hamling:
Quote from @Yitzchok Carmen:
Quote from @James Hamling:
Quote from @Yitzchok Carmen:
Quote from @James Hamling:
Quote from @Yitzchok Carmen:
Quote from @James Hamling:
Quote from @Yitzchok Carmen:
Quote from @Collin Hays:
I did a quick check on VRBO for a McMansion cabin this weekend - Friday and Saturday only, 10 people, 4 bedrooms, 4 baths. There are over 50 pages of vacancies, which means there are hundreds of McMansion cabins available, for as little as $254 per night, including all fees and taxes. By my math, that would put actual nightly rent in the $130-150 range, on cabins that recently sold for between $1 and $2 million. At 10 guests, this works out to $13-15 per night per guest. That rivals Salvation Army.
No wonder my cute 1-bedroomer @ $90 sits empty.
Regarding home sales, I talked today to a well-connected realtor in the area, Phillip Derosia, who told me things are not moving at all, even with significant price cuts. He knew of a short sale just last week.
An interesting year this will shape up to be.
Im not sure why you are saying this. I just did the same search myself. June 6-8, 4BR and 4BA, 10 travelers. For the Gatlinburg PF area. Sorted to only show those rated 9+ (4.5, i think that is reasonable).
170 properties came up which, at 50 listing per page, is 3.5pages. Not 50. At the top it says
Gatlinburg - Pigeon Forge is popular!
Only 12% of properties are available on our site for your dates.
Only the first 10 properties listed come to under 900 with the fees for 2 nights which brings it to 450 per night.
I have 8 properties in the smokies and they are all booked for this weekend.
I do think that this summer may be a bit slower or more last minute and i def would not be buying cabins at this point. I do agree with you that the there is still more unravelling to go for sure. But there is a little too much fear mongering here i feelAaaaahhhh.....
When I do a basic search in the area for a very near term date, it says over 1k available....... Notice in top left of page, it says how many there is because it max's out the page count.
And that's looking less then 10 days ahead for booking.
And as I narrow in on Gatlinburg it comes just under 500
That's a lot, that's a hell of a lot of offerings....
You do realize all your doing is reinforcing Collins point, right?
I posted a huge inventory on 1 platform, and then you add a different platform showing a whole bunch of inventory. Reason stands that some of that on vrbo is not listed on airbnb which I showed, meaning even MORE available.......
You do know none of this is positive or optimistic signs for that STR market, right?
I am comparing apples to apples. You are comparing apples to oranges.
Colling made a statemnet in theoriginal post that is noyt accurate. That is all I am saying I am not debating that the STR market isnt great now. I live and breathe it daily.
How is it apples to oranges?
You do know that guests don't give a rip who the management company or ownership is, right.
I get that you care, but all but no guests care at all.
I have never booked a place and said "ugh, but it's owned/ran by...." never, not once.
What it is, where it is, how much it is, that's all that matters to 99% of people.
With all due respect you are just responding without knowing what you are responding to. Apples to apples is 4br 4ba sleeping 10 for this weekend.
Apples to oranges is all listings of any size or type in the smokies for the next 10 days
The management part was a sperate point
Read thw OP again pls
Yeah I was pretty clear sparky, that I did a BASIC search and found a HUGE amount of offerings available.
And apparently that has you all triggered and steaming. Sorry bud, I don't control reality in general just my own.
Dude you gotta chill out lol
- Member since 2018 · 88 posts · 55 votes1y
One more point which I think is important. From going through several of these 290 listings there are an awful lot which are managed by management companies:
Cabins for you
Evolve
Avstay
Timber Tops
Colonial Properties
Etc
I generally compare my places to the other self managers as I think that in general self managers get more booked. Saying this as someone who used Evolve personally at the beginning of my hosting career 6+ years ago and left them
- Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes1y
Quote from @Yitzchok Carmen:
One more point which I think is important. From going through several of these 290 listings there are an awful lot which are managed by management companies:
Cabins for you
Evolve
Avstay
Timber Tops
Colonial Properties
Etc
I generally compare my places to the other self managers as I think that in general self managers get more booked. Saying this as someone who used Evolve personally at the beginning of my hosting career 6+ years ago and left them
I don't follow your point, or logic.....
Your saying you only look at very specific inventory to get a gauge of the market? That's.... bizarre.
I mean.... Even if you know exactly how many of those there is, and track them like a hawk, it still means nothing if say some of those others do something that gobbles up market share where everyone starts booking with them and not the ones you track.
So you'd think there is no customers when there is, there just acting on ones you won't look at because they have some metric your biased against.
That just makes no sense to me at all.
Competition is competition, you have to keep vision of all competition even the ones you don't like ownership or management of, there still competing for the same guests as you.
- Member since 2018 · 88 posts · 55 votes1y
Quote from @James Hamling:
Quote from @Yitzchok Carmen:
One more point which I think is important. From going through several of these 290 listings there are an awful lot which are managed by management companies:
Cabins for you
Evolve
Avstay
Timber Tops
Colonial Properties
Etc
I generally compare my places to the other self managers as I think that in general self managers get more booked. Saying this as someone who used Evolve personally at the beginning of my hosting career 6+ years ago and left them
I don't follow your point, or logic.....
Your saying you only look at very specific inventory to get a gauge of the market? That's.... bizarre.
I mean.... Even if you know exactly how many of those there is, and track them like a hawk, it still means nothing if say some of those others do something that gobbles up market share where everyone starts booking with them and not the ones you track.
So you'd think there is no customers when there is, there just acting on ones you won't look at because they have some metric your biased against.
That just makes no sense to me at all.
Competition is competition, you have to keep vision of all competition even the ones you don't like ownership or management of, there still competing for the same guests as you.
Clearly you don't do STRs. Competition is not necessarily competition. Lets just leave it there
- Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes1y
Quote from @Yitzchok Carmen:
Quote from @James Hamling:
Quote from @Yitzchok Carmen:
One more point which I think is important. From going through several of these 290 listings there are an awful lot which are managed by management companies:
Cabins for you
Evolve
Avstay
Timber Tops
Colonial Properties
Etc
I generally compare my places to the other self managers as I think that in general self managers get more booked. Saying this as someone who used Evolve personally at the beginning of my hosting career 6+ years ago and left them
I don't follow your point, or logic.....
Your saying you only look at very specific inventory to get a gauge of the market? That's.... bizarre.
I mean.... Even if you know exactly how many of those there is, and track them like a hawk, it still means nothing if say some of those others do something that gobbles up market share where everyone starts booking with them and not the ones you track.
So you'd think there is no customers when there is, there just acting on ones you won't look at because they have some metric your biased against.
That just makes no sense to me at all.
Competition is competition, you have to keep vision of all competition even the ones you don't like ownership or management of, there still competing for the same guests as you.
Clearly you don't do STRs. Competition is not necessarily competition. Lets just leave it there
"Competition is not necessarily competition."
No, you need to make that make sense, because it doesn't make any sense.I get it that you got some big chip on your shoulder, but that doesn't make stupid ideas smart ones.
- Member since 2018 · 88 posts · 55 votes1y
Quote from @James Hamling:
Quote from @Yitzchok Carmen:
Quote from @James Hamling:
Quote from @Yitzchok Carmen:
One more point which I think is important. From going through several of these 290 listings there are an awful lot which are managed by management companies:
Cabins for you
Evolve
Avstay
Timber Tops
Colonial Properties
Etc
I generally compare my places to the other self managers as I think that in general self managers get more booked. Saying this as someone who used Evolve personally at the beginning of my hosting career 6+ years ago and left them
I don't follow your point, or logic.....
Your saying you only look at very specific inventory to get a gauge of the market? That's.... bizarre.
I mean.... Even if you know exactly how many of those there is, and track them like a hawk, it still means nothing if say some of those others do something that gobbles up market share where everyone starts booking with them and not the ones you track.
So you'd think there is no customers when there is, there just acting on ones you won't look at because they have some metric your biased against.
That just makes no sense to me at all.
Competition is competition, you have to keep vision of all competition even the ones you don't like ownership or management of, there still competing for the same guests as you.
Clearly you don't do STRs. Competition is not necessarily competition. Lets just leave it there
"Competition is not necessarily competition."
No, you need to make that make sense, because it doesn't make any sense.I get it that you got some big chip on your shoulder, but that doesn't make stupid ideas smart ones.
Theres no chip on my shoulder literally none. I just am sharing what I see vs what was posted. As for management companies, Self managers will almost always have better occupancy, and rates than the managemt companies. Self managers price better and smarter in advance. Therefore there will be more of them booked by now vs the big companies that are playing catch up now.Competion is a lot more than I have a house and you have a house. The strategies to get those houses booked mater just as much re competition. You are taking a micro view of this vs a macro view of this. Does that make sense?
- Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes1y
Quote from @Yitzchok Carmen:
Quote from @James Hamling:
Quote from @Yitzchok Carmen:
Quote from @James Hamling:
Quote from @Yitzchok Carmen:
One more point which I think is important. From going through several of these 290 listings there are an awful lot which are managed by management companies:
Cabins for you
Evolve
Avstay
Timber Tops
Colonial Properties
Etc
I generally compare my places to the other self managers as I think that in general self managers get more booked. Saying this as someone who used Evolve personally at the beginning of my hosting career 6+ years ago and left them
I don't follow your point, or logic.....
Your saying you only look at very specific inventory to get a gauge of the market? That's.... bizarre.
I mean.... Even if you know exactly how many of those there is, and track them like a hawk, it still means nothing if say some of those others do something that gobbles up market share where everyone starts booking with them and not the ones you track.
So you'd think there is no customers when there is, there just acting on ones you won't look at because they have some metric your biased against.
That just makes no sense to me at all.
Competition is competition, you have to keep vision of all competition even the ones you don't like ownership or management of, there still competing for the same guests as you.
Clearly you don't do STRs. Competition is not necessarily competition. Lets just leave it there
"Competition is not necessarily competition."
No, you need to make that make sense, because it doesn't make any sense.I get it that you got some big chip on your shoulder, but that doesn't make stupid ideas smart ones.
Theres no chip on my shoulder literally none. I just am sharing what I see vs what was posted. As for management companies, Self managers will almost always have better occupancy, and rates than the managemt companies. Self managers price better and smarter in advance. Therefore there will be more of them booked by now vs the big companies that are playing catch up now.Competion is a lot more than I have a house and you have a house. The strategies to get those houses booked mater just as much re competition. You are taking a micro view of this vs a macro view of this. Does that make sense?
No.... It doesn't make sense. I was talking macro and you were talking micro....
I have experienced the opposite with self-managing. That most self-managed under perform due to the lack of quality in listing, marketing, responsiveness etc etc because most self-managing are not professional.
And most professionally managed are, well, professional.
Now those self-managing that are professional, there often the few rock stars. They seem to kick everyone's butt. And deservedly so.
Look, competition comes in different varieties of offerings but competition is still competition no matter how poor or excellent of quality it is. Super-8 is still a competitor to Hilton regardless of there sub-par offering to them. Hilton does not live in ignorance of what Super-8 is doing. That's why and how Hilton keeps there competitive advantages to Super-8.
Follow?
Just because other STR listings are lessor in whatever degree does not mean ignore them. No, keep tab's on them, keep ahead of em, there good proof-of-concept in what not to do and how _xyz_ action/offering produces _xyz_ positive results.
- Member since 2018 · 88 posts · 55 votes1y
Quote from @James Hamling:
Quote from @Yitzchok Carmen:
Quote from @James Hamling:
Quote from @Yitzchok Carmen:
Quote from @James Hamling:
Quote from @Yitzchok Carmen:
One more point which I think is important. From going through several of these 290 listings there are an awful lot which are managed by management companies:
Cabins for you
Evolve
Avstay
Timber Tops
Colonial Properties
Etc
I generally compare my places to the other self managers as I think that in general self managers get more booked. Saying this as someone who used Evolve personally at the beginning of my hosting career 6+ years ago and left them
I don't follow your point, or logic.....
Your saying you only look at very specific inventory to get a gauge of the market? That's.... bizarre.
I mean.... Even if you know exactly how many of those there is, and track them like a hawk, it still means nothing if say some of those others do something that gobbles up market share where everyone starts booking with them and not the ones you track.
So you'd think there is no customers when there is, there just acting on ones you won't look at because they have some metric your biased against.
That just makes no sense to me at all.
Competition is competition, you have to keep vision of all competition even the ones you don't like ownership or management of, there still competing for the same guests as you.
Clearly you don't do STRs. Competition is not necessarily competition. Lets just leave it there
"Competition is not necessarily competition."
No, you need to make that make sense, because it doesn't make any sense.I get it that you got some big chip on your shoulder, but that doesn't make stupid ideas smart ones.
Theres no chip on my shoulder literally none. I just am sharing what I see vs what was posted. As for management companies, Self managers will almost always have better occupancy, and rates than the managemt companies. Self managers price better and smarter in advance. Therefore there will be more of them booked by now vs the big companies that are playing catch up now.Competion is a lot more than I have a house and you have a house. The strategies to get those houses booked mater just as much re competition. You are taking a micro view of this vs a macro view of this. Does that make sense?
No.... It doesn't make sense. I was talking macro and you were talking micro....
I have experienced the opposite with self-managing. That most self-managed under perform due to the lack of quality in listing, marketing, responsiveness etc etc because most self-managing are not professional.
And most professionally managed are, well, professional.
Now those self-managing that are professional, there often the few rock stars. They seem to kick everyone's butt. And deservedly so.
Look, competition comes in different varieties of offerings but competition is still competition no matter how poor or excellent of quality it is. Super-8 is still a competitor to Hilton regardless of there sub-par offering to them. Hilton does not live in ignorance of what Super-8 is doing. That's why and how Hilton keeps there competitive advantages to Super-8.
Follow?
Just because other STR listings are lessor in whatever degree does not mean ignore them. No, keep tab's on them, keep ahead of em, there good proof-of-concept in what not to do and how _xyz_ action/offering produces _xyz_ positive results.
Look in your market this may be the case. In the Smokies, typically its not. Most self managers have gotten quite good at it and do a better job in pricing, customer service etc. Sometimes even dumb things like good photos are missing in pro listings. I guess good self managers here are common! Look at the lowest rated places in the Smokies on airbnb/ VRBO, almost always its from a professional company and not a self manager. Nobody cares more about your property than you do
- 1yJohn UnderwoodPro MemberInvestor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votesThere are good and bad self managers and PM's.
Quote from @Yitzchok Carmen:
Quote from @James Hamling:
Quote from @Yitzchok Carmen:
Quote from @James Hamling:
Quote from @Yitzchok Carmen:
One more point which I think is important. From going through several of these 290 listings there are an awful lot which are managed by management companies:
Cabins for you
Evolve
Avstay
Timber Tops
Colonial Properties
Etc
I generally compare my places to the other self managers as I think that in general self managers get more booked. Saying this as someone who used Evolve personally at the beginning of my hosting career 6+ years ago and left them
I don't follow your point, or logic.....
Your saying you only look at very specific inventory to get a gauge of the market? That's.... bizarre.
I mean.... Even if you know exactly how many of those there is, and track them like a hawk, it still means nothing if say some of those others do something that gobbles up market share where everyone starts booking with them and not the ones you track.
So you'd think there is no customers when there is, there just acting on ones you won't look at because they have some metric your biased against.
That just makes no sense to me at all.
Competition is competition, you have to keep vision of all competition even the ones you don't like ownership or management of, there still competing for the same guests as you.
Clearly you don't do STRs. Competition is not necessarily competition. Lets just leave it there
"Competition is not necessarily competition."
No, you need to make that make sense, because it doesn't make any sense.I get it that you got some big chip on your shoulder, but that doesn't make stupid ideas smart ones.
Theres no chip on my shoulder literally none. I just am sharing what I see vs what was posted. As for management companies, Self managers will almost always have better occupancy, and rates than the managemt companies. Self managers price better and smarter in advance. Therefore there will be more of them booked by now vs the big companies that are playing catch up now.Competion is a lot more than I have a house and you have a house. The strategies to get those houses booked mater just as much re competition. You are taking a micro view of this vs a macro view of this. Does that make sense?
Self managers have about a 30% advantage out of the gate though.
- Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes1y
I just got off the phone with a self manager who paid $810K for his cabin in May of 2023 and is listing it soon for $650K. His realtor advised him to get out now.
- Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes1y
Quote from @Collin Hays:
I just got off the phone with a self manager who paid $810K for his cabin in May of 2023 and is listing it soon for $650K. His realtor advised him to get out now.
I'd be very interested to see if this happens as 1-off's and get absorbed..... which I doubt.
Or if/when it is the match that ignites a rush to exit the falling knife....
Thing is, you know agents will be calling in ever increasing volume to convey the message and facilitate a rush to the exit....
I'm a buyer.... right about the time everyone's running around with their hair on fire or sobbing in the corner. Hey, don't hate me because I'm smart.
- Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes1y
Quote from @James Hamling:
Quote from @Collin Hays:
I just got off the phone with a self manager who paid $810K for his cabin in May of 2023 and is listing it soon for $650K. His realtor advised him to get out now.
It's not a 1-off. Values are going to fall 50-60 percent from 2022 peak before we reach bottom. I lived through this in 2008-2010. I bought my first Smokies property in 2005, and by 2010, it was worth half what I paid. The values will fall until they are a traditional multiple of annual rents - about 7X annual rents.
This time is NOT different.
As for agents, the most reliable agent in that region, Darlene Derosia, says that nothing is moving, regardless of the discount.
Quote from @Collin Hays:
Quote from @James Hamling:
Quote from @Collin Hays:
I just got off the phone with a self manager who paid $810K for his cabin in May of 2023 and is listing it soon for $650K. His realtor advised him to get out now.
It's not a 1-off. Values are going to fall 50-60 percent from 2022 peak before we reach bottom. I lived through this in 2008-2010. I bought my first Smokies property in 2005, and by 2010, it was worth half what I paid. The values will fall until they are a traditional multiple of annual rents - about 7X annual rents.
This time is NOT different.
As for agents, the most reliable agent in that region, Darlene Derosia, says that nothing is moving, regardless of the discount.
My San Diego STRs fell 30% to 40% in value at the GFC, but booking revenue fell more.. We transitioned to student housing during the school year and STR for the summer.
you and I both tried to correct the statement from the STR couple gurus about drive to STR destinations being recession proof. They had never been through a recession as STR operators. This is not even a recession.My market, if judged by my STRs, is better than the last 2 years. 2020 & 2021 my market was impacted by Covid shutdowns (not allowed to rent at different times of the year). However, I know that the market s not a sure thing. A recession will impact my STR revenue.
Good luck, I hoping the bookings increase such that the market avoids a huge loss in value
- 1yJohn UnderwoodPro MemberInvestor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
Quote from @Collin Hays:
Quote from @James Hamling:
Quote from @Collin Hays:
I just got off the phone with a self manager who paid $810K for his cabin in May of 2023 and is listing it soon for $650K. His realtor advised him to get out now.
It's not a 1-off. Values are going to fall 50-60 percent from 2022 peak before we reach bottom. I lived through this in 2008-2010. I bought my first Smokies property in 2005, and by 2010, it was worth half what I paid. The values will fall until they are a traditional multiple of annual rents - about 7X annual rents.
This time is NOT different.
As for agents, the most reliable agent in that region, Darlene Derosia, says that nothing is moving, regardless of the discount.
What's this first property worth today? I'm sure a lot more than you paid for it even if you don't own it anymore.
- 1yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Collin Hays:
I just got off the phone with a self manager who paid $810K for his cabin in May of 2023 and is listing it soon for $650K. His realtor advised him to get out now.
same thing happens in build to rent subdivisions.. values only track rental income as there are no owner occ's going to pay a premium to live with a development full of renters. So it appears the ONLY buyers are investors and not owner user who dont care what the income is ?
so now buyers are just running these at cash flow props.. And I suspect lenders will only lend on cash flow DCR as well ?? again just spit ballin.. - Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes1y
Quote from @John Underwood:
Quote from @Collin Hays:
Quote from @James Hamling:
Quote from @Collin Hays:
I just got off the phone with a self manager who paid $810K for his cabin in May of 2023 and is listing it soon for $650K. His realtor advised him to get out now.
It's not a 1-off. Values are going to fall 50-60 percent from 2022 peak before we reach bottom. I lived through this in 2008-2010. I bought my first Smokies property in 2005, and by 2010, it was worth half what I paid. The values will fall until they are a traditional multiple of annual rents - about 7X annual rents.
