All Forum Posts by: Levi Bennett

Quote from @Andrew Steffens:

How is ROI? I'd rather buy a $600k cabin producing $100k in revenue than a $300k cabin producing $30k.

 In my experience underwriting, most 600k cabins in TN are producing more like 50k, and a 300k here will get you more like 60k.

The hardest by far price range to cash flow is anything from 400k-700k (it's like an upside down bell curve of cap rate (x axis) to price (y axis). Main reason is most people qualify for that kind of mortgage and want something with at least 3-4 bedrooms and they fall in that price range, so again.. saturation is very high. 

However, like ANY market, there are exceptions, and with as much inventory as their is in TN, I'm sure some deals are up on the table right now once negotiations start. 

Quote from @John Underwood:

There is way more to the Pigeon Forge area than just the National Park and Dollywood.

There is so much more that draws people into the area along with a multitude of events.

That is why the PF areas can demand a much higher price and get it.

I hear what you're saying, and you're right.. there is way more to it. But I am pointing out that the entry point remains high comparatively speaking, it's saturated and competitive, and listing inventory and days on market is skyrocketing and outpaces anything else in TN or NC.

Additionally, the parent company to Dollywood just bankrupted 2 of their locations (not Dollywood) this week, and have over $1B in debt that they're working through, and do not seem poised to improve or invest in the area in the short to medium term. 

Meanwhile, on the NC side, outside investment continues to pour in on infrastructure and new attractions. That's more the point. For a newbie investor, there's other options, that's my only point. 

I was talking with another broker yesterday about how Tennessee sometimes gives the Smoky Mountains a bad name for North Carolina. No shade to the great Dolly Parton (our golden retriever is literally named after her) or her iconic theme park — but let’s be clear: that’s just one small area of the Great Smoky Mountain National Park. The park is actually split between TN and NC, with slightly more acreage on the NC side. But what most people picture when they hear “Smokies” is the "Myrtle Beach of the Mountains" — Sevierville, Pigeon Forge, and Gatlinburg. High-saturation markets full of massive log cabins and tourist-trap vibes. Great for convenience. Not so great for investors long-term.

Kind of like Blue Ridge, GA is where Atlantans buy before they discover NC. Pigeon Forge is where folks from Nashville and LA think they have to invest to get in on the mountain rental game. COVID made everyone look like a genius for a while, but when tides shift, oversaturated markets often leave investors holding the bag (just look at how many vacation homes are for sale on the TN side). Now, why does the NC side of the Smokies look more attractive?

1) Median price in TN: mid-to-high $600s. In NC? Low $300s. Low acquisition cost is ROI's best friend.

2) Seasonality: Bryson City/Cherokee offers one of the strongest ranges in North Carolina— largest casino in the region, Great Smoky Mountain Railroad, Appalachian Trail, Nantahala Outdoor Center, Tail of the Dragon, rivers, lakes, fishing, hiking. Year-round draw.

3) We just put a client under contract sub-$200k for a property steps from the NC entrance to the park. ROI potential is massive — but because demand is low (thanks to lack of awareness), opportunities still exist.

Moral of the story: not all “Smokies” are created equal. It's a massive park, and the North Carolina side gives investors a very different playbook.

I always begin by asking people, what are your goals? Is there a personal enjoyment factor? Or is this a pure ROI play based on a hunch that there is consistent revenue and you're hedging against seasonality?

If I'm looking at this starting with the criteria that it needs to be near a National Park, I'm going to start with a few questions. 

1) What is the most visited National Park in the US? (rank them top to bottom)
2) What are some additional overlay's (or draws/amenities to the area that might add value to guests besides the park?) 
3) Is there an undervalued play (acquisition strategy) with stable economic factors near a National Park right now? 

Starting with the first question, there is only one obvious answer and that's the Smoky Mountain National Park in North Carolina/Tennessee- and it's not even remotely close. This park has more than double the annual visitors as the next closest park (12.1M visitors annually as opposed to Grand Canyon in #2 spot at 4.9M). 

Second question- Now look at economic/infrastructure hubs near the park and you land at two obvious ones. On the Tennessee side you have Pigeon Forge area (also Sevierville and Gatlinburg) with Dollywood as a theme park to anchor, tons of infrastructure, tourist draw with direct access from Knoxville, Nashville and the west side of the Appalachian Mountains. On the NC side, you have Bryson City with direct access from Asheville, Atlanta, Charlotte, Raleigh and the East side of the Appalachians. In Bryson City you have a popular tourist train (GSMR), one of the largest casino's in the Southeast, the Nantahala Outdoor Center, the second largest lake in NC, and some of the most notorious fly fishing rivers in the US. 

