All Forum Posts by: Chris Watson

In the Smokys building has slowed to a crawl. I am one of the dozen residential building permits being pulled this month. DR Horton is trying to build over 300 homes but locals are against it but STR would not be allowed. In East TN it takes most builders a year or more to build so the supply will not show up overnight. Actually the reverse is currently happening with STRs reverting to owner occupied or non-rented second homes.

At 4.5% most DSCR 20% down will be around 5%. This is a around 2% less than current rates. So theoretically this is close to $2k savings a year per $100k financed. On a $1.25M property 20% down it should increase cashflow close to $20k a year. I believe across all markets you will see an increase in purchases initially and if there rates stick for more than 12 months you will see an increase in sale prices. Lastly, this rate reduction would increase guests disposable income as credit card interest rates would reduce also.

I believe it is due to the funnel to the BP forums, the BP podcast, has dropped in quality leading less people to the forums.  I use to binge and catch-up on16 hrs of BP podcasts on my drive to and from the Smokys every couple months. Unfortunately now it literally puts me to sleep (bad for driving) and lacks the enthusiasm seen in the past.  I have moved on to more mentally engaging podcasts for my drive.  I use to recommend people wanting to get into real estate investing to go binge on the BP podcast, but I can't recommend it anymore.  I have talked to other longtime listeners who have the same opinion.  So the top of the funnel that feeds the forums is broken, so less newbies needing advice.

Second, STR owners can get quicker more market specific advice in market specific owners Facebook groups.

Third, I noticed a post about a month ago where all of the sudden had about a dozen people replying who normally do not post/reply.  It shows me alot of lurkers (readers/not posters) are on the forums.

I am not sure they are pulling out.  I believe like most insurers they are capping the number of policies in areas to mitigate risk.  In the Florida market I am use to this as my preferred policy underwriter caps the number policies per zip code.  I have my insurance broker checking monthly till they open up writing new policies and swap newer properties' policies to them.  With that said, due to extremely high premiums I never used Proper. The one time I had them quote properties they were close to triple my current premiums.

You are right.  I have a mix of both in my beach portfolio. The Smokys @Collin Hays is right on spot from my experience so I own no Smokys condos and only cabins/homes in that market.

We are strict on cancellation policy and bookings are great in both markets.

I will disagree with @Collin Hays as I have beachfront condos that cashflow better than neighboring beachfront townhomes and homes. At their acquisition cost, the condos perform better than some of my Smokys properties. It is all about purchase price, quality, amenities and how you manage a property.  

As in my previous posts on BP, due your due diligence and read HOA minutes and docs. As each condo association is different and have their own personality.

I own several in both markets.  Just closed on two more on the Emerald Coast in the past two weeks and am in the Smokys right now looking at properties. I am finding it hard in the Smokys to find a property to have our requirements (views, great design and quality construction) for a reasonable price. I bought a vacant lot in the Smokys last month and I am currently waiting on the septic permit to start construction.

On the Emerald Coast I am able to find properties to cashflow and sellers willing to negotiate.  I only do beachfront on the Emerald Coast as it leads to more bookings throughout the year. I am not a PCB fan, but the beaches from Pensacola to 30A have me spoiled. PCB has some great deals right now but due to the supply I am wondering if it is a over supply.  There might be some great deals to be had as things are sitting on market for a long time right now.

I have 5 in Florida and self manage.  Only one does the cleaner ask that I supply some things.  My work around is stock the owner's closet when I am at the property.  If more is needed, then I schedule a Walmart delivery an hour after checkout on the turn day when I know the cleaner will be there.  You could also instacart on the turn day.  I have self managed for 9 yrs (even while deployed to Afghanistan for 9 months), own 11 STRs and over 8.5hrs away from 6 properties so when people automatically say you need a manager expect that they are a manager themselves.  Self managing is about setting up people and processes.  I also try to visit all properties atleast quarterly.  Even those who have managers, I would suggest to visit quarterly as no one cares about your investment more than you. 

While I love the NC side I have had concerns for years and have not bought. My concerns:

1. Availability of reliable cleaning and maintenance teams.

2. The number of tourists in the multiple locations on the NC side. It is too spreadout leaving a lower demand in each area.

3. Historically low appreciation on NC side. While almost everyone says don't count appreciation, I do. It is why I accept a lower CoC ROI at my beach locations because appreciation has always happened over the long term with beachfront in Florida. Right now I would not count on appreciation on TN side for 5 yrs but there are some 6x to 8x properties if you offer right.

4. The major issue for me is NC governments is not as friendly to STR investors as TN. Governments are like HOAs and can make life complicated. With someone now self managing 11 rentals, I do not have time for drama from government or HOAs. Before I will look at a property in an HOA I require realtors to provide me with 3 years of HOA meeting minutes and Board of Director minutes. Waynesville, NC and Ashville, NC are prime examples of local governments meddling too much. Plus NC laws on STRs are slightly more controlling versus TN laws at the state level.