All Forum Posts by: Collin Hays

We do not sell real estate, but occasionally we hear from a homeowner client who is interested in selling.  I am happy to pass these along for anyone interested.  As of right now, we don't know of anyone that is interested in selling, but that can change on a moment's notice.

 Hmm.  Did you read my response?  ;)

I have a PM near Gatlinburg TN, and we have homeowner clients who have never even been to TN.  I don't advise this, however, unless you have found a real estate pro that you really, really trust.  We have placed several cabins with owners, but I fully trust my manager to be able to ferret out most (though certainly not all) problems.  He knows plumbing and electrical, plus hot tubs, so that covers about 85% of the bases.  A facetime video will not tell you if it needs a new septic system or HVAC, or if there is a snake den on property that needs dealing with.  

Here is what I am seeing in the Gatlinburg market:  The buyers generally right now are "all cash", and they are waiving inspections and appraisals so that they can get a deal done quickly.  This is a recipe for disaster, but that is the market we are in currently.  Whether these deals turn out to be prudent investments long-term remains to be seen, but nothing goes up forever.  

Sounds easy enough.  We recently took on a client for this very reason - a hot tub issue.  Apparently the hot tub was giving problems and it took forever to get someone out to look at it.  And finally, when they did, the repairman told the owner "this will cost more money to repair than to replace."  

Have you tried to buy a new hot tub lately?  6 months wait.  

So after weeks of angry guests and refunds, he joined our program.  Before he even signed his agreement, our manager went to his property, torn down and rebuilt the motor, repaired the circuit board and 2 leaks, and it was working that day.

Lots of sunshine pumping on self-management, whilst tossing shade on PMs, that isn't quite accurate.

Andy, I own a property management co. in eastern TN.  I self managed for a number of years, but I just didn't have time - or capability - to mess with a lot of things that came up.  This forum is mostly self-managed property owners, BUT, most of them are also living near their properties.  It's easy to say "oh yeah you can self manage", but if you are hundreds of miles away, the reality of that is a bit different.

In terms of our homeowner clients, all except one live outside of the state of TN.  A number of them have self-managed previously.  We have some homeowners who have literally never even been to TN, much less seen their property.

We have a lady in TX who bought two cabins a couple of years ago who has never even seen them first hand.  Both of them 1 bedroom + loft, both of them chugging out $75-80K a year combined.  She keeps 75% of that, and she paid around $510K for both of them, so she's sitting pretty darn good!  She gets her monthly checks and that's it.

As to your question, yes of course a good property manager is going to take good care of your properties.  But...as trust develops with them, you are going to have to allow them to do their job.  The worst client is the one who pays you to manage their property, and then micromanages the heck out of you, so that you can't really do your best job for them.  

We have one client who won't let us spend past $20 to fix anything.  We've lost a lot of rent with this property because of that.  Penny wise, pound foolish.  And he always wants to tell us how to price the rents.  Yet this is our expertise - we do it all of the time.  And then he had a chair broken, which was a $100 fix, and then he wanted to start charging everyone a $500 damage deposit.  We advised him against this, but it's ultimately his cabin, so now his annual income has dropped $10K because that deposit chases away so many potential guests.

We have had to "fire" a few clients, because they won't get out of the way so that we can do our jobs. 

I am always an advocate of self management, if you want a part time job.  If you don't want a part time job, you'll be miserable.  

But...if you hire a PM, LET THEM DO THEIR JOB.  Try to shift your mindset, that since you are hiring a PM, it's more like an annuity.  Let them take care of all of the day-to-day grind, and enjoy your monthly checks.  With the new spare time that you picked up, you can spend finding yet another good real estate deal!

Good luck.

 Well, they aren't.  :(

I don't want to be a smart a**, but a fair price is what you are willing to sell it for, and not a penny less, regardless of the CAP rate.

Number one, cabins on a river are extremely rare.  They aren't making any more rivers.  So you are in an entirely different class with that situation.  I have several cabins on rivers or mountain creeks with fishing, and it would take a mighty chunk of change for me to part with any of them.  I have a 2400 square foot cabin on 250 feet of frontage on a blue ribbon trout stream, that yields around $50K gross per year.  A fellow offered me $500K for it a couple of years ago, thinking surely I would accept it.  I told him "there's no way."  I figure the fact that it's on water is worth a $500K premium on its own.

I have a cabin right on the Roaring Fork River in downtown Gatlinburg that does about $70K a year.  I've had offers as high as $750K for it, but I wouldn't sell it for anything less than $1 million.  Why?  Because there have been exactly zero cabins sold on that river in the last 4 years.  Properties there are unique, exclusive, and cannot be duplicated.  

I don't know if this answers your question, but you'll probably sell those river properties too cheap...

I owned an STR in downtown Gatlinburg that was haunted. It was a log cabin, right on the Roaring Rork Creek, that was circa 1800 made out of Chestnut logs from the now-extinct Chestnut tree. There was the original dwelling which was basically just a 12X16 room with a large walk-in fireplace. In the 1800s and even 1900s, families all lived together in one room next to a fire. Then later, a bedroom and bath was added, and then later, a kitchen was added and a small dining room. There also is an underground meat storage next to the creek that is still there, next to the new cabin.

If you wanted to stay in a super modern cabin with pool tables and heart shaped tubs, this wasn't it.  But if you wanted to walk back in time 200 years, this was your place.  

There was a ghost there.  Many, many odd things were reported.  It seemed to be an adolescent female who was always wearing white.  No one was particularly frightened, although we had a few guests over the years check out early just because it was a bit unnerving. 

Sadly, the cabin was destroyed in the Gatlinburg fire several years ago.  Several weeks later, I phoned the last guests to stay there, and they were shocked that it had been destroyed.  The guest said "We loved the cabin, and we were not to depart until the next day, but something in that house was telling us to  leave immediately, so we packed up and left about 6:30pm."  The cabin would burn to the ground sometime between 2 and 3am that night.  Nothing was left except the fireplace and an antique porch lantern that welcomed guests.

We allow wood fires.  Our cabins with real wood-burning fireplaces are very popular.  We typically provide a small bundle of firewood.

I only have 2 of my cabins financed with a conventional mortgage.  I have two more free and clear (and I'd like to get a mortgage on one of those), and two more (both properties together) that are worth around $500-600K that I owe $102K on, but it isn't a mortgage per se - they are collateral on a business loan - not a mortgage per se, but kind of.