Finally, the third question - looking at median acquisition prices, TN side of the National Park is in the high $600ks, and the NC area is the low $300k's. A massive difference. The play leans towards NC as migration and tourism is showing stronger growth trends, higher migration trends on the East side of the mountains, acquisition is lower, and seasonality is strong due to overlaying factors. 

To apply this in real life, last week we helped a client put a 1 bedroom cabin about 400 yards from the edge of the Smoky Mountain National Park under contract under $200k, the expected return from a cap rate, cash on cash, or IRR are all deep double digits.

If long term appreciation is part of the goal, I'd want to understand long term migration patterns as well, and look at regional parks near places where there is a lot of people moving within 200 miles. 

Anyway, best of luck. It's a cool idea, I hope you make it happen!

Hey Stephanie, I operate a team based near Charlotte, and all I've done for 10 years is Investment Brokerage in the residential space. Including multi-family. There are several good ones, but my advice to you is make sure whoever you are working with can speak the language and not just saying they're "investor friendly" but have no idea what it actually means, and is an investor themselves. 

Agreeing with @Carlos Ptriawan, it is a bit of a post-recession for STRs.. HOWEVER, there are certain areas that are dealing with different layers, like.. massive migration to the Southeast Region of the US, which means tourist areas near those areas (beaches and mountains) are still exploding and breaking records for STR market cap (money spent by guests on rentals). So, I think it definately takes more savvy these days, but there is still low hanging fruit in the Carolinas, Georgia and Florida everywhere I look.

Hey there, welcome to BP. You described my entire region of specialty. I'm in the process of creating a regional brokerage for newer investors to get real help with acquisition, and consultation on STR, MTR and LTR success in the residential space. I've been an investor and broker for the last 10 years in FL and NC, and specialize in the mountain regions, and beach regions because that's where most of the tourists, and investors who want getaways, invest (certainly there are many other interesting markets to invest however, booming wine country for example..)

To add to it, I love the environmentally responsible home building, that's something I've had an interest in for a while, and I've worked with several contractors and architects in the last few years to come up with a useful plan for alternative and environmentally responsible building materials. 

I will say, generally speaking, building new can be an annoying and cumbersome process if you're new to it. And obviously, it rarely cash flows unless you can find property with an existing source of income that can be added to (a savvy strategy actually). 

I will say, when looking, use as much useful data as you can, but more importantly, work with people who know how to interpret the data. There's a lot of contextless data flying around and there is a big difference between people who want to sell you something in the short run, and people who want to see you succeed in the long run and they'll use the data to suit their needs. 

I would say first step if figuring what kind of goals you're looking for, and then going backwards from there. Some people want cash-flow from day 1, some people want to invest long term, some medium term... all different strategies that would require a custom tailored approach. 

Best of luck! I'm happy to help. 

I sent you a message about this, please reach out at your convenience

Hey Sabrina, and welcome. Be sure to read my post about this very topic that I think you may find helpful. Most investors are looking into the medium-term rental space as this is the biggest emerging market in the area. MF can be good for cashflow, but rates of return are notoriously low here due to extremely low inventory and extreme demand from foreign investors. Not to say it's impossible, but the competition is fierce. If you're looking for ROI, I would explore some of the other opportunities in the area. I'm happy to chat more about it if you're interested. Best of luck!

I'm in Mooresville (North Charlotte) personally, but have specialized in investment homes for 9 years in Florida and all over Western NC. You have a good observation, I actually wrote about this here on a biggerpockets a while back, you can read it here.

MF is doable here, but inventory here is very low because of zoning trends. There's a lot of ways to capitalize on cashflow and BRRRRing in our market, it's not limited to MF, but STR, and especially MTR (medium term rentals) around Lake Norman. There's a lot of corporate housing needs for furnished monthly contracts, as well as a significant amount of development where people move here from out of state and need a place to stay while their house is being constructed. There's a lot to talk about here, and multiple entry and exit strategies, but if you want to discuss more, feel free to reach out.
I hope this helps! Best of luck to you!