This time is NOT different.
As for agents, the most reliable agent in that region, Darlene Derosia, says that nothing is moving, regardless of the discount.
What's this first property worth today? I'm sure a lot more than you paid for it even if you don't own it anymore.
I would guess twice what I paid if I sold it today.
- 1yJohn UnderwoodPro MemberInvestor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
Quote from @Collin Hays:
Quote from @John Underwood:
Quote from @Collin Hays:
Quote from @James Hamling:
Quote from @Collin Hays:
I just got off the phone with a self manager who paid $810K for his cabin in May of 2023 and is listing it soon for $650K. His realtor advised him to get out now.
It's not a 1-off. Values are going to fall 50-60 percent from 2022 peak before we reach bottom. I lived through this in 2008-2010. I bought my first Smokies property in 2005, and by 2010, it was worth half what I paid. The values will fall until they are a traditional multiple of annual rents - about 7X annual rents.
This time is NOT different.
As for agents, the most reliable agent in that region, Darlene Derosia, says that nothing is moving, regardless of the discount.
What's this first property worth today? I'm sure a lot more than you paid for it even if you don't own it anymore.
I would guess $450K if I had to sell it today.
What did you originally pay for it?
- Member since 2018 · 88 posts · 55 votes1y
Quote from @Collin Hays:
Quote from @James Hamling:
Quote from @Collin Hays:
I just got off the phone with a self manager who paid $810K for his cabin in May of 2023 and is listing it soon for $650K. His realtor advised him to get out now.
It's not a 1-off. Values are going to fall 50-60 percent from 2022 peak before we reach bottom. I lived through this in 2008-2010. I bought my first Smokies property in 2005, and by 2010, it was worth half what I paid. The values will fall until they are a traditional multiple of annual rents - about 7X annual rents.
This time is NOT different.
As for agents, the most reliable agent in that region, Darlene Derosia, says that nothing is moving, regardless of the discount.
In my experience with my places
2brs gross about 70-80k
3brs gross 70-90k
4brs gross 90-105k
This is average over the last 5 years. They are nice places but nothing with that amenity that cant be purchased at Lowes. No views, no waterside. They are great locations though
If you think it will bottom out at 7x rents
2BR would sell for 490-560k
3BRs would sell for 490-630k
4Brs would sell for 630-735k
It seems like we are already seeing prices at pretty much these points, no?
When I started buying in early 2019 you could get a 2BR is Sky Harbor that would gross about 50k for 250k which is 5x rents.
Do you think we may see that again? Esp bc costs of cleaning etc have risen since then
- Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes1y
Quote from @John Underwood:
Quote from @Collin Hays:
Quote from @John Underwood:
Quote from @Collin Hays:
Quote from @James Hamling:
Quote from @Collin Hays:
I just got off the phone with a self manager who paid $810K for his cabin in May of 2023 and is listing it soon for $650K. His realtor advised him to get out now.
It's not a 1-off. Values are going to fall 50-60 percent from 2022 peak before we reach bottom. I lived through this in 2008-2010. I bought my first Smokies property in 2005, and by 2010, it was worth half what I paid. The values will fall until they are a traditional multiple of annual rents - about 7X annual rents.
This time is NOT different.
As for agents, the most reliable agent in that region, Darlene Derosia, says that nothing is moving, regardless of the discount.
What's this first property worth today? I'm sure a lot more than you paid for it even if you don't own it anymore.
I would guess $450K if I had to sell it today.
What did you originally pay for it?
$240K
- Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes1y
Quote from @Yitzchok Carmen:
Quote from @Collin Hays:
Quote from @James Hamling:
Quote from @Collin Hays:
I just got off the phone with a self manager who paid $810K for his cabin in May of 2023 and is listing it soon for $650K. His realtor advised him to get out now.
It's not a 1-off. Values are going to fall 50-60 percent from 2022 peak before we reach bottom. I lived through this in 2008-2010. I bought my first Smokies property in 2005, and by 2010, it was worth half what I paid. The values will fall until they are a traditional multiple of annual rents - about 7X annual rents.
This time is NOT different.
As for agents, the most reliable agent in that region, Darlene Derosia, says that nothing is moving, regardless of the discount.
In my experience with my places
2brs gross about 70-80k
3brs gross 70-90k
4brs gross 90-105k
This is average over the last 5 years. They are nice places but nothing with that amenity that cant be purchased at Lowes. No views, no waterside. They are great locations though
If you think it will bottom out at 7x rents
2BR would sell for 490-560k
3BRs would sell for 490-630k
4Brs would sell for 630-735k
It seems like we are already seeing prices at pretty much these points, no?
When I started buying in early 2019 you could get a 2BR is Sky Harbor that would gross about 50k for 250k which is 5x rents.
Do you think we may see that again? Esp bc costs of cleaning etc have risen since then
I haven't been doing the math on current listings, but once we hit a 7X annual rents threshold, things should start to pick up.
- Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes1y
Quote from @Yitzchok Carmen:
Quote from @Collin Hays:
Quote from @James Hamling:
Quote from @Collin Hays:
I just got off the phone with a self manager who paid $810K for his cabin in May of 2023 and is listing it soon for $650K. His realtor advised him to get out now.
It's not a 1-off. Values are going to fall 50-60 percent from 2022 peak before we reach bottom. I lived through this in 2008-2010. I bought my first Smokies property in 2005, and by 2010, it was worth half what I paid. The values will fall until they are a traditional multiple of annual rents - about 7X annual rents.
This time is NOT different.
As for agents, the most reliable agent in that region, Darlene Derosia, says that nothing is moving, regardless of the discount.
In my experience with my places
2brs gross about 70-80k
3brs gross 70-90k
4brs gross 90-105k
This is average over the last 5 years. They are nice places but nothing with that amenity that cant be purchased at Lowes. No views, no waterside. They are great locations though
If you think it will bottom out at 7x rents
2BR would sell for 490-560k
3BRs would sell for 490-630k
4Brs would sell for 630-735k
It seems like we are already seeing prices at pretty much these points, no?
When I started buying in early 2019 you could get a 2BR is Sky Harbor that would gross about 50k for 250k which is 5x rents.
Do you think we may see that again? Esp bc costs of cleaning etc have risen since then
What your saying here is for your "plane Jane" nothing special, no special amenities, views, furnishings etc your average was/is:
Rented 365 days per year……
2brs - $1,442.31 week / $206.04 per day
3brs - $1,538.46 week / $220 per day
4brs - $1,875.00 week / $267.86 per day
The average occupancy rate for short-term rentals in Gatlinburg is 65% according to Airbtics.
Which makes for 33.8 weeks or 237 days, equaling:
2brs - $2,218.93 week / $316.46 per day
3brs - $2,366.86 week / $337.55 per day
4brs - $2,884.62 week / $411.39 per day
Now the problem with all this is 2024's average occupancy rate was 61%. And we are now seeing it lower at 57%:
And when we look at everything together it all makes sense, seeing just how much inventory has been added in even just the last year alone:
So it's no surprise that when I do a search of current offerings I see amazing properties with fantastic views, amenity loaded, properties offering a heck of a lot more than a roof over the head..... Priced BELOW your stated numbers....
This isn't shocking. It's a natural action of the supply demand curve in action.
Or the "competition that isn't really competition" as you put it, effecting the market because reality is competition IS competition.
And more hands competing for the same dollars, drives DOWN prices and UP quality of offerings.
This is economics 101.
So the whole notion of using yester-markets average revenues to justify a today price is no kosher.
You can't even use in-the-now revenues per say because all indicators is the market is a falling knife.
You have to project forward to the market stabilization point.
As the market declines competitors will UP there offerings and LOWER prices. This becomes a cyclical happening as it drives other competitors to do the same to match and exceed those setting the market at the time. In terms of pricing we call this a "Race To The Bottom".
Somewhere in this operators start exiting, removing inventory and competition.
The question to it all is VELOCITY. Which factor gains what velocity.
Most often the exit is an action of the few and rare, while most select denial and only exit after a long painful bleed-out. So generally the race to the bottom gains the velocity of power and the removal of inventory trails.
Once enough inventory is removed, stabilization comes into the scene.
And since many live in denial and inventory only get's removed through going bust, there is often a rubber-band effect to stabilization.
It's the few who often survive this roller coaster. And a common trait is they were NOT living in denial at any point, they were usually those most hyper aware, and they choose intentionally to ride it all out and through. They don't make it via chance but instead via preparation.
And the many who got bleed dry and out in the end..... They sing the song of "I knew it, if I only held on another _____ months" but no, that's a lie to make self feel better. Because if all the inventory held on the decline would have kept running. It was removal of inventory that made the recovery.
Who are these folks who live in denial and get bleed dry, loosing it all? Most often the vast majority is the self-managed, the non-professional. There means are more limited as is there comprehension of markets, economics, and access to capitol.
Who knows, maybe everything will be a-ok, I'm no expert on the Smokies. But I am an expert on market economics and analysis as it relates to real estate, and this is looking like a loaded gun in the earliest phases of correction.
Boom - Bust cycle. Very normal standard stuff really.
- Member since 2018 · 88 posts · 55 votes1y
Quote from @James Hamling:
Quote from @Yitzchok Carmen:
Quote from @Collin Hays:
Quote from @James Hamling:
Quote from @Collin Hays:
I just got off the phone with a self manager who paid $810K for his cabin in May of 2023 and is listing it soon for $650K. His realtor advised him to get out now.
It's not a 1-off. Values are going to fall 50-60 percent from 2022 peak before we reach bottom. I lived through this in 2008-2010. I bought my first Smokies property in 2005, and by 2010, it was worth half what I paid. The values will fall until they are a traditional multiple of annual rents - about 7X annual rents.
This time is NOT different.
As for agents, the most reliable agent in that region, Darlene Derosia, says that nothing is moving, regardless of the discount.
In my experience with my places
2brs gross about 70-80k
3brs gross 70-90k
4brs gross 90-105k
This is average over the last 5 years. They are nice places but nothing with that amenity that cant be purchased at Lowes. No views, no waterside. They are great locations though
If you think it will bottom out at 7x rents
2BR would sell for 490-560k
3BRs would sell for 490-630k
4Brs would sell for 630-735k
It seems like we are already seeing prices at pretty much these points, no?
When I started buying in early 2019 you could get a 2BR is Sky Harbor that would gross about 50k for 250k which is 5x rents.
Do you think we may see that again? Esp bc costs of cleaning etc have risen since then
What your saying here is for your "plane Jane" nothing special, no special amenities, views, furnishings etc your average was/is:
Rented 365 days per year……
2brs - $1,442.31 week / $206.04 per day
3brs - $1,538.46 week / $220 per day
4brs - $1,875.00 week / $267.86 per day
The average occupancy rate for short-term rentals in Gatlinburg is 65% according to Airbtics.
Which makes for 33.8 weeks or 237 days, equaling:
2brs - $2,218.93 week / $316.46 per day
3brs - $2,366.86 week / $337.55 per day
4brs - $2,884.62 week / $411.39 per day
Now the problem with all this is 2024's average occupancy rate was 61%. And we are now seeing it lower at 57%:
And when we look at everything together it all makes sense, seeing just how much inventory has been added in even just the last year alone:
So it's no surprise that when I do a search of current offerings I see amazing properties with fantastic views, amenity loaded, properties offering a heck of a lot more than a roof over the head..... Priced BELOW your stated numbers....
This isn't shocking. It's a natural action of the supply demand curve in action.
Or the "competition that isn't really competition" as you put it, effecting the market because reality is competition IS competition.
And more hands competing for the same dollars, drives DOWN prices and UP quality of offerings.
This is economics 101.
So the whole notion of using yester-markets average revenues to justify a today price is no kosher.
You can't even use in-the-now revenues per say because all indicators is the market is a falling knife.
You have to project forward to the market stabilization point.
As the market declines competitors will UP there offerings and LOWER prices. This becomes a cyclical happening as it drives other competitors to do the same to match and exceed those setting the market at the time. In terms of pricing we call this a "Race To The Bottom".
Somewhere in this operators start exiting, removing inventory and competition.
The question to it all is VELOCITY. Which factor gains what velocity.
Most often the exit is an action of the few and rare, while most select denial and only exit after a long painful bleed-out. So generally the race to the bottom gains the velocity of power and the removal of inventory trails.
Once enough inventory is removed, stabilization comes into the scene.
And since many live in denial and inventory only get's removed through going bust, there is often a rubber-band effect to stabilization.
It's the few who often survive this roller coaster. And a common trait is they were NOT living in denial at any point, they were usually those most hyper aware, and they choose intentionally to ride it all out and through. They don't make it via chance but instead via preparation.
And the many who got bleed dry and out in the end..... They sing the song of "I knew it, if I only held on another _____ months" but no, that's a lie to make self feel better. Because if all the inventory held on the decline would have kept running. It was removal of inventory that made the recovery.
Who are these folks who live in denial and get bleed dry, loosing it all? Most often the vast majority is the self-managed, the non-professional. There means are more limited as is there comprehension of markets, economics, and access to capitol.
Who knows, maybe everything will be a-ok, I'm no expert on the Smokies. But I am an expert on market economics and analysis as it relates to real estate, and this is looking like a loaded gun in the earliest phases of correction.
Boom - Bust cycle. Very normal standard stuff really.
You are correct generally with your view of things. And I may be wrong. However again, there is more nuance in it than just what you are posting as an outsider. And I am def not in denial, I have been working on my places for the last year to get more bookings. What you call a "Professional manager" is also not so black and white like you think. You can feel free to PM me if you really care that much and I would be more than happy to discuss. I don't want to hijack this thread any longer with this
- Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes1y
Quote from @Yitzchok Carmen:
Quote from @James Hamling:
Quote from @Yitzchok Carmen:
Quote from @Collin Hays:
Quote from @James Hamling:
Quote from @Collin Hays:
I just got off the phone with a self manager who paid $810K for his cabin in May of 2023 and is listing it soon for $650K. His realtor advised him to get out now.
It's not a 1-off. Values are going to fall 50-60 percent from 2022 peak before we reach bottom. I lived through this in 2008-2010. I bought my first Smokies property in 2005, and by 2010, it was worth half what I paid. The values will fall until they are a traditional multiple of annual rents - about 7X annual rents.
This time is NOT different.
As for agents, the most reliable agent in that region, Darlene Derosia, says that nothing is moving, regardless of the discount.
In my experience with my places
2brs gross about 70-80k
3brs gross 70-90k
4brs gross 90-105k
This is average over the last 5 years. They are nice places but nothing with that amenity that cant be purchased at Lowes. No views, no waterside. They are great locations though
If you think it will bottom out at 7x rents
2BR would sell for 490-560k
3BRs would sell for 490-630k
4Brs would sell for 630-735k
It seems like we are already seeing prices at pretty much these points, no?
When I started buying in early 2019 you could get a 2BR is Sky Harbor that would gross about 50k for 250k which is 5x rents.
Do you think we may see that again? Esp bc costs of cleaning etc have risen since then
What your saying here is for your "plane Jane" nothing special, no special amenities, views, furnishings etc your average was/is:
Rented 365 days per year……
2brs - $1,442.31 week / $206.04 per day
3brs - $1,538.46 week / $220 per day
4brs - $1,875.00 week / $267.86 per day
The average occupancy rate for short-term rentals in Gatlinburg is 65% according to Airbtics.
Which makes for 33.8 weeks or 237 days, equaling:
2brs - $2,218.93 week / $316.46 per day
3brs - $2,366.86 week / $337.55 per day
4brs - $2,884.62 week / $411.39 per day
Now the problem with all this is 2024's average occupancy rate was 61%. And we are now seeing it lower at 57%:
And when we look at everything together it all makes sense, seeing just how much inventory has been added in even just the last year alone:
So it's no surprise that when I do a search of current offerings I see amazing properties with fantastic views, amenity loaded, properties offering a heck of a lot more than a roof over the head..... Priced BELOW your stated numbers....
This isn't shocking. It's a natural action of the supply demand curve in action.
Or the "competition that isn't really competition" as you put it, effecting the market because reality is competition IS competition.
And more hands competing for the same dollars, drives DOWN prices and UP quality of offerings.
This is economics 101.
So the whole notion of using yester-markets average revenues to justify a today price is no kosher.
You can't even use in-the-now revenues per say because all indicators is the market is a falling knife.
You have to project forward to the market stabilization point.
As the market declines competitors will UP there offerings and LOWER prices. This becomes a cyclical happening as it drives other competitors to do the same to match and exceed those setting the market at the time. In terms of pricing we call this a "Race To The Bottom".
Somewhere in this operators start exiting, removing inventory and competition.
The question to it all is VELOCITY. Which factor gains what velocity.
Most often the exit is an action of the few and rare, while most select denial and only exit after a long painful bleed-out. So generally the race to the bottom gains the velocity of power and the removal of inventory trails.
Once enough inventory is removed, stabilization comes into the scene.
And since many live in denial and inventory only get's removed through going bust, there is often a rubber-band effect to stabilization.
It's the few who often survive this roller coaster. And a common trait is they were NOT living in denial at any point, they were usually those most hyper aware, and they choose intentionally to ride it all out and through. They don't make it via chance but instead via preparation.
And the many who got bleed dry and out in the end..... They sing the song of "I knew it, if I only held on another _____ months" but no, that's a lie to make self feel better. Because if all the inventory held on the decline would have kept running. It was removal of inventory that made the recovery.
Who are these folks who live in denial and get bleed dry, loosing it all? Most often the vast majority is the self-managed, the non-professional. There means are more limited as is there comprehension of markets, economics, and access to capitol.
Who knows, maybe everything will be a-ok, I'm no expert on the Smokies. But I am an expert on market economics and analysis as it relates to real estate, and this is looking like a loaded gun in the earliest phases of correction.
Boom - Bust cycle. Very normal standard stuff really.
You are correct generally with your view of things. And I may be wrong. However again, there is more nuance in it than just what you are posting as an outsider. And I am def not in denial, I have been working on my places for the last year to get more bookings. What you call a "Professional manager" is also not so black and white like you think. You can feel free to PM me if you really care that much and I would be more than happy to discuss. I don't want to hijack this thread any longer with this
Look I am not sure what your on about with the whole "Professional manager" thing.
The only distinction I make is between Professional and NON-Professional.
There 100% is Management Companies who are BOTH professional and NON-professional. Just as there is self managed that are both professional and NON-professional.
Generally speaking most management companies are professional, and most self-managed are non-professional. And there listings most often reflect this.
For example this listing by "Greg" which despite doing it for many years, it kind of screams non-professional.
The photos are.... well there kuk. It does not visually inspire, or tell much of a story. The details leave more to wonder than it explains. It feels lack luster and novice to say the least.
As does this one that yells "hey, I'm 4 walls and a roof, you could sleep here".....
Vs this one here that "POW" knocks it out of the park! They are selling it Selling It SELLING IT. In the headline, in the photos, in the details there painting a picture of an EXPERIENCE and selling it well. There reviews speak volumes. They obviously are systematically doing this and are Professionals.
And look at this one, nailing it! This looks like it may be one of those big companies but come one, that listing grabs you and says THIS IS THE ONE! They are selling me the experience so much here!
Those who know me know I am the travel diva, I am, the wife is Mrs Top-Shelf but I am the Gordon Ramsey of travel. When I just want 4 walls and a roof I go to the Hilton. I'm old, I've earned it, I'm not some 30-something whipper-snapper anymore so I'm done with super-8's. But when I want an EXPERIENCE I got STR. I want and expect an experience, I want to feel it, live it, I want to be setup for success.
And your listing get's all of 4 seconds to convince me that your that vehicle to my expected experience.
Professionals get this.
My book in experience is regimented and seamless especially if have any issue along the way.
When I arrive it's as if you expected me. I find a guide of tips and things to do. No not a stack of brochures from the local biz association but something of yours, specific to this property and this local. Love it.
Again, professionals get this and deliver.
It's no 1 metric that makes a professional or non-professional, it has nothing to do with LLC or c-corp, it has to do with being a professional hospitality operation or some schmoe offering a place to stay.
- Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes1y
Quote from @Collin Hays:
Quote from @Yitzchok Carmen:
Quote from @Collin Hays:
Quote from @James Hamling:
Quote from @Collin Hays:
I just got off the phone with a self manager who paid $810K for his cabin in May of 2023 and is listing it soon for $650K. His realtor advised him to get out now.
