All Forum Posts by: Mack Lengel

Used to stay there when I would go to FrontSite but believe they are bankrupt now, hopefully, they will get taken over and the facilities will still be kept up and running. They brought a lot of traffic for their trainings.

Well thought out post @Allen Tackett

I am very bullish on the Upstate of SC. I currently live there. Greenville and surrounding areas are among the fastest growing in the country and have solid fundamentals. We have BMW and a number of large international companies investing heavily here. Lots of expansion and commercial/industrial development so there will be a significant growth in demand for workers and people relocating to the area. Spartanburg is great but I would personally look more toward areas like Greer, Woodruff, and Duncan. 

I don't have anything to gain from it but if you need some boots on the ground or recommendations I would be happy to help in any way there. Feel free to reach out.

Investment Info:

Other other investment.

Purchase price: $15,000
Sale price: $873,500

Took a raw lot in a subdivision with great views and packaged it into a turnkey pre-construction short-term rental cabin. This provides imitate equity upon completion and increased cash flow.

What made you interested in investing in this type of deal?

My real estate team has been doing this type of investing in the Smokies for a couple of years now. There is a lower cost of entry and high margins so it can be a great way to get started if managing a short-term rental isn't quite your thing.

How did you find this deal and how did you negotiate it?

This deal was brought to me by my partner and he handled the majority of the negotiations. We connected with the lot owner who was behind on some HOA fees and no longer wanted the lot so we were able to cover his fees and let him walk with a nice bit of cash.

How did you finance this deal?

This was a 50/50 partnership in which we equally split profits and costs. The totals I refer to are both sides combined. I funded my half via a private money loan from a relative in which I gave him a 30% ROI on his money in 8 months.

How did you add value to the deal?

I added value by taking a raw lot and getting it surveyed, septic approval, and the builder in place ready to build a turn-key STR.

What was the outcome?

The outcome was that I sold the lot wrapped up in a construction loan with the builder's contract to give the end buyer a turnkey cabin.

Lessons learned? Challenges?

I learned the permitting process and what it takes to get the septic approval expedited by the environmental health dept. Working closely with one of my builders I was also able to learn more about what needs to be done to streamline the process on their end to decrease the build timeline and provide a smoother experience for the buyer.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I worked with my go-to construction loan lender who was able to help the buyers finance the deal as well as a super great high-energy agent that represented the buyers. I would happily do business with both of them again!

Speaking for the Smoky market here...

The fundamentals of the Smokies are the strongest in the country, and I still fully believe that it is the best market if I didn't then I would be looking for a new job. It is definitely a fact that bigger cabins bring in more revenue than smaller ones but if you don't buy a good deal or you go off of inflated income estimates then you could be buying into more work for the same profit at the end of the day. 

I am personally a big fan of smaller cabins that provide a unique experience. They are an underserved niche in the market and have good margins, especially when building them but that's another conversation. Whatever you look at I encourage you not to do what everyone else is doing for example a basic log cabin with rustic furniture and a wooden bear statue, there are hundreds of those and it provides your potential guest no reason to pick you over anyone else's cabin.

Where the majority of my/my investor's builds are at in the Smokies is a flat $1500 per lot!

Hey, Kyler good question... I am not sure about the scoop of the project you're looking at but I can say from my experience we have always gone with local builders for our builds. 

I work with a group in the Smoky Mountains of TN and we have been doing 20+ builds a year now with only a couple of local builders. Our main one does have a presence in Western NC but I believe it's more in the Banner Elk area. That's the route I would go if I were in your shoes but be sure to vet them well and ask for referrals. Hope this helps

Hopefully, I can shed a little bit of light on this one...

I and my team do this in the Smoky Mountains of Tennessee and we have a ton of success with it! The only thing is that we don't sell the land we sell pre-construction cabins. So the concept is similar but we approach it differently. Building here often works out better in the long run in our market so that's why we focus on it so heavily. 

To answer your question, yes it works but you'll want to do your due diligence before getting into it. Talk with some Realtors and developers and get feedback. Any improvements or work you are putting into the land to make it more turnkey will increase the value but I can't speak to the returns in your market. Hope this helps!

Going to follow this one closely!! Love the idea

If you're in a JV with the builder you will want to have crystal clear expectations of what each of your roles is going to be... Hopefully, your JV will clearly outline the roles and responsibilities of you and the builder. You'll want good communication on both sides to stay in the loop. One thing to consider is who will have the final say in the design and material choice. Might want to consider a 49/51 balance in favor of either party depending on the role and what you have outlined, that's where disagreements can form and partnerships fall apart.

Can't think of any books specifically related to this topic but 'Never Split the Difference' by Chriss Voss is a good one when it comes to negotiations and human psychology.

Hope this helps!!

 I'll message you and see if I can get you with his assistant. I know his kids were sick the other week so he's had his hands full.