North Carolina Vacation Rentals, BRRRR?

[Tom Ormand]

Hello all, I am looking into purchasing short term rentals in the Boone, NC area. I have a couple questions as far as short term vacation rentals are concerned. Does anyone use the BRRRR strategy when buying this type of property? If so, do you get a hard money loan and then refinance to a conventional loan after rehab and 6-9 months of rental? Can anyone recommend a private money lender for the area? There are a variety or ways to market and rent the properties. Several local real estate companies manage these types of properties and most of their properties have very low vacancy rates. They charge about 30% for their service. Or I could use vrbo or airbnb, which is cheaper, but I would have to self manage. I live in the Atlanta area so I would need a good team either way. Any recommendations? If there is anyone who currently owns short term rentals in the Boone area I would love to chat. Thanks in advance, Tom

[Jim Brewer]

I think your biggest hurdle would be the refinancing part. I would try to find a bank that would be willing to refi a vacation home before anything. If you can find one that will do it, then the rest of it should work the same as any other. I think that hard money would be too expensive if your'e holding it for 6-9 months. I would try to find other ways to finance the deal if you can. 

Self managing can save you some $ but you better have a good team in place in the area where your house is. You'll need a handyman that can respond quickly to any issues, and a list of other people that you can call upon when needed. I think self managing can work great, especially if you only have one property, just know what you're getting in to. 

I am familiar with the Boone area and have family that own cabins up there. I have also looked for vacation rentals in the mountains(closer to Asheville). I will say that there is a LOT of competition on rentals up there. The two things that would be most important to me when looking for a home would be 

1. Location (of course), this is always important but is very important with these mountain houses. You want a house that has a view, that you can showcase on your website. 

2. Amenities - People will leave the house to go hiking and see nearby attractions, but I think that the house needs to have plenty to do. It's not like a beach house, or lake house where the renters will likely be spending a lot of time outside of the house. People will be spending time enjoying the peace and quiet of your home. I would make sure to provide and highlight amenities such as a hot tub, fire pit, fireplace, rocking chair porch, pool table?. etc. 

I know this didn't directly answer any of your questions, but I hope it helped a little bit.