It's not a 1-off. Values are going to fall 50-60 percent from 2022 peak before we reach bottom. I lived through this in 2008-2010. I bought my first Smokies property in 2005, and by 2010, it was worth half what I paid. The values will fall until they are a traditional multiple of annual rents - about 7X annual rents.
This time is NOT different.
As for agents, the most reliable agent in that region, Darlene Derosia, says that nothing is moving, regardless of the discount.
In my experience with my places
2brs gross about 70-80k
3brs gross 70-90k
4brs gross 90-105k
This is average over the last 5 years. They are nice places but nothing with that amenity that cant be purchased at Lowes. No views, no waterside. They are great locations though
If you think it will bottom out at 7x rents
2BR would sell for 490-560k
3BRs would sell for 490-630k
4Brs would sell for 630-735k
It seems like we are already seeing prices at pretty much these points, no?
When I started buying in early 2019 you could get a 2BR is Sky Harbor that would gross about 50k for 250k which is 5x rents.
Do you think we may see that again? Esp bc costs of cleaning etc have risen since then
I haven't been doing the math on current listings, but once we hit a 7X annual rents threshold, things should start to pick up.
Collin, do you happen to know or have the metrics of the pre-covid booking tourism #'s in the area? And of what the inventory count was at that time.
Something that could be utilized for a projection of expected traffic and market distribution going forward?
With that one could peg scenarios for how deep things could go and where potential bottom would be.
- Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes1yThat one is really hard, because several thousand homes were lost in the Gatlinburg fire in 2016. That reconstruction boom was the first jolt of adrenaline for the area, augmented by super low interest rates and then all of the COVID money.
Quote from @James Hamling:
Quote from @Collin Hays:
Quote from @Yitzchok Carmen:
Quote from @Collin Hays:
Quote from @James Hamling:
Quote from @Collin Hays:
I just got off the phone with a self manager who paid $810K for his cabin in May of 2023 and is listing it soon for $650K. His realtor advised him to get out now.
It's not a 1-off. Values are going to fall 50-60 percent from 2022 peak before we reach bottom. I lived through this in 2008-2010. I bought my first Smokies property in 2005, and by 2010, it was worth half what I paid. The values will fall until they are a traditional multiple of annual rents - about 7X annual rents.
This time is NOT different.
As for agents, the most reliable agent in that region, Darlene Derosia, says that nothing is moving, regardless of the discount.
In my experience with my places
2brs gross about 70-80k
3brs gross 70-90k
4brs gross 90-105k
This is average over the last 5 years. They are nice places but nothing with that amenity that cant be purchased at Lowes. No views, no waterside. They are great locations though
If you think it will bottom out at 7x rents
2BR would sell for 490-560k
3BRs would sell for 490-630k
4Brs would sell for 630-735k
It seems like we are already seeing prices at pretty much these points, no?
When I started buying in early 2019 you could get a 2BR is Sky Harbor that would gross about 50k for 250k which is 5x rents.
Do you think we may see that again? Esp bc costs of cleaning etc have risen since then
I haven't been doing the math on current listings, but once we hit a 7X annual rents threshold, things should start to pick up.
Collin, do you happen to know or have the metrics of the pre-covid booking tourism #'s in the area? And of what the inventory count was at that time.
Something that could be utilized for a projection of expected traffic and market distribution going forward?
With that one could peg scenarios for how deep things could go and where potential bottom would be.
Visits to the GSMNP are returning to normal, but you’d have to go all the way back to mid 2016 and look at available inventory during that time to be comparing apples and apples. - 1yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Collin Hays:
That one is really hard, because several thousand homes were lost in the Gatlinburg fire in 2016. That reconstruction boom was the first jolt of adrenaline for the area, augmented by super low interest rates and then all of the COVID money.Quote from @James Hamling:
Quote from @Collin Hays:
Quote from @Yitzchok Carmen:
Quote from @Collin Hays:
Quote from @James Hamling:
Quote from @Collin Hays:
I just got off the phone with a self manager who paid $810K for his cabin in May of 2023 and is listing it soon for $650K. His realtor advised him to get out now.
It's not a 1-off. Values are going to fall 50-60 percent from 2022 peak before we reach bottom. I lived through this in 2008-2010. I bought my first Smokies property in 2005, and by 2010, it was worth half what I paid. The values will fall until they are a traditional multiple of annual rents - about 7X annual rents.
This time is NOT different.
As for agents, the most reliable agent in that region, Darlene Derosia, says that nothing is moving, regardless of the discount.
In my experience with my places
2brs gross about 70-80k
3brs gross 70-90k
4brs gross 90-105k
This is average over the last 5 years. They are nice places but nothing with that amenity that cant be purchased at Lowes. No views, no waterside. They are great locations though
If you think it will bottom out at 7x rents
2BR would sell for 490-560k
3BRs would sell for 490-630k
4Brs would sell for 630-735k
It seems like we are already seeing prices at pretty much these points, no?
When I started buying in early 2019 you could get a 2BR is Sky Harbor that would gross about 50k for 250k which is 5x rents.
Do you think we may see that again? Esp bc costs of cleaning etc have risen since then
I haven't been doing the math on current listings, but once we hit a 7X annual rents threshold, things should start to pick up.
Collin, do you happen to know or have the metrics of the pre-covid booking tourism #'s in the area? And of what the inventory count was at that time.
Something that could be utilized for a projection of expected traffic and market distribution going forward?
With that one could peg scenarios for how deep things could go and where potential bottom would be.
Visits to the GSMNP are returning to normal, but you’d have to go all the way back to mid 2016 and look at available inventory during that time to be comparing apples and apples.
wow losing thousands of homes to wild first i thought was a west coast phenom. - Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes1yYes it was bad. But that event had a lot to do with the bubble that occurred in the Smokies. New construction costs doubled overnight, simply because there was suddenly massive demand for re-builds and a very small list of available builders.
Quote from @Jay Hinrichs:
Quote from @Collin Hays:
That one is really hard, because several thousand homes were lost in the Gatlinburg fire in 2016. That reconstruction boom was the first jolt of adrenaline for the area, augmented by super low interest rates and then all of the COVID money.Quote from @James Hamling:
Quote from @Collin Hays:
Quote from @Yitzchok Carmen:
Quote from @Collin Hays:
Quote from @James Hamling:
Quote from @Collin Hays:
I just got off the phone with a self manager who paid $810K for his cabin in May of 2023 and is listing it soon for $650K. His realtor advised him to get out now.
It's not a 1-off. Values are going to fall 50-60 percent from 2022 peak before we reach bottom. I lived through this in 2008-2010. I bought my first Smokies property in 2005, and by 2010, it was worth half what I paid. The values will fall until they are a traditional multiple of annual rents - about 7X annual rents.
This time is NOT different.
As for agents, the most reliable agent in that region, Darlene Derosia, says that nothing is moving, regardless of the discount.
In my experience with my places
2brs gross about 70-80k
3brs gross 70-90k
4brs gross 90-105k
This is average over the last 5 years. They are nice places but nothing with that amenity that cant be purchased at Lowes. No views, no waterside. They are great locations though
If you think it will bottom out at 7x rents
2BR would sell for 490-560k
3BRs would sell for 490-630k
4Brs would sell for 630-735k
It seems like we are already seeing prices at pretty much these points, no?
When I started buying in early 2019 you could get a 2BR is Sky Harbor that would gross about 50k for 250k which is 5x rents.
Do you think we may see that again? Esp bc costs of cleaning etc have risen since then
I haven't been doing the math on current listings, but once we hit a 7X annual rents threshold, things should start to pick up.
Collin, do you happen to know or have the metrics of the pre-covid booking tourism #'s in the area? And of what the inventory count was at that time.
Something that could be utilized for a projection of expected traffic and market distribution going forward?
With that one could peg scenarios for how deep things could go and where potential bottom would be.
Visits to the GSMNP are returning to normal, but you’d have to go all the way back to mid 2016 and look at available inventory during that time to be comparing apples and apples.
wow losing thousands of homes to wild first i thought was a west coast phenom. - 1yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Collin Hays:
Yes it was bad. But that event had a lot to do with the bubble that occurred in the Smokies. New construction costs doubled overnight, simply because there was suddenly massive demand for re-builds and a very small list of available builders.Quote from @Jay Hinrichs:
Quote from @Collin Hays:
That one is really hard, because several thousand homes were lost in the Gatlinburg fire in 2016. That reconstruction boom was the first jolt of adrenaline for the area, augmented by super low interest rates and then all of the COVID money.Quote from @James Hamling:
Quote from @Collin Hays:
Quote from @Yitzchok Carmen:
Quote from @Collin Hays:
Quote from @James Hamling:
Quote from @Collin Hays:
I just got off the phone with a self manager who paid $810K for his cabin in May of 2023 and is listing it soon for $650K. His realtor advised him to get out now.
It's not a 1-off. Values are going to fall 50-60 percent from 2022 peak before we reach bottom. I lived through this in 2008-2010. I bought my first Smokies property in 2005, and by 2010, it was worth half what I paid. The values will fall until they are a traditional multiple of annual rents - about 7X annual rents.
This time is NOT different.
As for agents, the most reliable agent in that region, Darlene Derosia, says that nothing is moving, regardless of the discount.
In my experience with my places
2brs gross about 70-80k
3brs gross 70-90k
4brs gross 90-105k
This is average over the last 5 years. They are nice places but nothing with that amenity that cant be purchased at Lowes. No views, no waterside. They are great locations though
If you think it will bottom out at 7x rents
2BR would sell for 490-560k
3BRs would sell for 490-630k
4Brs would sell for 630-735k
It seems like we are already seeing prices at pretty much these points, no?
When I started buying in early 2019 you could get a 2BR is Sky Harbor that would gross about 50k for 250k which is 5x rents.
Do you think we may see that again? Esp bc costs of cleaning etc have risen since then
I haven't been doing the math on current listings, but once we hit a 7X annual rents threshold, things should start to pick up.
Collin, do you happen to know or have the metrics of the pre-covid booking tourism #'s in the area? And of what the inventory count was at that time.
Something that could be utilized for a projection of expected traffic and market distribution going forward?
With that one could peg scenarios for how deep things could go and where potential bottom would be.
Visits to the GSMNP are returning to normal, but you’d have to go all the way back to mid 2016 and look at available inventory during that time to be comparing apples and apples.
wow losing thousands of homes to wild first i thought was a west coast phenom.
And said builders knew it was insurance money rebuilding them.. just like storm chasers and roof replacements in Texas :) - Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes1y
Quote from @Jay Hinrichs:
Quote from @Collin Hays:
Yes it was bad. But that event had a lot to do with the bubble that occurred in the Smokies. New construction costs doubled overnight, simply because there was suddenly massive demand for re-builds and a very small list of available builders.Quote from @Jay Hinrichs:
Quote from @Collin Hays:
That one is really hard, because several thousand homes were lost in the Gatlinburg fire in 2016. That reconstruction boom was the first jolt of adrenaline for the area, augmented by super low interest rates and then all of the COVID money.Quote from @James Hamling:
Quote from @Collin Hays:
Quote from @Yitzchok Carmen:
Quote from @Collin Hays:
Quote from @James Hamling:
Quote from @Collin Hays:
I just got off the phone with a self manager who paid $810K for his cabin in May of 2023 and is listing it soon for $650K. His realtor advised him to get out now.
It's not a 1-off. Values are going to fall 50-60 percent from 2022 peak before we reach bottom. I lived through this in 2008-2010. I bought my first Smokies property in 2005, and by 2010, it was worth half what I paid. The values will fall until they are a traditional multiple of annual rents - about 7X annual rents.
This time is NOT different.
As for agents, the most reliable agent in that region, Darlene Derosia, says that nothing is moving, regardless of the discount.
In my experience with my places
2brs gross about 70-80k
3brs gross 70-90k
4brs gross 90-105k
This is average over the last 5 years. They are nice places but nothing with that amenity that cant be purchased at Lowes. No views, no waterside. They are great locations though
If you think it will bottom out at 7x rents
2BR would sell for 490-560k
3BRs would sell for 490-630k
4Brs would sell for 630-735k
It seems like we are already seeing prices at pretty much these points, no?
When I started buying in early 2019 you could get a 2BR is Sky Harbor that would gross about 50k for 250k which is 5x rents.
Do you think we may see that again? Esp bc costs of cleaning etc have risen since then
I haven't been doing the math on current listings, but once we hit a 7X annual rents threshold, things should start to pick up.
Collin, do you happen to know or have the metrics of the pre-covid booking tourism #'s in the area? And of what the inventory count was at that time.
Something that could be utilized for a projection of expected traffic and market distribution going forward?
With that one could peg scenarios for how deep things could go and where potential bottom would be.
Visits to the GSMNP are returning to normal, but you’d have to go all the way back to mid 2016 and look at available inventory during that time to be comparing apples and apples.
wow losing thousands of homes to wild first i thought was a west coast phenom.
And said builders knew it was insurance money rebuilding them.. just like storm chasers and roof replacements in Texas :)Yes, and many homeowners had to sell their lots because the insurance settlement was far less than replacement cost. I had to pay an additional $150K out of pocket to rebuild mine - it was only insured for appraised value - $210K.
- Member since 2018 · 88 posts · 55 votes1y
Quote from @James Hamling:
Quote from @Yitzchok Carmen:
Quote from @James Hamling:
Quote from @Yitzchok Carmen:
Quote from @Collin Hays:
Quote from @James Hamling:
Quote from @Collin Hays:
I just got off the phone with a self manager who paid $810K for his cabin in May of 2023 and is listing it soon for $650K. His realtor advised him to get out now.
It's not a 1-off. Values are going to fall 50-60 percent from 2022 peak before we reach bottom. I lived through this in 2008-2010. I bought my first Smokies property in 2005, and by 2010, it was worth half what I paid. The values will fall until they are a traditional multiple of annual rents - about 7X annual rents.
This time is NOT different.
As for agents, the most reliable agent in that region, Darlene Derosia, says that nothing is moving, regardless of the discount.
In my experience with my places
2brs gross about 70-80k
3brs gross 70-90k
4brs gross 90-105k
This is average over the last 5 years. They are nice places but nothing with that amenity that cant be purchased at Lowes. No views, no waterside. They are great locations though
If you think it will bottom out at 7x rents
2BR would sell for 490-560k
3BRs would sell for 490-630k
4Brs would sell for 630-735k
It seems like we are already seeing prices at pretty much these points, no?
When I started buying in early 2019 you could get a 2BR is Sky Harbor that would gross about 50k for 250k which is 5x rents.
Do you think we may see that again? Esp bc costs of cleaning etc have risen since then
What your saying here is for your "plane Jane" nothing special, no special amenities, views, furnishings etc your average was/is:
Rented 365 days per year……
2brs - $1,442.31 week / $206.04 per day
3brs - $1,538.46 week / $220 per day
4brs - $1,875.00 week / $267.86 per day
The average occupancy rate for short-term rentals in Gatlinburg is 65% according to Airbtics.
Which makes for 33.8 weeks or 237 days, equaling:
2brs - $2,218.93 week / $316.46 per day
3brs - $2,366.86 week / $337.55 per day
4brs - $2,884.62 week / $411.39 per day
Now the problem with all this is 2024's average occupancy rate was 61%. And we are now seeing it lower at 57%:
And when we look at everything together it all makes sense, seeing just how much inventory has been added in even just the last year alone:
So it's no surprise that when I do a search of current offerings I see amazing properties with fantastic views, amenity loaded, properties offering a heck of a lot more than a roof over the head..... Priced BELOW your stated numbers....
This isn't shocking. It's a natural action of the supply demand curve in action.
Or the "competition that isn't really competition" as you put it, effecting the market because reality is competition IS competition.
And more hands competing for the same dollars, drives DOWN prices and UP quality of offerings.
This is economics 101.
So the whole notion of using yester-markets average revenues to justify a today price is no kosher.
You can't even use in-the-now revenues per say because all indicators is the market is a falling knife.
You have to project forward to the market stabilization point.
As the market declines competitors will UP there offerings and LOWER prices. This becomes a cyclical happening as it drives other competitors to do the same to match and exceed those setting the market at the time. In terms of pricing we call this a "Race To The Bottom".
Somewhere in this operators start exiting, removing inventory and competition.
The question to it all is VELOCITY. Which factor gains what velocity.
Most often the exit is an action of the few and rare, while most select denial and only exit after a long painful bleed-out. So generally the race to the bottom gains the velocity of power and the removal of inventory trails.
Once enough inventory is removed, stabilization comes into the scene.
And since many live in denial and inventory only get's removed through going bust, there is often a rubber-band effect to stabilization.
It's the few who often survive this roller coaster. And a common trait is they were NOT living in denial at any point, they were usually those most hyper aware, and they choose intentionally to ride it all out and through. They don't make it via chance but instead via preparation.
And the many who got bleed dry and out in the end..... They sing the song of "I knew it, if I only held on another _____ months" but no, that's a lie to make self feel better. Because if all the inventory held on the decline would have kept running. It was removal of inventory that made the recovery.
Who are these folks who live in denial and get bleed dry, loosing it all? Most often the vast majority is the self-managed, the non-professional. There means are more limited as is there comprehension of markets, economics, and access to capitol.
Who knows, maybe everything will be a-ok, I'm no expert on the Smokies. But I am an expert on market economics and analysis as it relates to real estate, and this is looking like a loaded gun in the earliest phases of correction.
Boom - Bust cycle. Very normal standard stuff really.
You are correct generally with your view of things. And I may be wrong. However again, there is more nuance in it than just what you are posting as an outsider. And I am def not in denial, I have been working on my places for the last year to get more bookings. What you call a "Professional manager" is also not so black and white like you think. You can feel free to PM me if you really care that much and I would be more than happy to discuss. I don't want to hijack this thread any longer with this
Look I am not sure what your on about with the whole "Professional manager" thing.
The only distinction I make is between Professional and NON-Professional.
There 100% is Management Companies who are BOTH professional and NON-professional. Just as there is self managed that are both professional and NON-professional.
Generally speaking most management companies are professional, and most self-managed are non-professional. And there listings most often reflect this.
For example this listing by "Greg" which despite doing it for many years, it kind of screams non-professional.
The photos are.... well there kuk. It does not visually inspire, or tell much of a story. The details leave more to wonder than it explains. It feels lack luster and novice to say the least.
As does this one that yells "hey, I'm 4 walls and a roof, you could sleep here".....
Vs this one here that "POW" knocks it out of the park! They are selling it Selling It SELLING IT. In the headline, in the photos, in the details there painting a picture of an EXPERIENCE and selling it well. There reviews speak volumes. They obviously are systematically doing this and are Professionals.
And look at this one, nailing it! This looks like it may be one of those big companies but come one, that listing grabs you and says THIS IS THE ONE! They are selling me the experience so much here!
Those who know me know I am the travel diva, I am, the wife is Mrs Top-Shelf but I am the Gordon Ramsey of travel. When I just want 4 walls and a roof I go to the Hilton. I'm old, I've earned it, I'm not some 30-something whipper-snapper anymore so I'm done with super-8's. But when I want an EXPERIENCE I got STR. I want and expect an experience, I want to feel it, live it, I want to be setup for success.
And your listing get's all of 4 seconds to convince me that your that vehicle to my expected experience.
Professionals get this.
My book in experience is regimented and seamless especially if have any issue along the way.
When I arrive it's as if you expected me. I find a guide of tips and things to do. No not a stack of brochures from the local biz association but something of yours, specific to this property and this local. Love it.
Again, professionals get this and deliver.
It's no 1 metric that makes a professional or non-professional, it has nothing to do with LLC or c-corp, it has to do with being a professional hospitality operation or some schmoe offering a place to stay.
When I saw "professional manager" I just mean management company. A company that manages many hundreds of listings that are usually owned by private individuals that pay 20%+ gross revenues to the management company so they can be hands off. Al the companies that I listed in the original post are companies that operate like that.
They, not always, but often, have disadvantages vs a professionally self managed (thats what I meant...not that any shmoe is better, but lots of shmoes in the smokies are very good) listing:
1. Price listed higher bc they need to earn their fees and still deliver a somewhat decent rate for the homeowner (never mind the rent shifting that goes on so they can pocket more).
