All Forum Posts by: Alan Ford

Originally posted by @Ryan Moyer:

The comparisons to total flu deaths at the end of flu season against a virus that is just starting to spread are laughably silly, but outside of that this thing isn't the black plague.  It has a high death rate for something that spreads so easily, but not a super high death rate overall.

In a worse case scenario we're looking at about half the US infected and 2% of those dying which would be around 3.5 million deaths.  Again that's an absolute doomsday worst case scenario that is unlikely.  The reality if this thing does hit is that it will be really bad, but in the context of a 30 year real estate investment not a long term issue.  In 6 months it will likely be over either way and things will either still be normal or things will be starting to get back to normal.

Unless you cant make the payments and go into foreclosure. Most of us have reserves, but not crazy reserves haha.

@Carolyn Fuller love a source on that that is actually science based?

@Chris Watson good way of looking at it. Thanks .

@Jon Crosby this was great. Sent straight to my family haha.

@Michael Baum I suppose in theory the only way we could really lose is if for whatever reason the government recommends non-essential travel be limited. That would be a pretty massive step to take.

I like the idea of more travel to the area!

The other thing to think about is that my new house won't even be ready until October if I am lucky. Only concern would be if the other two STR properties totally screw the pooch due to the virus and I end up in a bad position relative to those mortgages and the carrying cost of the construction loan. Having said that - I would need to almost have no guests at all for it to be that bad.

Originally posted by @Paul Sandhu:

Ignore those people.  It's not their money that you are investing.  You have a bigger interest in it than they do.  

8 years ago Amazon relocated their distribution facility that was in my town.  They moved to a big city.  1600 jobs gone in a town on 9500.  Bank foreclosures are common, because people just left town and let the bank have the house.  So I just buy bank foreclosures.

If this virus scare turns out to be a false alarm, you might be able to buy properties at a below market price (like me).

That's actually an interesting point..wonder if I am better off holding on to my $160 grand and using it to buy distressed properties if this thing does go down!

So, let me preface this by saying that I think this whole thing is likely a bit overblown and I am by no means a doomsayer the world is ending etc. I currently own two STRs in Pigeon Forge area and @Avery_Carl helped me with finding a lot, developer etc and contacts for a purchase and construction loan to build a new property. Big four bedroom luxury cabin with view, outdoor living area, all the bells and whistles - paying about $750k total, includes everything to be turnkey. Appraisal likely in the 800K+ range. Single close construction loan, 20% down 3.5% Interest only during build with automatic conversion to 3.5% fixed 30 year loan when construction is done.

I won't go into all the details but my family thinks I am "insane", "stupid", Short-sighted" to invest in another property with what is going on in the world with this virus.

I should also add that I do plan to use this as a vacation home for myself as well - and if my STR empire dreams pan out - my eventual personal residence. The mortgage on this place is lower than my mortgage here in CA and the property taxes...forget about it!

What do you guys think? I am kind of thinking that if this thing gets so bad that people stop vacationing in East TN - the world has bigger problems than this...

I more than likely will ignore the family, but wanted to get your guys thoughts and help me with a gut check!

@Todd Goedeke actually this is true. My 395,000 property taxes is $1084 a year and my 280,000 property is $684 a year. This is in Sevierville.

@Ryan Moyer 73,295 for my 4bd in 2019. I do not include cleaning fees in that.

@Collin H. I know the term. They don’t do it. There is a cleaning fee. A $45 optional damage waiver (if they don’t take it - they pay a $300 security deposit) those are the only fees.

If they make money off the cleaning fee - more power to them. Doesn’t bother me - the place is always cleaned very well.