Two Condos purchased in Gatlinburg, TN
Investment Info:
Condo buy & hold investment in Gatlinburg.
My wife and I bought our first investment property in Gatlinburg, TN in March 2020. This year in January, we purchased our second - which happened to be directly next door to our initial investment. We have been netting an average of $2500/ month from each unit on Airbnb/ VRBO
What made you interested in investing in this type of deal?
After hearing several podcasts related to short term rentals, we investigated the best areas in the country to purchase them and landed on a few with Gatlinburg being the one that suited our price range.
How did you find this deal and how did you negotiate it?
I found both of these deals on Trulia and put in backup offers (very competitive market) with the sellers personally. In each case, the financing fell through for the initial buyer and we were chosen to pick up the deal.
How did you finance this deal?
Traditional financing using 10 and 25% down respectively.
How did you add value to the deal?
I included an escalation clause in our first deal and wound up having to pay an extra $15K out of pocket. In doing so, we satisfied the seller's ideal sale price.
What was the outcome?
Both properties have appreciated dramatically and our cash flow from the first deal alone has nearly paid off our original down payment. When we decided to do a Cashout Refi, we'll be able to pull out all of our initial investments and a little more to roll over into more deals.
Lessons learned? Challenges?
In both scenarios we had to really work hard to save additional money to make the deals work. The first was very scary having to come out of pocket an extra $15K, but it worked out really well in the end. For the second deal, we had to come up with an additional $7K for reserves in a month, which meant I was working at my hospital 6-7 days a week 12 hour shifts so we could satisfy the requirements of the bank.