2. They often have antiquated listings and and operating procedures. They make make you go to an office to check in/ out (which has specific hours) vs self check in. They don't care about your place specifically as they have hundreds of places that they manage; you are just a number. They arent fine tuning your listing or prices in real time like a good self manager will
3. When issues come up they often take much longer to fix a problem. This is just a fact at a lot of these companies. Esp the ones that are national and not locally based but even some local companies are horrible. And I have seen so many reviews of some big management companies that care more about keeping a guests money then trying to make things right, thereby leading to bad reviews for your place which means less bookings. Some companies dont clean cabins well, and just in general dont care. They are paid on gross revenue, not profit so the motivation is less. They do need to get bookings obviously but considering they have so many cabins given to them by remote owners, apparently mediocre for you is still big profits for them.
4. Even if you have a great cabin, there are inevitably owners of cabins managed by these companies that dont care as much or have outdated places. These properties dont rate well and bc your properties are under the same listing account, you suffer too. Those properties dont just hurt themselves, they hurt all the properties in the company. Including you.5. A self manager has more liberty to experiment with dif strategies like being pet friendly, shuffling pricing and listing keywords, rotating photos etc that big companies just don't do. A big part of getting booked is stimulating the OTA algorithms not just being a great property.
Etc:)
I hope that clarifies my "competition is not necessarily competition" statement a little better! Obviously yes, they are competing with me. What I mean is that they are not as sly as a good small operator who has more tools to work with. In that sense they are at disadvantage. Therefore if most of the last min places open are managed by companies rather than self managers thats a bit of a "mitigator". It does NOT mean that you shouldn't keep an eye on things, I apologize that that's how my statement was taken.
- 1yJohn UnderwoodPro MemberInvestor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
Quote from @Collin Hays:
Quote from @Jay Hinrichs:
Quote from @Collin Hays:
Yes it was bad. But that event had a lot to do with the bubble that occurred in the Smokies. New construction costs doubled overnight, simply because there was suddenly massive demand for re-builds and a very small list of available builders.Quote from @Jay Hinrichs:
Quote from @Collin Hays:
That one is really hard, because several thousand homes were lost in the Gatlinburg fire in 2016. That reconstruction boom was the first jolt of adrenaline for the area, augmented by super low interest rates and then all of the COVID money.Quote from @James Hamling:
Quote from @Collin Hays:
Quote from @Yitzchok Carmen:
Quote from @Collin Hays:
Quote from @James Hamling:
Quote from @Collin Hays:
I just got off the phone with a self manager who paid $810K for his cabin in May of 2023 and is listing it soon for $650K. His realtor advised him to get out now.
It's not a 1-off. Values are going to fall 50-60 percent from 2022 peak before we reach bottom. I lived through this in 2008-2010. I bought my first Smokies property in 2005, and by 2010, it was worth half what I paid. The values will fall until they are a traditional multiple of annual rents - about 7X annual rents.
This time is NOT different.
As for agents, the most reliable agent in that region, Darlene Derosia, says that nothing is moving, regardless of the discount.
In my experience with my places
2brs gross about 70-80k
3brs gross 70-90k
4brs gross 90-105k
This is average over the last 5 years. They are nice places but nothing with that amenity that cant be purchased at Lowes. No views, no waterside. They are great locations though
If you think it will bottom out at 7x rents
2BR would sell for 490-560k
3BRs would sell for 490-630k
4Brs would sell for 630-735k
It seems like we are already seeing prices at pretty much these points, no?
When I started buying in early 2019 you could get a 2BR is Sky Harbor that would gross about 50k for 250k which is 5x rents.
Do you think we may see that again? Esp bc costs of cleaning etc have risen since then
I haven't been doing the math on current listings, but once we hit a 7X annual rents threshold, things should start to pick up.
Collin, do you happen to know or have the metrics of the pre-covid booking tourism #'s in the area? And of what the inventory count was at that time.
Something that could be utilized for a projection of expected traffic and market distribution going forward?
With that one could peg scenarios for how deep things could go and where potential bottom would be.
Visits to the GSMNP are returning to normal, but you’d have to go all the way back to mid 2016 and look at available inventory during that time to be comparing apples and apples.
wow losing thousands of homes to wild first i thought was a west coast phenom.
And said builders knew it was insurance money rebuilding them.. just like storm chasers and roof replacements in Texas :)Yes, and many homeowners had to sell their lots because the insurance settlement was far less than replacement cost. I had to pay an additional $150K out of pocket to rebuild mine - it was only insured for appraised value - $210K.
I take it that you didn't have replacement cost insurance? Or you did and it was underinsured at today's rebuild costs?
Quote from @Collin Hays:
Quote from @James Hamling:
Quote from @Collin Hays:
I just got off the phone with a self manager who paid $810K for his cabin in May of 2023 and is listing it soon for $650K. His realtor advised him to get out now.
It's not a 1-off. Values are going to fall 50-60 percent from 2022 peak before we reach bottom. I lived through this in 2008-2010. I bought my first Smokies property in 2005, and by 2010, it was worth half what I paid. The values will fall until they are a traditional multiple of annual rents - about 7X annual rents.
This time is NOT different.
As for agents, the most reliable agent in that region, Darlene Derosia, says that nothing is moving, regardless of the discount.
Do you really think property values are going to fall 50-60% from peak? asking prices are still high and 2008 was more like once a generation type of event.
- Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes1y
Quote from @Cheng Chu:
Quote from @Collin Hays:
Quote from @James Hamling:
Quote from @Collin Hays:
I just got off the phone with a self manager who paid $810K for his cabin in May of 2023 and is listing it soon for $650K. His realtor advised him to get out now.
It's not a 1-off. Values are going to fall 50-60 percent from 2022 peak before we reach bottom. I lived through this in 2008-2010. I bought my first Smokies property in 2005, and by 2010, it was worth half what I paid. The values will fall until they are a traditional multiple of annual rents - about 7X annual rents.
This time is NOT different.
As for agents, the most reliable agent in that region, Darlene Derosia, says that nothing is moving, regardless of the discount.
Do you really think property values are going to fall 50-60% from peak? asking prices are still high and 2008 was more like once a generation type of event.
1. Prices will fall until the sale price is around 7X annual rents. Not including cleaning fees and taxes. Actual rents.
2. Asking prices are high because sellers are in denial.
2. 2008 has been 17 years. Not too far from a generation.
- 1yDon KonipolBusiness MemberInvestor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes
“Competition is not necessarily competition”And you think you can reason with this guy?
I’ll add this. In the 2017-2018 time frame the general consensus was that given any cabin in the Smokies, most realtors were projecting income at 20k per year per bedroom. From what I saw at the time, these were good numbers to go by back then. @Collin Hays would you say those projections back then were on target?
- Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes1yI had forgotten that, but now that you mention it, I recall hearing that. Probably a decent rule of thumb even for today.
Quote from @Ken Boone:
I’ll add this. In the 2017-2018 time frame the general consensus was that given any cabin in the Smokies, most realtors were projecting income at 20k per year per bedroom. From what I saw at the time, these were good numbers to go by back then. @Collin Hays would you say those projections back then were on target?
Quote from @Collin Hays:
I had forgotten that, but now that you mention it, I recall hearing that. Probably a decent rule of thumb even for today.Quote from @Ken Boone:
I’ll add this. In the 2017-2018 time frame the general consensus was that given any cabin in the Smokies, most realtors were projecting income at 20k per year per bedroom. From what I saw at the time, these were good numbers to go by back then. @Collin Hays would you say those projections back then were on target?
And if we return to those 20k per bedroom numbers there will be wailing and gnashing of teeth! Because NOBODY that bought at 2023-2024 prices and leveraged it will make money.
- Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes1y
Quote from @Ken Boone:
Quote from @Collin Hays:
I had forgotten that, but now that you mention it, I recall hearing that. Probably a decent rule of thumb even for today.Quote from @Ken Boone:
I’ll add this. In the 2017-2018 time frame the general consensus was that given any cabin in the Smokies, most realtors were projecting income at 20k per year per bedroom. From what I saw at the time, these were good numbers to go by back then. @Collin Hays would you say those projections back then were on target?
And if we return to those 20k per bedroom numbers there will be wailing and gnashing of teeth! Because NOBODY that bought at 2023-2024 prices and leveraged it will make money.
Yeah I don't think those numbers are going to be very far off of reality. I have a number of clients who we have managed for many years that are doing just fine at $20K a room.
I visited with a gentleman this week who bought a 3/2 in May of 2023 for $810K-ish, and he is listing it for $650K-ish. He will probably get $550-600K. If he waits much longer, it will be $450-500K.
Quote from @Collin Hays:
Quote from @Ken Boone:
Quote from @Collin Hays:
I had forgotten that, but now that you mention it, I recall hearing that. Probably a decent rule of thumb even for today.Quote from @Ken Boone:
I’ll add this. In the 2017-2018 time frame the general consensus was that given any cabin in the Smokies, most realtors were projecting income at 20k per year per bedroom. From what I saw at the time, these were good numbers to go by back then. @Collin Hays would you say those projections back then were on target?
And if we return to those 20k per bedroom numbers there will be wailing and gnashing of teeth! Because NOBODY that bought at 2023-2024 prices and leveraged it will make money.
Yeah I don't think those numbers are going to be very far off of reality. I have a number of clients who we have managed for many years that are doing just fine at $20K a room.
I visited with a gentleman this week who bought a 3/2 in May of 2023 for $810K-ish, and he is listing it for $650K-ish. He will probably get $550-600K. If he waits much longer, it will be $450-500K.
Yea that is gonna hurt! I got a buddy that's in a bad mess like that too.
- Rental Property Investor · Member since 2019 · 276 posts · 235 votes1y
Quote from @Ken Boone:
Quote from @Collin Hays:
Quote from @Ken Boone:
Quote from @Collin Hays:
I had forgotten that, but now that you mention it, I recall hearing that. Probably a decent rule of thumb even for today.Quote from @Ken Boone:
I’ll add this. In the 2017-2018 time frame the general consensus was that given any cabin in the Smokies, most realtors were projecting income at 20k per year per bedroom. From what I saw at the time, these were good numbers to go by back then. @Collin Hays would you say those projections back then were on target?
And if we return to those 20k per bedroom numbers there will be wailing and gnashing of teeth! Because NOBODY that bought at 2023-2024 prices and leveraged it will make money.
Yeah I don't think those numbers are going to be very far off of reality. I have a number of clients who we have managed for many years that are doing just fine at $20K a room.
I visited with a gentleman this week who bought a 3/2 in May of 2023 for $810K-ish, and he is listing it for $650K-ish. He will probably get $550-600K. If he waits much longer, it will be $450-500K.
Yea that is gonna hurt! I got a buddy that's in a bad mess like that too.
I've got three friends in this mess too. And they used HELOC's on primaries for the down payment planning on 2022-2023 rents to continue to pay off the HELOC quickly. :( It's a real shame but I still don't see how people thought that would last forever. FOMO was absolutely real along with realtors being VERY greedy.
We have 5 (almost 6) in the area and are fine (definitely down) but we paid less than $300k each for all ours between 2020-2021.
Taxes and insurance are getting pretty terrible though. The idea of Sevier county being a great place to invest for low taxes is no longer true.
- Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes1yIt will be interesting to see how the taxing authorities respond to these new values. City and county gubmits have undoubtedly gotten fat off of these hugely bloated values. When everything comes back to earth, they’ll have to raise the tax rate to keep everything going. They won’t lean up like the rest of us have to.
Quote from @Leora Merrell:
Quote from @Ken Boone:
Quote from @Collin Hays:
Quote from @Ken Boone:
Quote from @Collin Hays:
I had forgotten that, but now that you mention it, I recall hearing that. Probably a decent rule of thumb even for today.Quote from @Ken Boone:
I’ll add this. In the 2017-2018 time frame the general consensus was that given any cabin in the Smokies, most realtors were projecting income at 20k per year per bedroom. From what I saw at the time, these were good numbers to go by back then. @Collin Hays would you say those projections back then were on target?
And if we return to those 20k per bedroom numbers there will be wailing and gnashing of teeth! Because NOBODY that bought at 2023-2024 prices and leveraged it will make money.
Yeah I don't think those numbers are going to be very far off of reality. I have a number of clients who we have managed for many years that are doing just fine at $20K a room.
I visited with a gentleman this week who bought a 3/2 in May of 2023 for $810K-ish, and he is listing it for $650K-ish. He will probably get $550-600K. If he waits much longer, it will be $450-500K.
Yea that is gonna hurt! I got a buddy that's in a bad mess like that too.
I've got three friends in this mess too. And they used HELOC's on primaries for the down payment planning on 2022-2023 rents to continue to pay off the HELOC quickly. :( It's a real shame but I still don't see how people thought that would last forever. FOMO was absolutely real along with realtors being VERY greedy.
We have 5 (almost 6) in the area and are fine (definitely down) but we paid less than $300k each for all ours between 2020-2021.
Taxes and insurance are getting pretty terrible though. The idea of Sevier county being a great place to invest for low taxes is no longer true.
- Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes1y
Quote from @Leora Merrell:
Quote from @Ken Boone:
Quote from @Collin Hays:
Quote from @Ken Boone:
Quote from @Collin Hays:
I had forgotten that, but now that you mention it, I recall hearing that. Probably a decent rule of thumb even for today.Quote from @Ken Boone:
I’ll add this. In the 2017-2018 time frame the general consensus was that given any cabin in the Smokies, most realtors were projecting income at 20k per year per bedroom. From what I saw at the time, these were good numbers to go by back then. @Collin Hays would you say those projections back then were on target?
And if we return to those 20k per bedroom numbers there will be wailing and gnashing of teeth! Because NOBODY that bought at 2023-2024 prices and leveraged it will make money.
Yeah I don't think those numbers are going to be very far off of reality. I have a number of clients who we have managed for many years that are doing just fine at $20K a room.
I visited with a gentleman this week who bought a 3/2 in May of 2023 for $810K-ish, and he is listing it for $650K-ish. He will probably get $550-600K. If he waits much longer, it will be $450-500K.
Yea that is gonna hurt! I got a buddy that's in a bad mess like that too.
I've got three friends in this mess too. And they used HELOC's on primaries for the down payment planning on 2022-2023 rents to continue to pay off the HELOC quickly. :( It's a real shame but I still don't see how people thought that would last forever. FOMO was absolutely real along with realtors being VERY greedy.
We have 5 (almost 6) in the area and are fine (definitely down) but we paid less than $300k each for all ours between 2020-2021.
Taxes and insurance are getting pretty terrible though. The idea of Sevier county being a great place to invest for low taxes is no longer true.
This is exactly why I hate HELOC's and advise to never NEVER us a heloc to acquire investment property. DSCR, seller financing, or get more capitol.
It's just horrible to risk all that have done. Sad.
- Member since 2018 · 88 posts · 55 votes1y
Quote from @James Hamling:
Quote from @Leora Merrell:
Quote from @Ken Boone:
Quote from @Collin Hays:
Quote from @Ken Boone:
Quote from @Collin Hays:
I had forgotten that, but now that you mention it, I recall hearing that. Probably a decent rule of thumb even for today.Quote from @Ken Boone:
I’ll add this. In the 2017-2018 time frame the general consensus was that given any cabin in the Smokies, most realtors were projecting income at 20k per year per bedroom. From what I saw at the time, these were good numbers to go by back then. @Collin Hays would you say those projections back then were on target?
And if we return to those 20k per bedroom numbers there will be wailing and gnashing of teeth! Because NOBODY that bought at 2023-2024 prices and leveraged it will make money.
Yeah I don't think those numbers are going to be very far off of reality. I have a number of clients who we have managed for many years that are doing just fine at $20K a room.
I visited with a gentleman this week who bought a 3/2 in May of 2023 for $810K-ish, and he is listing it for $650K-ish. He will probably get $550-600K. If he waits much longer, it will be $450-500K.
Yea that is gonna hurt! I got a buddy that's in a bad mess like that too.
I've got three friends in this mess too. And they used HELOC's on primaries for the down payment planning on 2022-2023 rents to continue to pay off the HELOC quickly. :( It's a real shame but I still don't see how people thought that would last forever. FOMO was absolutely real along with realtors being VERY greedy.
We have 5 (almost 6) in the area and are fine (definitely down) but we paid less than $300k each for all ours between 2020-2021.
Taxes and insurance are getting pretty terrible though. The idea of Sevier county being a great place to invest for low taxes is no longer true.
This is exactly why I hate HELOC's and advise to never NEVER us a heloc to acquire investment property. DSCR, seller financing, or get more capitol.
It's just horrible to risk all that have done. Sad.
And obviously a self manager IS using a professional cleaner and maintenance company! But that company is not the property manager, the owner is
- 1yJohn UnderwoodPro MemberInvestor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
Quote from @James Hamling:
Quote from @Leora Merrell:
Quote from @Ken Boone:
Quote from @Collin Hays:
Quote from @Ken Boone:
Quote from @Collin Hays:
I had forgotten that, but now that you mention it, I recall hearing that. Probably a decent rule of thumb even for today.Quote from @Ken Boone:
I’ll add this. In the 2017-2018 time frame the general consensus was that given any cabin in the Smokies, most realtors were projecting income at 20k per year per bedroom. From what I saw at the time, these were good numbers to go by back then. @Collin Hays would you say those projections back then were on target?
And if we return to those 20k per bedroom numbers there will be wailing and gnashing of teeth! Because NOBODY that bought at 2023-2024 prices and leveraged it will make money.
Yeah I don't think those numbers are going to be very far off of reality. I have a number of clients who we have managed for many years that are doing just fine at $20K a room.
I visited with a gentleman this week who bought a 3/2 in May of 2023 for $810K-ish, and he is listing it for $650K-ish. He will probably get $550-600K. If he waits much longer, it will be $450-500K.
Yea that is gonna hurt! I got a buddy that's in a bad mess like that too.
I've got three friends in this mess too. And they used HELOC's on primaries for the down payment planning on 2022-2023 rents to continue to pay off the HELOC quickly. :( It's a real shame but I still don't see how people thought that would last forever. FOMO was absolutely real along with realtors being VERY greedy.
We have 5 (almost 6) in the area and are fine (definitely down) but we paid less than $300k each for all ours between 2020-2021.
Taxes and insurance are getting pretty terrible though. The idea of Sevier county being a great place to invest for low taxes is no longer true.
This is exactly why I hate HELOC's and advise to never NEVER us a heloc to acquire investment property. DSCR, seller financing, or get more capitol.
It's just horrible to risk all that have done. Sad.
I disagree with both of your opinions.
Using Heloq's and owner financing for the right investment can be great. You just have to purchase the correct investment.
We just bought a house with owner financing. Minimal downpayment and no interest. The investment will pay for itself in 5 years, and I could buy an almost unlimited amount of these deals if I could find them.
We could have written a check for the property but why bother when we are getting 0% interest? We have it rented making more than the loan payment.
- Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes1y
Quote from @John Underwood:
Quote from @James Hamling:
Quote from @Leora Merrell:
Quote from @Ken Boone:
Quote from @Collin Hays:
Quote from @Ken Boone:
Quote from @Collin Hays:
I had forgotten that, but now that you mention it, I recall hearing that. Probably a decent rule of thumb even for today.Quote from @Ken Boone:
I’ll add this. In the 2017-2018 time frame the general consensus was that given any cabin in the Smokies, most realtors were projecting income at 20k per year per bedroom. From what I saw at the time, these were good numbers to go by back then. @Collin Hays would you say those projections back then were on target?
And if we return to those 20k per bedroom numbers there will be wailing and gnashing of teeth! Because NOBODY that bought at 2023-2024 prices and leveraged it will make money.
Yeah I don't think those numbers are going to be very far off of reality. I have a number of clients who we have managed for many years that are doing just fine at $20K a room.
I visited with a gentleman this week who bought a 3/2 in May of 2023 for $810K-ish, and he is listing it for $650K-ish. He will probably get $550-600K. If he waits much longer, it will be $450-500K.
Yea that is gonna hurt! I got a buddy that's in a bad mess like that too.
I've got three friends in this mess too. And they used HELOC's on primaries for the down payment planning on 2022-2023 rents to continue to pay off the HELOC quickly. :( It's a real shame but I still don't see how people thought that would last forever. FOMO was absolutely real along with realtors being VERY greedy.
We have 5 (almost 6) in the area and are fine (definitely down) but we paid less than $300k each for all ours between 2020-2021.
Taxes and insurance are getting pretty terrible though. The idea of Sevier county being a great place to invest for low taxes is no longer true.
This is exactly why I hate HELOC's and advise to never NEVER us a heloc to acquire investment property. DSCR, seller financing, or get more capitol.
It's just horrible to risk all that have done. Sad.
I disagree with both of your opinions.
Using Heloq's and owner financing for the right investment can be great. You just have to purchase the correct investment.
We just bought a house with owner financing. Minimal downpayment and no interest. The investment will pay for itself in 5 years, and I could buy an almost unlimited amount of these deals if I could find them.
We could have written a check for the property but why bother when we are getting 0% interest? We have it rented making more than the loan payment.
You mis-read what I stated. I cheer the merits of seller financing, dscr and other methods vs HELOQ.And you detail the exact problem with HELOQ for investment property. It works IF, IF everything works out right.
If it does NOT, you not only risk the new buy but you also risk the previous assets now connected into things. It's a form of comingling assets. It greatly add's risk exposure, it compounds risk exposure.
In the coming months there is going to be ever increasing #'s of people crying out for help because what was a "good buy" has gone belly up and now it's not only that but also the heloq they now are in risk with and that property..... There will be people reaping the negative compounding effect and loosing everything.
Fact is HELOQ for acquiring investment property is a HIGH LEVERAGE strategy and with that HIGH RISK.
People have gotten lazy and negligent to that reality because of the past years boom market.... well yet again people get into weird thinking that the market of the moment is the market of eternity.
The vast majority of people do NOT have the skill, experience or qualifications to do highly accurate market analysis projections out years, and with that know what is or is not a "good buy" over the duration of years.
They instead do it on the moment, and if it looks good at the moment the equate that too eternity. Years go by and market shifts. That's exactly what we have going on now.
- 1yJohn UnderwoodPro MemberInvestor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
Quote from @James Hamling:
Quote from @John Underwood:
Quote from @James Hamling:
Quote from @Leora Merrell:
Quote from @Ken Boone:
Quote from @Collin Hays:
Quote from @Ken Boone:
Quote from @Collin Hays:
I had forgotten that, but now that you mention it, I recall hearing that. Probably a decent rule of thumb even for today.Quote from @Ken Boone:
I’ll add this. In the 2017-2018 time frame the general consensus was that given any cabin in the Smokies, most realtors were projecting income at 20k per year per bedroom. From what I saw at the time, these were good numbers to go by back then. @Collin Hays would you say those projections back then were on target?
And if we return to those 20k per bedroom numbers there will be wailing and gnashing of teeth! Because NOBODY that bought at 2023-2024 prices and leveraged it will make money.
Yeah I don't think those numbers are going to be very far off of reality. I have a number of clients who we have managed for many years that are doing just fine at $20K a room.
I visited with a gentleman this week who bought a 3/2 in May of 2023 for $810K-ish, and he is listing it for $650K-ish. He will probably get $550-600K. If he waits much longer, it will be $450-500K.
Yea that is gonna hurt! I got a buddy that's in a bad mess like that too.
I've got three friends in this mess too. And they used HELOC's on primaries for the down payment planning on 2022-2023 rents to continue to pay off the HELOC quickly. :( It's a real shame but I still don't see how people thought that would last forever. FOMO was absolutely real along with realtors being VERY greedy.
We have 5 (almost 6) in the area and are fine (definitely down) but we paid less than $300k each for all ours between 2020-2021.
Taxes and insurance are getting pretty terrible though. The idea of Sevier county being a great place to invest for low taxes is no longer true.
This is exactly why I hate HELOC's and advise to never NEVER us a heloc to acquire investment property. DSCR, seller financing, or get more capitol.
It's just horrible to risk all that have done. Sad.
I disagree with both of your opinions.
Using Heloq's and owner financing for the right investment can be great. You just have to purchase the correct investment.
We just bought a house with owner financing. Minimal downpayment and no interest. The investment will pay for itself in 5 years, and I could buy an almost unlimited amount of these deals if I could find them.
We could have written a check for the property but why bother when we are getting 0% interest? We have it rented making more than the loan payment.
You mis-read what I stated. I cheer the merits of seller financing, dscr and other methods vs HELOQ.And you detail the exact problem with HELOQ for investment property. It works IF, IF everything works out right.
If it does NOT, you not only risk the new buy but you also risk the previous assets now connected into things. It's a form of comingling assets. It greatly add's risk exposure, it compounds risk exposure.
In the coming months there is going to be ever increasing #'s of people crying out for help because what was a "good buy" has gone belly up and now it's not only that but also the heloq they now are in risk with and that property..... There will be people reaping the negative compounding effect and loosing everything.
Fact is HELOQ for acquiring investment property is a HIGH LEVERAGE strategy and with that HIGH RISK.
People have gotten lazy and negligent to that reality because of the past years boom market.... well yet again people get into weird thinking that the market of the moment is the market of eternity.
The vast majority of people do NOT have the skill, experience or qualifications to do highly accurate market analysis projections out years, and with that know what is or is not a "good buy" over the duration of years.
They instead do it on the moment, and if it looks good at the moment the equate that too eternity. Years go by and market shifts. That's exactly what we have going on now.
My bad, I must have misread that
- Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes1y
Quote from @John Underwood:
Quote from @James Hamling:
Quote from @John Underwood:
Quote from @James Hamling:
Quote from @Leora Merrell:
Quote from @Ken Boone:
Quote from @Collin Hays:
Quote from @Ken Boone:
Quote from @Collin Hays:
I had forgotten that, but now that you mention it, I recall hearing that. Probably a decent rule of thumb even for today.Quote from @Ken Boone:
I’ll add this. In the 2017-2018 time frame the general consensus was that given any cabin in the Smokies, most realtors were projecting income at 20k per year per bedroom. From what I saw at the time, these were good numbers to go by back then. @Collin Hays would you say those projections back then were on target?
And if we return to those 20k per bedroom numbers there will be wailing and gnashing of teeth! Because NOBODY that bought at 2023-2024 prices and leveraged it will make money.
Yeah I don't think those numbers are going to be very far off of reality. I have a number of clients who we have managed for many years that are doing just fine at $20K a room.
I visited with a gentleman this week who bought a 3/2 in May of 2023 for $810K-ish, and he is listing it for $650K-ish. He will probably get $550-600K. If he waits much longer, it will be $450-500K.
Yea that is gonna hurt! I got a buddy that's in a bad mess like that too.
I've got three friends in this mess too. And they used HELOC's on primaries for the down payment planning on 2022-2023 rents to continue to pay off the HELOC quickly. :( It's a real shame but I still don't see how people thought that would last forever. FOMO was absolutely real along with realtors being VERY greedy.
We have 5 (almost 6) in the area and are fine (definitely down) but we paid less than $300k each for all ours between 2020-2021.
Taxes and insurance are getting pretty terrible though. The idea of Sevier county being a great place to invest for low taxes is no longer true.
This is exactly why I hate HELOC's and advise to never NEVER us a heloc to acquire investment property. DSCR, seller financing, or get more capitol.
It's just horrible to risk all that have done. Sad.
I disagree with both of your opinions.
Using Heloq's and owner financing for the right investment can be great. You just have to purchase the correct investment.
We just bought a house with owner financing. Minimal downpayment and no interest. The investment will pay for itself in 5 years, and I could buy an almost unlimited amount of these deals if I could find them.
We could have written a check for the property but why bother when we are getting 0% interest? We have it rented making more than the loan payment.
You mis-read what I stated. I cheer the merits of seller financing, dscr and other methods vs HELOQ.And you detail the exact problem with HELOQ for investment property. It works IF, IF everything works out right.
If it does NOT, you not only risk the new buy but you also risk the previous assets now connected into things. It's a form of comingling assets. It greatly add's risk exposure, it compounds risk exposure.
In the coming months there is going to be ever increasing #'s of people crying out for help because what was a "good buy" has gone belly up and now it's not only that but also the heloq they now are in risk with and that property..... There will be people reaping the negative compounding effect and loosing everything.
Fact is HELOQ for acquiring investment property is a HIGH LEVERAGE strategy and with that HIGH RISK.
People have gotten lazy and negligent to that reality because of the past years boom market.... well yet again people get into weird thinking that the market of the moment is the market of eternity.
The vast majority of people do NOT have the skill, experience or qualifications to do highly accurate market analysis projections out years, and with that know what is or is not a "good buy" over the duration of years.
They instead do it on the moment, and if it looks good at the moment the equate that too eternity. Years go by and market shifts. That's exactly what we have going on now.
My bad, I must have misread that
It was kind of mashed together so I get how could have missed that conversion of don't do HELOC and instead use any of the other way safer less risk strategies.
I mean, in theory HELOC could be great but whole problem is all the if's & but's that come with it.
And let's be honest, all of us pro's of various kinds coast to coast, how many buy's have we seen the last few years that we say "who in the hell is that dumb..... what the hell are they thinking?".
For me it's at least 50% of the buys I've seen the last 3/4 years that are just head scratchers. Buyer is clearly got there head in the clouds.
But we see this in all the high leverage strategies too right. SubTo, there is so many crazy bizarre buy cases there like the one's arguing getting in at 110%+ FMV "makes sense" because because because...... And there all betting on perpetual 2x/3x+ appreciation rates vs historical norms.
About the only safe'ish way to do HELOC is if look at refinance, and it pencils out with a refinance at a worst-case-scenario based on future potential of rates and monetization declines, so you have that plan B if ever need be to refi it all, ok. But that's not how 90%+ of people are using HELOC's today.
Most are using HELOC's to squeeze everything, all leverage right to the maximum.
Max leverage = 0 buffer for any bumps in the road, that everything must go perfectly for many months and/or years or else the whole house of cards comes down.
And who often would take such gambles? The novice, those least equipped or experienced to get through any trouble spots.
It's a setup for failure.
In 2005/06/07 it was a similar thing in new construction. People were blindly just buying anything and everything on pre-sale, because it was just known that you'd always be able to sell it at market once build was done to pocket a quick $20k.......
Until it didn't work anymore. And when it stopped it STOPPED and slingshot the opposite direction fast and hard.
It bankrupt a lot of people.
Leverage amplifies results, good or bad. Maximum leverage makes for maximum amplification.
- Member since 2018 · 88 posts · 55 votes1yHow do you get owner financing for 0% interest? :)
Quote from @John Underwood:
Quote from @James Hamling:
Quote from @Leora Merrell:
Quote from @Ken Boone:
Quote from @Collin Hays:
Quote from @Ken Boone:
Quote from @Collin Hays:
I had forgotten that, but now that you mention it, I recall hearing that. Probably a decent rule of thumb even for today.Quote from @Ken Boone:
I’ll add this. In the 2017-2018 time frame the general consensus was that given any cabin in the Smokies, most realtors were projecting income at 20k per year per bedroom. From what I saw at the time, these were good numbers to go by back then. @Collin Hays would you say those projections back then were on target?
And if we return to those 20k per bedroom numbers there will be wailing and gnashing of teeth! Because NOBODY that bought at 2023-2024 prices and leveraged it will make money.
Yeah I don't think those numbers are going to be very far off of reality. I have a number of clients who we have managed for many years that are doing just fine at $20K a room.
I visited with a gentleman this week who bought a 3/2 in May of 2023 for $810K-ish, and he is listing it for $650K-ish. He will probably get $550-600K. If he waits much longer, it will be $450-500K.
Yea that is gonna hurt! I got a buddy that's in a bad mess like that too.
I've got three friends in this mess too. And they used HELOC's on primaries for the down payment planning on 2022-2023 rents to continue to pay off the HELOC quickly. :( It's a real shame but I still don't see how people thought that would last forever. FOMO was absolutely real along with realtors being VERY greedy.
We have 5 (almost 6) in the area and are fine (definitely down) but we paid less than $300k each for all ours between 2020-2021.
Taxes and insurance are getting pretty terrible though. The idea of Sevier county being a great place to invest for low taxes is no longer true.
This is exactly why I hate HELOC's and advise to never NEVER us a heloc to acquire investment property. DSCR, seller financing, or get more capitol.
It's just horrible to risk all that have done. Sad.
I disagree with both of your opinions.
Using Heloq's and owner financing for the right investment can be great. You just have to purchase the correct investment.
We just bought a house with owner financing. Minimal downpayment and no interest. The investment will pay for itself in 5 years, and I could buy an almost unlimited amount of these deals if I could find them.
We could have written a check for the property but why bother when we are getting 0% interest? We have it rented making more than the loan payment.
- Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes1y
Quote from @Yitzchok Carmen:
How do you get owner financing for 0% interest? :)Quote from @John Underwood:
Quote from @James Hamling:
Quote from @Leora Merrell:
Quote from @Ken Boone:
Quote from @Collin Hays:
Quote from @Ken Boone:
Quote from @Collin Hays:
I had forgotten that, but now that you mention it, I recall hearing that. Probably a decent rule of thumb even for today.Quote from @Ken Boone:
I’ll add this. In the 2017-2018 time frame the general consensus was that given any cabin in the Smokies, most realtors were projecting income at 20k per year per bedroom. From what I saw at the time, these were good numbers to go by back then. @Collin Hays would you say those projections back then were on target?
And if we return to those 20k per bedroom numbers there will be wailing and gnashing of teeth! Because NOBODY that bought at 2023-2024 prices and leveraged it will make money.
Yeah I don't think those numbers are going to be very far off of reality. I have a number of clients who we have managed for many years that are doing just fine at $20K a room.
I visited with a gentleman this week who bought a 3/2 in May of 2023 for $810K-ish, and he is listing it for $650K-ish. He will probably get $550-600K. If he waits much longer, it will be $450-500K.
Yea that is gonna hurt! I got a buddy that's in a bad mess like that too.
I've got three friends in this mess too. And they used HELOC's on primaries for the down payment planning on 2022-2023 rents to continue to pay off the HELOC quickly. :( It's a real shame but I still don't see how people thought that would last forever. FOMO was absolutely real along with realtors being VERY greedy.
We have 5 (almost 6) in the area and are fine (definitely down) but we paid less than $300k each for all ours between 2020-2021.
Taxes and insurance are getting pretty terrible though. The idea of Sevier county being a great place to invest for low taxes is no longer true.
This is exactly why I hate HELOC's and advise to never NEVER us a heloc to acquire investment property. DSCR, seller financing, or get more capitol.
It's just horrible to risk all that have done. Sad.
I disagree with both of your opinions.
Using Heloq's and owner financing for the right investment can be great. You just have to purchase the correct investment.
We just bought a house with owner financing. Minimal downpayment and no interest. The investment will pay for itself in 5 years, and I could buy an almost unlimited amount of these deals if I could find them.
We could have written a check for the property but why bother when we are getting 0% interest? We have it rented making more than the loan payment.
Well, I'd assume step 1 is you ask......
- Member since 2018 · 88 posts · 55 votes1y
Quote from @James Hamling:
Quote from @Yitzchok Carmen:
How do you get owner financing for 0% interest? :)Quote from @John Underwood:
Quote from @James Hamling:
Quote from @Leora Merrell:
Quote from @Ken Boone:
Quote from @Collin Hays:
Quote from @Ken Boone:
Quote from @Collin Hays:
I had forgotten that, but now that you mention it, I recall hearing that. Probably a decent rule of thumb even for today.Quote from @Ken Boone:
I’ll add this. In the 2017-2018 time frame the general consensus was that given any cabin in the Smokies, most realtors were projecting income at 20k per year per bedroom. From what I saw at the time, these were good numbers to go by back then. @Collin Hays would you say those projections back then were on target?
And if we return to those 20k per bedroom numbers there will be wailing and gnashing of teeth! Because NOBODY that bought at 2023-2024 prices and leveraged it will make money.
Yeah I don't think those numbers are going to be very far off of reality. I have a number of clients who we have managed for many years that are doing just fine at $20K a room.
I visited with a gentleman this week who bought a 3/2 in May of 2023 for $810K-ish, and he is listing it for $650K-ish. He will probably get $550-600K. If he waits much longer, it will be $450-500K.
Yea that is gonna hurt! I got a buddy that's in a bad mess like that too.
I've got three friends in this mess too. And they used HELOC's on primaries for the down payment planning on 2022-2023 rents to continue to pay off the HELOC quickly. :( It's a real shame but I still don't see how people thought that would last forever. FOMO was absolutely real along with realtors being VERY greedy.
We have 5 (almost 6) in the area and are fine (definitely down) but we paid less than $300k each for all ours between 2020-2021.
Taxes and insurance are getting pretty terrible though. The idea of Sevier county being a great place to invest for low taxes is no longer true.
This is exactly why I hate HELOC's and advise to never NEVER us a heloc to acquire investment property. DSCR, seller financing, or get more capitol.
It's just horrible to risk all that have done. Sad.
I disagree with both of your opinions.
Using Heloq's and owner financing for the right investment can be great. You just have to purchase the correct investment.
We just bought a house with owner financing. Minimal downpayment and no interest. The investment will pay for itself in 5 years, and I could buy an almost unlimited amount of these deals if I could find them.
We could have written a check for the property but why bother when we are getting 0% interest? We have it rented making more than the loan payment.
Well, I'd assume step 1 is you ask......
Well yeah but why would they say yes? Why would anyone essentially lend you potentially hundreds of thousands of dollars for free?
Genuinely asking...
- Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes1y
Quote from @Yitzchok Carmen:
Quote from @James Hamling:
Quote from @Yitzchok Carmen:
How do you get owner financing for 0% interest? :)Quote from @John Underwood:
Quote from @James Hamling:
Quote from @Leora Merrell:
Quote from @Ken Boone:
Quote from @Collin Hays:
Quote from @Ken Boone:
Quote from @Collin Hays:
I had forgotten that, but now that you mention it, I recall hearing that. Probably a decent rule of thumb even for today.Quote from @Ken Boone:
I’ll add this. In the 2017-2018 time frame the general consensus was that given any cabin in the Smokies, most realtors were projecting income at 20k per year per bedroom. From what I saw at the time, these were good numbers to go by back then. @Collin Hays would you say those projections back then were on target?
And if we return to those 20k per bedroom numbers there will be wailing and gnashing of teeth! Because NOBODY that bought at 2023-2024 prices and leveraged it will make money.
Yeah I don't think those numbers are going to be very far off of reality. I have a number of clients who we have managed for many years that are doing just fine at $20K a room.
I visited with a gentleman this week who bought a 3/2 in May of 2023 for $810K-ish, and he is listing it for $650K-ish. He will probably get $550-600K. If he waits much longer, it will be $450-500K.
Yea that is gonna hurt! I got a buddy that's in a bad mess like that too.
I've got three friends in this mess too. And they used HELOC's on primaries for the down payment planning on 2022-2023 rents to continue to pay off the HELOC quickly. :( It's a real shame but I still don't see how people thought that would last forever. FOMO was absolutely real along with realtors being VERY greedy.
We have 5 (almost 6) in the area and are fine (definitely down) but we paid less than $300k each for all ours between 2020-2021.
Taxes and insurance are getting pretty terrible though. The idea of Sevier county being a great place to invest for low taxes is no longer true.
This is exactly why I hate HELOC's and advise to never NEVER us a heloc to acquire investment property. DSCR, seller financing, or get more capitol.
It's just horrible to risk all that have done. Sad.
I disagree with both of your opinions.
Using Heloq's and owner financing for the right investment can be great. You just have to purchase the correct investment.
We just bought a house with owner financing. Minimal downpayment and no interest. The investment will pay for itself in 5 years, and I could buy an almost unlimited amount of these deals if I could find them.
We could have written a check for the property but why bother when we are getting 0% interest? We have it rented making more than the loan payment.
Well, I'd assume step 1 is you ask......
Well yeah but why would they say yes? Why would anyone essentially lend you potentially hundreds of thousands of dollars for free?
Genuinely asking...
I can honestly say; you'd be surprised....
You gotta picture the full context of things, from every side.
For the average person, if they had the cash they'd stick it in the bank right. What's the interest rate they get? Maybe as high as 1%. I've seen many at fractions of a percent.
Now add in situational factors.
Say they've been trying to sell the property for $400k, and go nothing. Dropped too $375k, $350k, and most recently at $335k and they got a handful of showings and one low-ball offer at $225k.......
Now you come along and say if you gotta pay for the straight-up purchase the most you can give is $250k. It needs work, the market isn't all that great, you got risk to think about, time to get things going, and the potential that it will take a year or 2 for things to get back into a good operating state to make $.
BUUUUT.... Since they own it free & clear, and don't have an immediate need for that $ because they already got primary home n all that.... You can offer some options.
If willing to do seller financed at the 3yrs to get to other side, and mitigate your $ out of pocket so you can focus your $ on reno, you could do 5/10% down and double the interest rate bank will give making it 2%, and you could go as high as $265k.
Or, if there investment focused and willing to work together.... You could go as high as $290k but, that's 5% down, and 3yrs no interest so you can focus all $ toward reno and running the place best possible to get through the tough market. You'll make monthly payments on principle through it all.
That's 1 quick "for instance" scenario off top of the head.
Some people don't need the $ right now, they have pension or whatever. And it's more about getting rid of the headache property that's actually been costing them $ every month. Sometimes eliminating what's been an expense, that alone is $ in there pocket. And they get-it that it's gonna cost you $ to do the various things, so changing how the buy is structured impacts the end $ you can pay for the place.
At least this is how I approach them.
The rare few say things like "but a mortgage would be ___" and I say sure, and if I had to get one and pay a bank that $ I can only afford to give you $____ for the purchase price. It's just the reality of the #'s.
And I hold, it's not a negotiation, I'm as ready to walk away as i am to do a deal, it's a take it or leave it. There choice of which way we go.
When they ask if I am negotiable on any of them I say "Sure, I'm happy to pay less" and I just leave it sit and sink in with a smile. And I mean it.
Is 0% interest rare, yeah it's rare in my experience but it's not impossible or unheard of. All depends on all the right factors lining up.
- Member since 2018 · 88 posts · 55 votes1y
Quote from @James Hamling:
Quote from @Yitzchok Carmen:
Quote from @James Hamling:
Quote from @Yitzchok Carmen:
How do you get owner financing for 0% interest? :)Quote from @John Underwood:
Quote from @James Hamling:
Quote from @Leora Merrell:
Quote from @Ken Boone:
Quote from @Collin Hays:
Quote from @Ken Boone:
Quote from @Collin Hays:
I had forgotten that, but now that you mention it, I recall hearing that. Probably a decent rule of thumb even for today.Quote from @Ken Boone:
I’ll add this. In the 2017-2018 time frame the general consensus was that given any cabin in the Smokies, most realtors were projecting income at 20k per year per bedroom. From what I saw at the time, these were good numbers to go by back then. @Collin Hays would you say those projections back then were on target?
And if we return to those 20k per bedroom numbers there will be wailing and gnashing of teeth! Because NOBODY that bought at 2023-2024 prices and leveraged it will make money.
Yeah I don't think those numbers are going to be very far off of reality. I have a number of clients who we have managed for many years that are doing just fine at $20K a room.
I visited with a gentleman this week who bought a 3/2 in May of 2023 for $810K-ish, and he is listing it for $650K-ish. He will probably get $550-600K. If he waits much longer, it will be $450-500K.
Yea that is gonna hurt! I got a buddy that's in a bad mess like that too.
I've got three friends in this mess too. And they used HELOC's on primaries for the down payment planning on 2022-2023 rents to continue to pay off the HELOC quickly. :( It's a real shame but I still don't see how people thought that would last forever. FOMO was absolutely real along with realtors being VERY greedy.
We have 5 (almost 6) in the area and are fine (definitely down) but we paid less than $300k each for all ours between 2020-2021.
Taxes and insurance are getting pretty terrible though. The idea of Sevier county being a great place to invest for low taxes is no longer true.
This is exactly why I hate HELOC's and advise to never NEVER us a heloc to acquire investment property. DSCR, seller financing, or get more capitol.
It's just horrible to risk all that have done. Sad.
I disagree with both of your opinions.
Using Heloq's and owner financing for the right investment can be great. You just have to purchase the correct investment.
We just bought a house with owner financing. Minimal downpayment and no interest. The investment will pay for itself in 5 years, and I could buy an almost unlimited amount of these deals if I could find them.
We could have written a check for the property but why bother when we are getting 0% interest? We have it rented making more than the loan payment.
Well, I'd assume step 1 is you ask......
Well yeah but why would they say yes? Why would anyone essentially lend you potentially hundreds of thousands of dollars for free?
Genuinely asking...
I can honestly say; you'd be surprised....
You gotta picture the full context of things, from every side.
For the average person, if they had the cash they'd stick it in the bank right. What's the interest rate they get? Maybe as high as 1%. I've seen many at fractions of a percent.
Now add in situational factors.
Say they've been trying to sell the property for $400k, and go nothing. Dropped too $375k, $350k, and most recently at $335k and they got a handful of showings and one low-ball offer at $225k.......
Now you come along and say if you gotta pay for the straight-up purchase the most you can give is $250k. It needs work, the market isn't all that great, you got risk to think about, time to get things going, and the potential that it will take a year or 2 for things to get back into a good operating state to make $.
BUUUUT.... Since they own it free & clear, and don't have an immediate need for that $ because they already got primary home n all that.... You can offer some options.
If willing to do seller financed at the 3yrs to get to other side, and mitigate your $ out of pocket so you can focus your $ on reno, you could do 5/10% down and double the interest rate bank will give making it 2%, and you could go as high as $265k.
Or, if there investment focused and willing to work together.... You could go as high as $290k but, that's 5% down, and 3yrs no interest so you can focus all $ toward reno and running the place best possible to get through the tough market. You'll make monthly payments on principle through it all.
That's 1 quick "for instance" scenario off top of the head.
Some people don't need the $ right now, they have pension or whatever. And it's more about getting rid of the headache property that's actually been costing them $ every month. Sometimes eliminating what's been an expense, that alone is $ in there pocket. And they get-it that it's gonna cost you $ to do the various things, so changing how the buy is structured impacts the end $ you can pay for the place.
At least this is how I approach them.
The rare few say things like "but a mortgage would be ___" and I say sure, and if I had to get one and pay a bank that $ I can only afford to give you $____ for the purchase price. It's just the reality of the #'s.
And I hold, it's not a negotiation, I'm as ready to walk away as i am to do a deal, it's a take it or leave it. There choice of which way we go.
When they ask if I am negotiable on any of them I say "Sure, I'm happy to pay less" and I just leave it sit and sink in with a smile. And I mean it.
Is 0% interest rare, yeah it's rare in my experience but it's not impossible or unheard of. All depends on all the right factors lining up.
This is very interesting. I hadn't thought of it like that. You are right I would probably be very surprised. In general how long is the loan for?
Lets say you offer 300k. With 10% down. So you are paying the owner the remaining 270k in installments at, lets say, no interest. If you pay that whole thing back within 5 years your monthly payment is waaay higher than had you gotten a 30 yr loan. Is the strategy to refi after purchase and rehab? Or will the sellers be willing to extend payments for decades?
I was thinking about this like a lotto winner where the vast majority take the lump sum now even though that means less in their pocket then annuity. So sellers also just want the lump sum now
- Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes1y
Quote from @Yitzchok Carmen:
Quote from @James Hamling:
Quote from @Yitzchok Carmen:
Quote from @James Hamling:
Quote from @Yitzchok Carmen:
How do you get owner financing for 0% interest? :)Quote from @John Underwood:
Quote from @James Hamling:
Quote from @Leora Merrell:
Quote from @Ken Boone:
Quote from @Collin Hays:
Quote from @Ken Boone:
Quote from @Collin Hays:
I had forgotten that, but now that you mention it, I recall hearing that. Probably a decent rule of thumb even for today.Quote from @Ken Boone:
I’ll add this. In the 2017-2018 time frame the general consensus was that given any cabin in the Smokies, most realtors were projecting income at 20k per year per bedroom. From what I saw at the time, these were good numbers to go by back then. @Collin Hays would you say those projections back then were on target?
And if we return to those 20k per bedroom numbers there will be wailing and gnashing of teeth! Because NOBODY that bought at 2023-2024 prices and leveraged it will make money.
Yeah I don't think those numbers are going to be very far off of reality. I have a number of clients who we have managed for many years that are doing just fine at $20K a room.
I visited with a gentleman this week who bought a 3/2 in May of 2023 for $810K-ish, and he is listing it for $650K-ish. He will probably get $550-600K. If he waits much longer, it will be $450-500K.
Yea that is gonna hurt! I got a buddy that's in a bad mess like that too.
I've got three friends in this mess too. And they used HELOC's on primaries for the down payment planning on 2022-2023 rents to continue to pay off the HELOC quickly. :( It's a real shame but I still don't see how people thought that would last forever. FOMO was absolutely real along with realtors being VERY greedy.
We have 5 (almost 6) in the area and are fine (definitely down) but we paid less than $300k each for all ours between 2020-2021.
Taxes and insurance are getting pretty terrible though. The idea of Sevier county being a great place to invest for low taxes is no longer true.
This is exactly why I hate HELOC's and advise to never NEVER us a heloc to acquire investment property. DSCR, seller financing, or get more capitol.
It's just horrible to risk all that have done. Sad.
I disagree with both of your opinions.
Using Heloq's and owner financing for the right investment can be great. You just have to purchase the correct investment.
We just bought a house with owner financing. Minimal downpayment and no interest. The investment will pay for itself in 5 years, and I could buy an almost unlimited amount of these deals if I could find them.
We could have written a check for the property but why bother when we are getting 0% interest? We have it rented making more than the loan payment.
Well, I'd assume step 1 is you ask......
Well yeah but why would they say yes? Why would anyone essentially lend you potentially hundreds of thousands of dollars for free?
Genuinely asking...
I can honestly say; you'd be surprised....
You gotta picture the full context of things, from every side.
For the average person, if they had the cash they'd stick it in the bank right. What's the interest rate they get? Maybe as high as 1%. I've seen many at fractions of a percent.
Now add in situational factors.
Say they've been trying to sell the property for $400k, and go nothing. Dropped too $375k, $350k, and most recently at $335k and they got a handful of showings and one low-ball offer at $225k.......
Now you come along and say if you gotta pay for the straight-up purchase the most you can give is $250k. It needs work, the market isn't all that great, you got risk to think about, time to get things going, and the potential that it will take a year or 2 for things to get back into a good operating state to make $.
BUUUUT.... Since they own it free & clear, and don't have an immediate need for that $ because they already got primary home n all that.... You can offer some options.
If willing to do seller financed at the 3yrs to get to other side, and mitigate your $ out of pocket so you can focus your $ on reno, you could do 5/10% down and double the interest rate bank will give making it 2%, and you could go as high as $265k.
Or, if there investment focused and willing to work together.... You could go as high as $290k but, that's 5% down, and 3yrs no interest so you can focus all $ toward reno and running the place best possible to get through the tough market. You'll make monthly payments on principle through it all.
That's 1 quick "for instance" scenario off top of the head.
Some people don't need the $ right now, they have pension or whatever. And it's more about getting rid of the headache property that's actually been costing them $ every month. Sometimes eliminating what's been an expense, that alone is $ in there pocket. And they get-it that it's gonna cost you $ to do the various things, so changing how the buy is structured impacts the end $ you can pay for the place.
At least this is how I approach them.
The rare few say things like "but a mortgage would be ___" and I say sure, and if I had to get one and pay a bank that $ I can only afford to give you $____ for the purchase price. It's just the reality of the #'s.
And I hold, it's not a negotiation, I'm as ready to walk away as i am to do a deal, it's a take it or leave it. There choice of which way we go.
When they ask if I am negotiable on any of them I say "Sure, I'm happy to pay less" and I just leave it sit and sink in with a smile. And I mean it.
Is 0% interest rare, yeah it's rare in my experience but it's not impossible or unheard of. All depends on all the right factors lining up.
This is very interesting. I hadn't thought of it like that. You are right I would probably be very surprised. In general how long is the loan for?
Lets say you offer 300k. With 10% down. So you are paying the owner the remaining 270k in installments at, lets say, no interest. If you pay that whole thing back within 5 years your monthly payment is waaay higher than had you gotten a 30 yr loan. Is the strategy to refi after purchase and rehab? Or will the sellers be willing to extend payments for decades?
I was thinking about this like a lotto winner where the vast majority take the lump sum now even though that means less in their pocket then annuity. So sellers also just want the lump sum now
The thing with seller financing is there is a very wide array of ways you can do it.
Myself, my style is we generally set payments based on a 30yr amortization schedule. I got a friend who uses a 20yr amortization schedule. But you could also just set an amount.
I most often do 3yr or 5yr terms with a final balloon payment.
I don't ever try for 10, 20, 30yr terms, that just seems ridiculous to me.
I approach it from start that my exits are market sale or finance out of it. Starting with multiple exist strategies is a must-do.
And for me these are all but always value-add deals.
I have known of some trying or doing some of these with properties that have no value-add to them, and just used it as a way of acquiring a property that didn't pencil out and there kind of hacking a way to get it, hoping and betting on appreciation saving them in the end. This seems dumb to me. But they keep there down low enough so if it all goes pear shaped they will just walk away and assume they will have profits from the rents or limited losses. Again, seems dumb to me but hey people throw $ away on stupid options every day.
There is a few key elements to it right.
The property has a small enough existing mortgage vs FMV or is free & clear. Well, to get there generally means seller has owned it many years. If seller has owned it many years that generally means there is also work to be done. I find a very common theme in the properties and sellers that are a fit.
Now could you try this with some of those newer built fancy-pants places built for say $800k spent that nobody is willing to pay even $700k for today...... Pitching that you'll do it at $800k making them net-0 but to do it you need to be low down, 0% interest, 3-5yr term and $_____ monthly payment..... I mean sure, and I bet it would work to land some. But know going in your taking a gamble on where market price will be in those years to come. And if it's not there, your walking away and a possibility that seller will try to sue to force performance. SO gotta make sure it's correctly entered and written. Not to mention loosing what you stuck into it.
There is a huge ocean of opportunity out there with seller financing, HUGE.
I do them literally all the time. I have like 4 right now, today going. There all over the place you just gotta dig for em. And i still get asked the same #1 question about seller financing "yeah, but, is there really sellers out there willing to do seller financing" lol. Ah yeah, it's not like I am taking the entire bulk of em all myself. I am less then a flea in my volume vs what's out there..... I am a flea on the flea who's scratching the surface of the St Bernard that's the opportunities out there just waiting for someone with some know how to pitch it.
- 1yJohn UnderwoodPro MemberInvestor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
Quote from @Yitzchok Carmen:
How do you get owner financing for 0% interest? :)Quote from @John Underwood:
Quote from @James Hamling:
Quote from @Leora Merrell:
Quote from @Ken Boone:
Quote from @Collin Hays:
Quote from @Ken Boone:
Quote from @Collin Hays:
I had forgotten that, but now that you mention it, I recall hearing that. Probably a decent rule of thumb even for today.Quote from @Ken Boone:
I’ll add this. In the 2017-2018 time frame the general consensus was that given any cabin in the Smokies, most realtors were projecting income at 20k per year per bedroom. From what I saw at the time, these were good numbers to go by back then. @Collin Hays would you say those projections back then were on target?
And if we return to those 20k per bedroom numbers there will be wailing and gnashing of teeth! Because NOBODY that bought at 2023-2024 prices and leveraged it will make money.
Yeah I don't think those numbers are going to be very far off of reality. I have a number of clients who we have managed for many years that are doing just fine at $20K a room.
I visited with a gentleman this week who bought a 3/2 in May of 2023 for $810K-ish, and he is listing it for $650K-ish. He will probably get $550-600K. If he waits much longer, it will be $450-500K.
Yea that is gonna hurt! I got a buddy that's in a bad mess like that too.
I've got three friends in this mess too. And they used HELOC's on primaries for the down payment planning on 2022-2023 rents to continue to pay off the HELOC quickly. :( It's a real shame but I still don't see how people thought that would last forever. FOMO was absolutely real along with realtors being VERY greedy.
We have 5 (almost 6) in the area and are fine (definitely down) but we paid less than $300k each for all ours between 2020-2021.
Taxes and insurance are getting pretty terrible though. The idea of Sevier county being a great place to invest for low taxes is no longer true.
This is exactly why I hate HELOC's and advise to never NEVER us a heloc to acquire investment property. DSCR, seller financing, or get more capitol.
It's just horrible to risk all that have done. Sad.
I disagree with both of your opinions.
Using Heloq's and owner financing for the right investment can be great. You just have to purchase the correct investment.
We just bought a house with owner financing. Minimal downpayment and no interest. The investment will pay for itself in 5 years, and I could buy an almost unlimited amount of these deals if I could find them.
We could have written a check for the property but why bother when we are getting 0% interest? We have it rented making more than the loan payment.
Just ask. All they can say is no. You don't know if you don't ask.
- 1yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Yitzchok Carmen:
Quote from @James Hamling:
Quote from @Yitzchok Carmen:
Quote from @James Hamling:
Quote from @Yitzchok Carmen:
How do you get owner financing for 0% interest? :)Quote from @John Underwood:
Quote from @James Hamling:
Quote from @Leora Merrell:
Quote from @Ken Boone:
Quote from @Collin Hays:
Quote from @Ken Boone:
Quote from @Collin Hays:
I had forgotten that, but now that you mention it, I recall hearing that. Probably a decent rule of thumb even for today.Quote from @Ken Boone:
I’ll add this. In the 2017-2018 time frame the general consensus was that given any cabin in the Smokies, most realtors were projecting income at 20k per year per bedroom. From what I saw at the time, these were good numbers to go by back then. @Collin Hays would you say those projections back then were on target?
And if we return to those 20k per bedroom numbers there will be wailing and gnashing of teeth! Because NOBODY that bought at 2023-2024 prices and leveraged it will make money.
Yeah I don't think those numbers are going to be very far off of reality. I have a number of clients who we have managed for many years that are doing just fine at $20K a room.
I visited with a gentleman this week who bought a 3/2 in May of 2023 for $810K-ish, and he is listing it for $650K-ish. He will probably get $550-600K. If he waits much longer, it will be $450-500K.
Yea that is gonna hurt! I got a buddy that's in a bad mess like that too.
I've got three friends in this mess too. And they used HELOC's on primaries for the down payment planning on 2022-2023 rents to continue to pay off the HELOC quickly. :( It's a real shame but I still don't see how people thought that would last forever. FOMO was absolutely real along with realtors being VERY greedy.
We have 5 (almost 6) in the area and are fine (definitely down) but we paid less than $300k each for all ours between 2020-2021.
Taxes and insurance are getting pretty terrible though. The idea of Sevier county being a great place to invest for low taxes is no longer true.
This is exactly why I hate HELOC's and advise to never NEVER us a heloc to acquire investment property. DSCR, seller financing, or get more capitol.
It's just horrible to risk all that have done. Sad.
I disagree with both of your opinions.
Using Heloq's and owner financing for the right investment can be great. You just have to purchase the correct investment.
We just bought a house with owner financing. Minimal downpayment and no interest. The investment will pay for itself in 5 years, and I could buy an almost unlimited amount of these deals if I could find them.
We could have written a check for the property but why bother when we are getting 0% interest? We have it rented making more than the loan payment.
Well, I'd assume step 1 is you ask......
Well yeah but why would they say yes? Why would anyone essentially lend you potentially hundreds of thousands of dollars for free?
Genuinely asking...
I can honestly say; you'd be surprised....
You gotta picture the full context of things, from every side.
For the average person, if they had the cash they'd stick it in the bank right. What's the interest rate they get? Maybe as high as 1%. I've seen many at fractions of a percent.
Now add in situational factors.
Say they've been trying to sell the property for $400k, and go nothing. Dropped too $375k, $350k, and most recently at $335k and they got a handful of showings and one low-ball offer at $225k.......
Now you come along and say if you gotta pay for the straight-up purchase the most you can give is $250k. It needs work, the market isn't all that great, you got risk to think about, time to get things going, and the potential that it will take a year or 2 for things to get back into a good operating state to make $.
BUUUUT.... Since they own it free & clear, and don't have an immediate need for that $ because they already got primary home n all that.... You can offer some options.
If willing to do seller financed at the 3yrs to get to other side, and mitigate your $ out of pocket so you can focus your $ on reno, you could do 5/10% down and double the interest rate bank will give making it 2%, and you could go as high as $265k.
Or, if there investment focused and willing to work together.... You could go as high as $290k but, that's 5% down, and 3yrs no interest so you can focus all $ toward reno and running the place best possible to get through the tough market. You'll make monthly payments on principle through it all.
That's 1 quick "for instance" scenario off top of the head.
Some people don't need the $ right now, they have pension or whatever. And it's more about getting rid of the headache property that's actually been costing them $ every month. Sometimes eliminating what's been an expense, that alone is $ in there pocket. And they get-it that it's gonna cost you $ to do the various things, so changing how the buy is structured impacts the end $ you can pay for the place.
At least this is how I approach them.
The rare few say things like "but a mortgage would be ___" and I say sure, and if I had to get one and pay a bank that $ I can only afford to give you $____ for the purchase price. It's just the reality of the #'s.
And I hold, it's not a negotiation, I'm as ready to walk away as i am to do a deal, it's a take it or leave it. There choice of which way we go.
When they ask if I am negotiable on any of them I say "Sure, I'm happy to pay less" and I just leave it sit and sink in with a smile. And I mean it.
Is 0% interest rare, yeah it's rare in my experience but it's not impossible or unheard of. All depends on all the right factors lining up.
This is very interesting. I hadn't thought of it like that. You are right I would probably be very surprised. In general how long is the loan for?
Lets say you offer 300k. With 10% down. So you are paying the owner the remaining 270k in installments at, lets say, no interest. If you pay that whole thing back within 5 years your monthly payment is waaay higher than had you gotten a 30 yr loan. Is the strategy to refi after purchase and rehab? Or will the sellers be willing to extend payments for decades?
I was thinking about this like a lotto winner where the vast majority take the lump sum now even though that means less in their pocket then annuity. So sellers also just want the lump sum now
back in the bad days 2010 2011 when I had about 200 props i foreclosed on I sold many of them with zero interest financing payable over 30 to 60 months.. Never had one miss a payment I liked it as well as the investors if they gut it out and can afford it then owned them free and clear in a short amount of time ... great for thee industry long term. - Member since 2018 · 88 posts · 55 votes1y
Quote from @James Hamling:
Quote from @Yitzchok Carmen:
Quote from @James Hamling:
Quote from @Yitzchok Carmen:
Quote from @James Hamling:
Quote from @Yitzchok Carmen:
How do you get owner financing for 0% interest? :)Quote from @John Underwood:
Quote from @James Hamling:
Quote from @Leora Merrell:
Quote from @Ken Boone:
Quote from @Collin Hays:
Quote from @Ken Boone:
Quote from @Collin Hays:
I had forgotten that, but now that you mention it, I recall hearing that. Probably a decent rule of thumb even for today.Quote from @Ken Boone:
I’ll add this. In the 2017-2018 time frame the general consensus was that given any cabin in the Smokies, most realtors were projecting income at 20k per year per bedroom. From what I saw at the time, these were good numbers to go by back then. @Collin Hays would you say those projections back then were on target?
And if we return to those 20k per bedroom numbers there will be wailing and gnashing of teeth! Because NOBODY that bought at 2023-2024 prices and leveraged it will make money.
Yeah I don't think those numbers are going to be very far off of reality. I have a number of clients who we have managed for many years that are doing just fine at $20K a room.
I visited with a gentleman this week who bought a 3/2 in May of 2023 for $810K-ish, and he is listing it for $650K-ish. He will probably get $550-600K. If he waits much longer, it will be $450-500K.
Yea that is gonna hurt! I got a buddy that's in a bad mess like that too.
I've got three friends in this mess too. And they used HELOC's on primaries for the down payment planning on 2022-2023 rents to continue to pay off the HELOC quickly. :( It's a real shame but I still don't see how people thought that would last forever. FOMO was absolutely real along with realtors being VERY greedy.
We have 5 (almost 6) in the area and are fine (definitely down) but we paid less than $300k each for all ours between 2020-2021.
Taxes and insurance are getting pretty terrible though. The idea of Sevier county being a great place to invest for low taxes is no longer true.
This is exactly why I hate HELOC's and advise to never NEVER us a heloc to acquire investment property. DSCR, seller financing, or get more capitol.
It's just horrible to risk all that have done. Sad.
I disagree with both of your opinions.
Using Heloq's and owner financing for the right investment can be great. You just have to purchase the correct investment.
We just bought a house with owner financing. Minimal downpayment and no interest. The investment will pay for itself in 5 years, and I could buy an almost unlimited amount of these deals if I could find them.
We could have written a check for the property but why bother when we are getting 0% interest? We have it rented making more than the loan payment.
Well, I'd assume step 1 is you ask......
Well yeah but why would they say yes? Why would anyone essentially lend you potentially hundreds of thousands of dollars for free?
Genuinely asking...
I can honestly say; you'd be surprised....
You gotta picture the full context of things, from every side.
For the average person, if they had the cash they'd stick it in the bank right. What's the interest rate they get? Maybe as high as 1%. I've seen many at fractions of a percent.
Now add in situational factors.
Say they've been trying to sell the property for $400k, and go nothing. Dropped too $375k, $350k, and most recently at $335k and they got a handful of showings and one low-ball offer at $225k.......
Now you come along and say if you gotta pay for the straight-up purchase the most you can give is $250k. It needs work, the market isn't all that great, you got risk to think about, time to get things going, and the potential that it will take a year or 2 for things to get back into a good operating state to make $.
BUUUUT.... Since they own it free & clear, and don't have an immediate need for that $ because they already got primary home n all that.... You can offer some options.
If willing to do seller financed at the 3yrs to get to other side, and mitigate your $ out of pocket so you can focus your $ on reno, you could do 5/10% down and double the interest rate bank will give making it 2%, and you could go as high as $265k.
Or, if there investment focused and willing to work together.... You could go as high as $290k but, that's 5% down, and 3yrs no interest so you can focus all $ toward reno and running the place best possible to get through the tough market. You'll make monthly payments on principle through it all.
That's 1 quick "for instance" scenario off top of the head.
Some people don't need the $ right now, they have pension or whatever. And it's more about getting rid of the headache property that's actually been costing them $ every month. Sometimes eliminating what's been an expense, that alone is $ in there pocket. And they get-it that it's gonna cost you $ to do the various things, so changing how the buy is structured impacts the end $ you can pay for the place.
At least this is how I approach them.
The rare few say things like "but a mortgage would be ___" and I say sure, and if I had to get one and pay a bank that $ I can only afford to give you $____ for the purchase price. It's just the reality of the #'s.
And I hold, it's not a negotiation, I'm as ready to walk away as i am to do a deal, it's a take it or leave it. There choice of which way we go.
When they ask if I am negotiable on any of them I say "Sure, I'm happy to pay less" and I just leave it sit and sink in with a smile. And I mean it.
Is 0% interest rare, yeah it's rare in my experience but it's not impossible or unheard of. All depends on all the right factors lining up.
This is very interesting. I hadn't thought of it like that. You are right I would probably be very surprised. In general how long is the loan for?
Lets say you offer 300k. With 10% down. So you are paying the owner the remaining 270k in installments at, lets say, no interest. If you pay that whole thing back within 5 years your monthly payment is waaay higher than had you gotten a 30 yr loan. Is the strategy to refi after purchase and rehab? Or will the sellers be willing to extend payments for decades?
I was thinking about this like a lotto winner where the vast majority take the lump sum now even though that means less in their pocket then annuity. So sellers also just want the lump sum now
The thing with seller financing is there is a very wide array of ways you can do it.
Myself, my style is we generally set payments based on a 30yr amortization schedule. I got a friend who uses a 20yr amortization schedule. But you could also just set an amount.
I most often do 3yr or 5yr terms with a final balloon payment.
I don't ever try for 10, 20, 30yr terms, that just seems ridiculous to me.
I approach it from start that my exits are market sale or finance out of it. Starting with multiple exist strategies is a must-do.
And for me these are all but always value-add deals.
I have known of some trying or doing some of these with properties that have no value-add to them, and just used it as a way of acquiring a property that didn't pencil out and there kind of hacking a way to get it, hoping and betting on appreciation saving them in the end. This seems dumb to me. But they keep there down low enough so if it all goes pear shaped they will just walk away and assume they will have profits from the rents or limited losses. Again, seems dumb to me but hey people throw $ away on stupid options every day.
There is a few key elements to it right.
The property has a small enough existing mortgage vs FMV or is free & clear. Well, to get there generally means seller has owned it many years. If seller has owned it many years that generally means there is also work to be done. I find a very common theme in the properties and sellers that are a fit.
Now could you try this with some of those newer built fancy-pants places built for say $800k spent that nobody is willing to pay even $700k for today...... Pitching that you'll do it at $800k making them net-0 but to do it you need to be low down, 0% interest, 3-5yr term and $_____ monthly payment..... I mean sure, and I bet it would work to land some. But know going in your taking a gamble on where market price will be in those years to come. And if it's not there, your walking away and a possibility that seller will try to sue to force performance. SO gotta make sure it's correctly entered and written. Not to mention loosing what you stuck into it.
There is a huge ocean of opportunity out there with seller financing, HUGE.
I do them literally all the time. I have like 4 right now, today going. There all over the place you just gotta dig for em. And i still get asked the same #1 question about seller financing "yeah, but, is there really sellers out there willing to do seller financing" lol. Ah yeah, it's not like I am taking the entire bulk of em all myself. I am less then a flea in my volume vs what's out there..... I am a flea on the flea who's scratching the surface of the St Bernard that's the opportunities out there just waiting for someone with some know how to pitch it.
This is great.
Yes I agree with you 100% on the value add. Most of my cabins were value add deals bc turn key was priced too high for me to be comfortable with.
Do you use a realtor to pitch it or do you just go straight to sellers realtor? I guess my question is do the realtors mess things up and talk their client out of it, or do they push it bc they get a commission if it closes?
And dumb question, is there an easy way to see which properties on the market have a low or no mortgage wo needing to search each one manually?
- Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes1y
Quote from @Yitzchok Carmen:
Quote from @James Hamling:
Quote from @Yitzchok Carmen:
Quote from @James Hamling:
Quote from @Yitzchok Carmen:
Quote from @James Hamling:
Quote from @Yitzchok Carmen:
How do you get owner financing for 0% interest? :)Quote from @John Underwood:
Quote from @James Hamling:
Quote from @Leora Merrell:
Quote from @Ken Boone:
Quote from @Collin Hays:
Quote from @Ken Boone:
Quote from @Collin Hays:
I had forgotten that, but now that you mention it, I recall hearing that. Probably a decent rule of thumb even for today.Quote from @Ken Boone:
I’ll add this. In the 2017-2018 time frame the general consensus was that given any cabin in the Smokies, most realtors were projecting income at 20k per year per bedroom. From what I saw at the time, these were good numbers to go by back then. @Collin Hays would you say those projections back then were on target?
And if we return to those 20k per bedroom numbers there will be wailing and gnashing of teeth! Because NOBODY that bought at 2023-2024 prices and leveraged it will make money.
Yeah I don't think those numbers are going to be very far off of reality. I have a number of clients who we have managed for many years that are doing just fine at $20K a room.
I visited with a gentleman this week who bought a 3/2 in May of 2023 for $810K-ish, and he is listing it for $650K-ish. He will probably get $550-600K. If he waits much longer, it will be $450-500K.
Yea that is gonna hurt! I got a buddy that's in a bad mess like that too.
I've got three friends in this mess too. And they used HELOC's on primaries for the down payment planning on 2022-2023 rents to continue to pay off the HELOC quickly. :( It's a real shame but I still don't see how people thought that would last forever. FOMO was absolutely real along with realtors being VERY greedy.
We have 5 (almost 6) in the area and are fine (definitely down) but we paid less than $300k each for all ours between 2020-2021.
Taxes and insurance are getting pretty terrible though. The idea of Sevier county being a great place to invest for low taxes is no longer true.
This is exactly why I hate HELOC's and advise to never NEVER us a heloc to acquire investment property. DSCR, seller financing, or get more capitol.
It's just horrible to risk all that have done. Sad.
I disagree with both of your opinions.
Using Heloq's and owner financing for the right investment can be great. You just have to purchase the correct investment.
We just bought a house with owner financing. Minimal downpayment and no interest. The investment will pay for itself in 5 years, and I could buy an almost unlimited amount of these deals if I could find them.
We could have written a check for the property but why bother when we are getting 0% interest? We have it rented making more than the loan payment.
Well, I'd assume step 1 is you ask......
Well yeah but why would they say yes? Why would anyone essentially lend you potentially hundreds of thousands of dollars for free?
Genuinely asking...
I can honestly say; you'd be surprised....
You gotta picture the full context of things, from every side.
For the average person, if they had the cash they'd stick it in the bank right. What's the interest rate they get? Maybe as high as 1%. I've seen many at fractions of a percent.
Now add in situational factors.
Say they've been trying to sell the property for $400k, and go nothing. Dropped too $375k, $350k, and most recently at $335k and they got a handful of showings and one low-ball offer at $225k.......
Now you come along and say if you gotta pay for the straight-up purchase the most you can give is $250k. It needs work, the market isn't all that great, you got risk to think about, time to get things going, and the potential that it will take a year or 2 for things to get back into a good operating state to make $.
BUUUUT.... Since they own it free & clear, and don't have an immediate need for that $ because they already got primary home n all that.... You can offer some options.
If willing to do seller financed at the 3yrs to get to other side, and mitigate your $ out of pocket so you can focus your $ on reno, you could do 5/10% down and double the interest rate bank will give making it 2%, and you could go as high as $265k.
Or, if there investment focused and willing to work together.... You could go as high as $290k but, that's 5% down, and 3yrs no interest so you can focus all $ toward reno and running the place best possible to get through the tough market. You'll make monthly payments on principle through it all.
That's 1 quick "for instance" scenario off top of the head.
Some people don't need the $ right now, they have pension or whatever. And it's more about getting rid of the headache property that's actually been costing them $ every month. Sometimes eliminating what's been an expense, that alone is $ in there pocket. And they get-it that it's gonna cost you $ to do the various things, so changing how the buy is structured impacts the end $ you can pay for the place.
At least this is how I approach them.
The rare few say things like "but a mortgage would be ___" and I say sure, and if I had to get one and pay a bank that $ I can only afford to give you $____ for the purchase price. It's just the reality of the #'s.
And I hold, it's not a negotiation, I'm as ready to walk away as i am to do a deal, it's a take it or leave it. There choice of which way we go.
When they ask if I am negotiable on any of them I say "Sure, I'm happy to pay less" and I just leave it sit and sink in with a smile. And I mean it.
Is 0% interest rare, yeah it's rare in my experience but it's not impossible or unheard of. All depends on all the right factors lining up.
This is very interesting. I hadn't thought of it like that. You are right I would probably be very surprised. In general how long is the loan for?
Lets say you offer 300k. With 10% down. So you are paying the owner the remaining 270k in installments at, lets say, no interest. If you pay that whole thing back within 5 years your monthly payment is waaay higher than had you gotten a 30 yr loan. Is the strategy to refi after purchase and rehab? Or will the sellers be willing to extend payments for decades?
I was thinking about this like a lotto winner where the vast majority take the lump sum now even though that means less in their pocket then annuity. So sellers also just want the lump sum now
The thing with seller financing is there is a very wide array of ways you can do it.
Myself, my style is we generally set payments based on a 30yr amortization schedule. I got a friend who uses a 20yr amortization schedule. But you could also just set an amount.
I most often do 3yr or 5yr terms with a final balloon payment.
I don't ever try for 10, 20, 30yr terms, that just seems ridiculous to me.
I approach it from start that my exits are market sale or finance out of it. Starting with multiple exist strategies is a must-do.
And for me these are all but always value-add deals.
I have known of some trying or doing some of these with properties that have no value-add to them, and just used it as a way of acquiring a property that didn't pencil out and there kind of hacking a way to get it, hoping and betting on appreciation saving them in the end. This seems dumb to me. But they keep there down low enough so if it all goes pear shaped they will just walk away and assume they will have profits from the rents or limited losses. Again, seems dumb to me but hey people throw $ away on stupid options every day.
There is a few key elements to it right.
The property has a small enough existing mortgage vs FMV or is free & clear. Well, to get there generally means seller has owned it many years. If seller has owned it many years that generally means there is also work to be done. I find a very common theme in the properties and sellers that are a fit.
Now could you try this with some of those newer built fancy-pants places built for say $800k spent that nobody is willing to pay even $700k for today...... Pitching that you'll do it at $800k making them net-0 but to do it you need to be low down, 0% interest, 3-5yr term and $_____ monthly payment..... I mean sure, and I bet it would work to land some. But know going in your taking a gamble on where market price will be in those years to come. And if it's not there, your walking away and a possibility that seller will try to sue to force performance. SO gotta make sure it's correctly entered and written. Not to mention loosing what you stuck into it.
There is a huge ocean of opportunity out there with seller financing, HUGE.
I do them literally all the time. I have like 4 right now, today going. There all over the place you just gotta dig for em. And i still get asked the same #1 question about seller financing "yeah, but, is there really sellers out there willing to do seller financing" lol. Ah yeah, it's not like I am taking the entire bulk of em all myself. I am less then a flea in my volume vs what's out there..... I am a flea on the flea who's scratching the surface of the St Bernard that's the opportunities out there just waiting for someone with some know how to pitch it.
This is great.
Yes I agree with you 100% on the value add. Most of my cabins were value add deals bc turn key was priced too high for me to be comfortable with.
Do you use a realtor to pitch it or do you just go straight to sellers realtor? I guess my question is do the realtors mess things up and talk their client out of it, or do they push it bc they get a commission if it closes?
And dumb question, is there an easy way to see which properties on the market have a low or no mortgage wo needing to search each one manually?
Well, I am a Real Estate Broker and I like using the best tool for a job so I hire the best R.E. Broker I know to ever broker.... myself, lol.
Ok, all joking aside.
Yeah that's a great question. yes, most agents do and will mess it all up or try to talk a seller other direction and I find it's not because there opposed to it or think it bad for there clients, it's because there simply clueless on how it all works.
Keep in mind 80%+ of agents out there literally know next to nothing, seriously. They bought a program that hand held them through mandatory hours, they just got licensed, and follow a very basic instruction from team leader to just "sell' what there t'd up on.
And even most who are considered "good" or top-producers, even 80% of them are also clueless because there 1-hit-wonders. They are very skilled at the 1 thing they do.
And all these people are ego-freaks so admitting they don't know something is like donating a kidney.
I get a different reaction because I am a Broker, and I contact as a Broker and the agents are way more open to talking things through, asking me questions and working through it. Back when I was just an agent other agents were way less open and respectful.
Before I was ever licensed I found a good broker who knew and understood all this and I hired him. I didn't technically need him as i knew it all and was well experienced but I needed him to get through those gate keepers, it was what it was.
So I suggest that, find a good broker who is skilled and experienced in this to work with/for you. Yes it will cost $ per deal but it's gonna save deals that you wouldn't otherwise land and it will greatly streamline the process.
I don't know off hand all the ways there to best screen for and see the details. There is a slew of companies you can buy data from, like this, but there may be some easier ways.
Personally I look at each property I am interested in, and I can see mortgage history. I'm not looking to pump out 100 offers a week, I am quality over quantity. Your style may be different, IDK, you gotta find what fit's for you.
If your half as good at STR as you say, if I were in your shoes I'd be out there cranking up a blitz program to connect with properties right now. I'd be focused on arbitrage as my primary strategy. I'd be looking to get those $800k+ properties with OOS owners who have or are a failing STR operator. I'd key in on what is there cost of net-0 ownership. I'd pitch that with the market I can't buy them out to net-0 but I can help with making the cost of getting to net-0 or profit, net-0, which is TIME. That I can take the property over, on lease with option or C4D in instances that make sense. That I'd run and operate it as STR, I take on all the hosting work, headaches, hassles and i am covering the assorted operational and other expenses to get it at net-0 or as close to it as possible so this investment can get through this market cycle and back to a future date of being a net profit for as little $ out of pocket for them as possible VS selling now or soon and taking that 6 figure loss.
There big beautiful places, I'd target those already furnished, so only furnishing I am doing is any additional.
The solution for them is no more headaches or distraction of managing it or managing the managers, it's on cruise control for them, mitigated expense and just waiting out the market for a few years to save the loss they'd take now. If that's a $200k loss now...... that's the value your immediately providing, $200k+.
Yeah, I'd be Mr Arbitrage.
And you could scale up at a heck of a rate. your capital outlay would be laughably minimal.
As i think it through I'd probably pitch it in form of the most minimal set payments/expenses on my side just really getting to net-0, and then I'd offer a profit share % on top of that. What % all depends on what that expense basis is to get them to net-0.
Now picture..... Your a veterinarian in San Diego, you built this $900k STR in the Smokies because so-n-so said it was a sure thing investment. Now, it's loosing you $ every month, it's constant stream of e-mails on this n that, it's distracting and stressing you out. You are thinking sell but agent is saying your gonna take a $225k bath on it. And then this local STR operator say's they will help. No more headaches, no more e-mails, no more distractions. No more stress over all the bills every month, your not making $ but your not loosing it either. And this pro is taking care of everything, out of sight out of mind, and only question is will it be 3 or 5 years before sell it and will you save the $225k you'd loose now or maybe let it go longer and pocket $250k+.......
I'd be all over that building a name for myself and cherry-picking. And doing lot's n lots of follow-up because every no this week is fair chance of a yes a couple months from now.
This is a great market and an even greater example of simple economics.
Here is my take on the market now and what led us to where we're at and where i think its going.
1) The numbers precovid were actually very strong. But they were very strong for a lot of STR markets back then too.
2) The covid years created a bubble for the bigger cabins. During covid the numbers on the smaller one and two bedroom cabins were not that great. Paying 450k to 500k for 1bed cabins that rented between 45k to 55k. Or Paying 600k to 625k for 2 bed cabins that rented between 50k to 65k.
The larger 3's (2,000 sq ft) or 4's (2,200 to 3,000) were going for 400/sq ft to 440/sq ft but were renting out for 100 to 120k on the 3's (that were selling for 800k to 850k) and 110 to 140k for the 4's (selling for 900k to 1.2 mil).
You could make some really nice money on the 3's and 4's with those numbers. Not so much on the 1's.
So everybody starting building big cabins.
3) Reality hit and supply and demand rules kicked in. And by the time covid ended, those large cabins all started coming online. And the money people had to buy dried up and the interest rates doubled from 3.5 to 7 so the cash flow fell apart too. Economics law of supply and demand on the rentals and the returns.
Rents dropped because you had a lot more inventory of the larger cabins and a lot less visitors wanting to rent the bigger cabins because they really didn't need that size rental.
That however drove up the rents on the one and two bedrooms quite a bit. Because there you now had the 3 and 4 cabin renters wanting the ones and twos. AND you really didn't have many people building ones and twos so the growth in inventory was small.
4) So right now what you have is the bigger cabins aren't moving at all and nothing is being built or sold for 3 or 4 bedroom cabins. That should help the existing owners of the bigger cabins though over time because there are very very few bigger new cabins being built. The few that are are available at cut rate prices.
Now the smaller cabins are selling extremely well. And their prices are continuing to go up. Why? Because their rents are continuing to go up. The one bedroom (1,000 to 1,200 sq ft) cabins are going for 550k to 600k right now. The rents are 50k to 65k. And the twos (1,400 to 1600 sq ft) are going for 650k to 725k with rents between 60k to 75k even.
This is where we're at right now. The building has been way off for the past 2 years now. Now I'm only talking about cabins there and not apartments or hotels. But anybody that says otherwise is either lying or misinformed. We are a builder out there and we talk with the building permit offices and the health dept that does septic permits. So there is zero doubt that the builds are way down - even from precovid levels.
Overall visitors are definitely down there as you would expect given that most areas in the country are. But this idea that this area is busted is silly. I see this market exactly like I saw the years after the crash of 08. Overbuilding to the extreme during covid just like the 05 to 07 years in the national market did. And now slowly, the nominal level of building going on is going to suck up the oversupply and then the area is going to deliver a great return like it always has.
Its become one of those areas like nashville and/or disney. Once you get enough attractions, the people will come. The more people that come, the more attractions continue to be added because they can make money. And its a snowball that feeds itself. Whats unique about the area is that its driven by STRs unlike a majority of markets - so you never have to worry about some crazy regulations to restrict the use of the homes for STRs.
I would tell anyone looking to invest right now, that you could really walk away with some really nice equity if you were to go buy 2 or 3 of the bigger cabins at these prices - but not new construction. Buy the pre-existing where the discounts are significant. In 2 to 4 years, those cabins that you can buy for 300/sq ft are going to go back up to that 425 to 450/sq ft price point.
And if you're looking for something that will definitely cash flow and you can get in now - I'd look at the one and two bedrooms. I think even though people are seeing the prices and rents of those doing well, they are still not interested in building anywhere near what the demand is calling for. My guess for that would be they just aren't the big homeruns that those bigger cabins were a few years ago and most of the people building out there are NOT first timers, they're the experienced owners who have seen huge wins and now they're gun shy on doing anything.
Again. I went through the 08 to 2018 or so period where 08 to 2014, everyone told me I was crazy for buying sfh's as rentals. People had such a bad taste for real estate during that period it was silly. Toxic is the only way to describe it. But follow the numbers. The numbers tell me that the smaller ones are going to cash flow now and in the future. And the bigger ones are going to be a great way for equity capture going forward.
Its all about supply and demand just like it was right after the crash when building came to an absolute halt and never returned - even to precrash levels. This idea that people see a cabin or two being built around them doesn't reflect the true numbers. The building permits tells you the real numbers and the permits are down significantly even from precovid levels.
All that being said. I don't believe its truly investing if I'm paying retail for anything. So I should add the caveat that my absolute confidence in the market is also based on the fact that I'm building cabins myself and doing it at 65 to 70 cents on the dollar. So the cash flow works better there. And the equity capture is solid too. Its the BRRR method but with new construction.
But where theres doom and gloom, there's opportunity. So if you really believe that a bunch of cabins are going to get foreclosed on, then you should go ahead and start putting in offers.
But I can also tell you that I've been watching the master clerk's website for several years now looking for deals to maybe come out. And you simply don't see cabins going to foreclosure maybe ever! It just doesn't happen...... I would guess I've seen 2 or 3 in total over the last 4 years.......- Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes1y
Quote from @Mike H.:
This is a great market and an even greater example of simple economics.
Here is my take on the market now and what led us to where we're at and where i think its going.
1) The numbers precovid were actually very strong. But they were very strong for a lot of STR markets back then too.
2) The covid years created a bubble for the bigger cabins. During covid the numbers on the smaller one and two bedroom cabins were not that great. Paying 450k to 500k for 1bed cabins that rented between 45k to 55k. Or Paying 600k to 625k for 2 bed cabins that rented between 50k to 65k.
The larger 3's (2,000 sq ft) or 4's (2,200 to 3,000) were going for 400/sq ft to 440/sq ft but were renting out for 100 to 120k on the 3's (that were selling for 800k to 850k) and 110 to 140k for the 4's (selling for 900k to 1.2 mil).
You could make some really nice money on the 3's and 4's with those numbers. Not so much on the 1's.
So everybody starting building big cabins.
3) Reality hit and supply and demand rules kicked in. And by the time covid ended, those large cabins all started coming online. And the money people had to buy dried up and the interest rates doubled from 3.5 to 7 so the cash flow fell apart too. Economics law of supply and demand on the rentals and the returns.
Rents dropped because you had a lot more inventory of the larger cabins and a lot less visitors wanting to rent the bigger cabins because they really didn't need that size rental.
That however drove up the rents on the one and two bedrooms quite a bit. Because there you now had the 3 and 4 cabin renters wanting the ones and twos. AND you really didn't have many people building ones and twos so the growth in inventory was small.
4) So right now what you have is the bigger cabins aren't moving at all and nothing is being built or sold for 3 or 4 bedroom cabins. That should help the existing owners of the bigger cabins though over time because there are very very few bigger new cabins being built. The few that are are available at cut rate prices.
Now the smaller cabins are selling extremely well. And their prices are continuing to go up. Why? Because their rents are continuing to go up. The one bedroom (1,000 to 1,200 sq ft) cabins are going for 550k to 600k right now. The rents are 50k to 65k. And the twos (1,400 to 1600 sq ft) are going for 650k to 725k with rents between 60k to 75k even.
This is where we're at right now. The building has been way off for the past 2 years now. Now I'm only talking about cabins there and not apartments or hotels. But anybody that says otherwise is either lying or misinformed. We are a builder out there and we talk with the building permit offices and the health dept that does septic permits. So there is zero doubt that the builds are way down - even from precovid levels.
Overall visitors are definitely down there as you would expect given that most areas in the country are. But this idea that this area is busted is silly. I see this market exactly like I saw the years after the crash of 08. Overbuilding to the extreme during covid just like the 05 to 07 years in the national market did. And now slowly, the nominal level of building going on is going to suck up the oversupply and then the area is going to deliver a great return like it always has.
Its become one of those areas like nashville and/or disney. Once you get enough attractions, the people will come. The more people that come, the more attractions continue to be added because they can make money. And its a snowball that feeds itself. Whats unique about the area is that its driven by STRs unlike a majority of markets - so you never have to worry about some crazy regulations to restrict the use of the homes for STRs.
I would tell anyone looking to invest right now, that you could really walk away with some really nice equity if you were to go buy 2 or 3 of the bigger cabins at these prices - but not new construction. Buy the pre-existing where the discounts are significant. In 2 to 4 years, those cabins that you can buy for 300/sq ft are going to go back up to that 425 to 450/sq ft price point.
And if you're looking for something that will definitely cash flow and you can get in now - I'd look at the one and two bedrooms. I think even though people are seeing the prices and rents of those doing well, they are still not interested in building anywhere near what the demand is calling for. My guess for that would be they just aren't the big homeruns that those bigger cabins were a few years ago and most of the people building out there are NOT first timers, they're the experienced owners who have seen huge wins and now they're gun shy on doing anything.
Again. I went through the 08 to 2018 or so period where 08 to 2014, everyone told me I was crazy for buying sfh's as rentals. People had such a bad taste for real estate during that period it was silly. Toxic is the only way to describe it. But follow the numbers. The numbers tell me that the smaller ones are going to cash flow now and in the future. And the bigger ones are going to be a great way for equity capture going forward.
Its all about supply and demand just like it was right after the crash when building came to an absolute halt and never returned - even to precrash levels. This idea that people see a cabin or two being built around them doesn't reflect the true numbers. The building permits tells you the real numbers and the permits are down significantly even from precovid levels.
All that being said. I don't believe its truly investing if I'm paying retail for anything. So I should add the caveat that my absolute confidence in the market is also based on the fact that I'm building cabins myself and doing it at 65 to 70 cents on the dollar. So the cash flow works better there. And the equity capture is solid too. Its the BRRR method but with new construction.
But where theres doom and gloom, there's opportunity. So if you really believe that a bunch of cabins are going to get foreclosed on, then you should go ahead and start putting in offers.
But I can also tell you that I've been watching the master clerk's website for several years now looking for deals to maybe come out. And you simply don't see cabins going to foreclosure maybe ever! It just doesn't happen...... I would guess I've seen 2 or 3 in total over the last 4 years.......Great info. I do want to point out that small cabins are not selling extremely well. According to Darlene Derosia, probably the most knowledgeable agent in the TN Smokies, EVERYTHING is dead right now.
Quote from @Mike H.:
2) The covid years created a bubble for the bigger cabins. During covid the numbers on the smaller one and two bedroom cabins were not that great. Paying 450k to 500k for 1bed cabins that rented between 45k to 55k. Or Paying 600k to 625k for 2 bed cabins that rented between 50k to 65k.I don't know where you got the smaller cabins were not great. I crushed it those years as well as everyone in my circle that had smaller cabins. My numbers were absolutely blowing through the roof those years.
We are no doubt in a cycle, but what we absolutely know for fact is that a lot of people bought in at 2023 and 2024 prices, expecting 2021 and 2022 rents. Many realtors pushed the idea of these numbers continuing, many pushed the 10% down loans cause you are gonna make so much money. And those people that leveraged heavily at the 2023 and 2024 prices are not going to make it through this next year. I don't know how many there are but I personally know several myself. They are going to have to eat heavy losses or sale at a loss to get out. Right now most of these people are not there yet, but a lot of them will be soon. I think most of them will hold on through summer because just about everything is going to book for summer, but when they hit the September lull it will be back to reality for these folks.
Right now the prices are all over the place. Most are priced too high and most are priced where they will not cash flow in a leveraged situation. We are back to the days where you buy a cabin now because you want a second home and you rent it out to help pay for it, not the days where you buy a cabin for the great cash flow.
The cycle will have to continue on a downward trend before we get to that point again. You are at an advantage building yourself at 65 to 70 cent on the dollar. That is about the only way to make money if you are investing in this market today at the current prices.
You are right about opportunity. It will be coming but we are not there yet.
Honestly I would not have expected you to see many foreclosures in the last 4 years. The people that bought up through 2022 had no reason to go to foreclosure. They were killing it. It's the people who bought in the last 2 years that are purchased leveraged and way over priced, that have the potential to hit foreclosure. It takes time to get to the point of foreclosure and not enough time has passed at this point And you might be right that we may not see it happen that way, but you are going to see some heavy losses.- Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes1ySome excellent points Ken. Thank you.
Quote from @Ken Boone:
Quote from @Mike H.:
2) The covid years created a bubble for the bigger cabins. During covid the numbers on the smaller one and two bedroom cabins were not that great. Paying 450k to 500k for 1bed cabins that rented between 45k to 55k. Or Paying 600k to 625k for 2 bed cabins that rented between 50k to 65k.I don't know where you got the smaller cabins were not great. I crushed it those years as well as everyone in my circle that had smaller cabins. My numbers were absolutely blowing through the roof those years.
We are no doubt in a cycle, but what we absolutely know for fact is that a lot of people bought in at 2023 and 2024 prices, expecting 2021 and 2022 rents. Many realtors pushed the idea of these numbers continuing, many pushed the 10% down loans cause you are gonna make so much money. And those people that leveraged heavily at the 2023 and 2024 prices are not going to make it through this next year. I don't know how many there are but I personally know several myself. They are going to have to eat heavy losses or sale at a loss to get out. Right now most of these people are not there yet, but a lot of them will be soon. I think most of them will hold on through summer because just about everything is going to book for summer, but when they hit the September lull it will be back to reality for these folks.
Right now the prices are all over the place. Most are priced too high and most are priced where they will not cash flow in a leveraged situation. We are back to the days where you buy a cabin now because you want a second home and you rent it out to help pay for it, not the days where you buy a cabin for the great cash flow.
The cycle will have to continue on a downward trend before we get to that point again. You are at an advantage building yourself at 65 to 70 cent on the dollar. That is about the only way to make money if you are investing in this market today at the current prices.
You are right about opportunity. It will be coming but we are not there yet.
Honestly I would not have expected you to see many foreclosures in the last 4 years. The people that bought up through 2022 had no reason to go to foreclosure. They were killing it. It's the people who bought in the last 2 years that are purchased leveraged and way over priced, that have the potential to hit foreclosure. It takes time to get to the point of foreclosure and not enough time has passed at this point And you might be right that we may not see it happen that way, but you are going to see some heavy losses. - 1yJohn UnderwoodPro MemberInvestor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
Quote from @Mike H.:
This is a great market and an even greater example of simple economics.
Here is my take on the market now and what led us to where we're at and where i think its going.
1) The numbers precovid were actually very strong. But they were very strong for a lot of STR markets back then too.
2) The covid years created a bubble for the bigger cabins. During covid the numbers on the smaller one and two bedroom cabins were not that great. Paying 450k to 500k for 1bed cabins that rented between 45k to 55k. Or Paying 600k to 625k for 2 bed cabins that rented between 50k to 65k.
The larger 3's (2,000 sq ft) or 4's (2,200 to 3,000) were going for 400/sq ft to 440/sq ft but were renting out for 100 to 120k on the 3's (that were selling for 800k to 850k) and 110 to 140k for the 4's (selling for 900k to 1.2 mil).
You could make some really nice money on the 3's and 4's with those numbers. Not so much on the 1's.
So everybody starting building big cabins.
3) Reality hit and supply and demand rules kicked in. And by the time covid ended, those large cabins all started coming online. And the money people had to buy dried up and the interest rates doubled from 3.5 to 7 so the cash flow fell apart too. Economics law of supply and demand on the rentals and the returns.
Rents dropped because you had a lot more inventory of the larger cabins and a lot less visitors wanting to rent the bigger cabins because they really didn't need that size rental.
That however drove up the rents on the one and two bedrooms quite a bit. Because there you now had the 3 and 4 cabin renters wanting the ones and twos. AND you really didn't have many people building ones and twos so the growth in inventory was small.
4) So right now what you have is the bigger cabins aren't moving at all and nothing is being built or sold for 3 or 4 bedroom cabins. That should help the existing owners of the bigger cabins though over time because there are very very few bigger new cabins being built. The few that are are available at cut rate prices.
Now the smaller cabins are selling extremely well. And their prices are continuing to go up. Why? Because their rents are continuing to go up. The one bedroom (1,000 to 1,200 sq ft) cabins are going for 550k to 600k right now. The rents are 50k to 65k. And the twos (1,400 to 1600 sq ft) are going for 650k to 725k with rents between 60k to 75k even.
This is where we're at right now. The building has been way off for the past 2 years now. Now I'm only talking about cabins there and not apartments or hotels. But anybody that says otherwise is either lying or misinformed. We are a builder out there and we talk with the building permit offices and the health dept that does septic permits. So there is zero doubt that the builds are way down - even from precovid levels.
Overall visitors are definitely down there as you would expect given that most areas in the country are. But this idea that this area is busted is silly. I see this market exactly like I saw the years after the crash of 08. Overbuilding to the extreme during covid just like the 05 to 07 years in the national market did. And now slowly, the nominal level of building going on is going to suck up the oversupply and then the area is going to deliver a great return like it always has.
Its become one of those areas like nashville and/or disney. Once you get enough attractions, the people will come. The more people that come, the more attractions continue to be added because they can make money. And its a snowball that feeds itself. Whats unique about the area is that its driven by STRs unlike a majority of markets - so you never have to worry about some crazy regulations to restrict the use of the homes for STRs.
I would tell anyone looking to invest right now, that you could really walk away with some really nice equity if you were to go buy 2 or 3 of the bigger cabins at these prices - but not new construction. Buy the pre-existing where the discounts are significant. In 2 to 4 years, those cabins that you can buy for 300/sq ft are going to go back up to that 425 to 450/sq ft price point.
And if you're looking for something that will definitely cash flow and you can get in now - I'd look at the one and two bedrooms. I think even though people are seeing the prices and rents of those doing well, they are still not interested in building anywhere near what the demand is calling for. My guess for that would be they just aren't the big homeruns that those bigger cabins were a few years ago and most of the people building out there are NOT first timers, they're the experienced owners who have seen huge wins and now they're gun shy on doing anything.
Again. I went through the 08 to 2018 or so period where 08 to 2014, everyone told me I was crazy for buying sfh's as rentals. People had such a bad taste for real estate during that period it was silly. Toxic is the only way to describe it. But follow the numbers. The numbers tell me that the smaller ones are going to cash flow now and in the future. And the bigger ones are going to be a great way for equity capture going forward.
Its all about supply and demand just like it was right after the crash when building came to an absolute halt and never returned - even to precrash levels. This idea that people see a cabin or two being built around them doesn't reflect the true numbers. The building permits tells you the real numbers and the permits are down significantly even from precovid levels.
All that being said. I don't believe its truly investing if I'm paying retail for anything. So I should add the caveat that my absolute confidence in the market is also based on the fact that I'm building cabins myself and doing it at 65 to 70 cents on the dollar. So the cash flow works better there. And the equity capture is solid too. Its the BRRR method but with new construction.
But where theres doom and gloom, there's opportunity. So if you really believe that a bunch of cabins are going to get foreclosed on, then you should go ahead and start putting in offers.
But I can also tell you that I've been watching the master clerk's website for several years now looking for deals to maybe come out. And you simply don't see cabins going to foreclosure maybe ever! It just doesn't happen...... I would guess I've seen 2 or 3 in total over the last 4 years.......I really like 2 of your points:
Where there are problems for some, there are opportunities for others.
Investing - Is not paying full retail price.
- 1yJohn UnderwoodPro MemberInvestor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
Something else to think about. Think back to what the 2008 prices were when people were getting out of properties they couldn't afford. Know think about what those same houses are worth today.
Point being that if those people could have weathered the storm a few years they would have been much better off today.
Always buy a great property with great views and great location and have cash reserves. You will likely get through any downturn and be better off on the backend.
For those not so smart it creates opportunities for the rest of us. The best opportunities are not typically found on the MLS or Zillow, you have to find them or make it so that you can be found. You might find someone that would owner finance or be able to buy a property "subject to" so that an owner doesn't get foreclosed on or to stop their bleeding.
Quote from @John Underwood:
Always buy a great property with great views and great location and have cash reserves. You will likely get through any downturn and be better off on the backend.
Bingo. Buy right and have cash reserves. I know people that jumped in and used every dime they had on the purchase.
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