All Forum Posts by: Mitch Davidson

@Michael C berry jr. If it were me, I wouldn't put the money towards STR, especially here in the Asheville market, unless you're really going to create an STR that's standout for the market, meaning very desirable but also uncommon. STR is super volatile across the country right now, and is even more painful here due to the lingering impacts of Helene. I'm happy to help you think on other strategies, and likewise introduce you to any local investor friends that can speak more to a specific strategy, location, etc. And if you're local, we have a twice-monthly BP meetup that you might really enjoy. I'll message you the details.

@Michael Kenny As a local here in WNC, I'd be very careful. STR income figures have generally declined since the COVID stimulus wore off. And economic uncertainty, not to mention the devastation of Helene, have made things worse.

If you're mainly driven by cashflow, for your first place I'd focus on a small home, 1 bedroom, 2 bedrooms at most, because your furnishing costs will be lower and because you'll be able to appeal to the lion share of potential guests. People often fail to properly account for furnishings. If you spend $24,000 on furnishings, for example, and cashflow only $12,000 for the year, you're really not doing well IMO, because most of your furnishings will need replacing after 2-3 years. Meaning, by the time you've earned back your spend you'll have replaced most of the stuff, or will need to very soon. And regarding location, I'd avoid saturated markets and instead focus on underserved ones. In such markets you can go the route of being a hotel alternative, which is cheaper regarding furnishings, or being a destination and experience.

If your focus is most on appreciation, however, you may find more opportunities for such in markets that are more saturated regarding STR. Meaning, some of the underserved markets, where both STR's and good hotels are scarce, are very rural and therefore not so great for appreciation.

Hope this helps some. Happy to talk about more specifics if you want to have a call. And happy to introduce to you great real estate agent options if you need.

Agreed. I've driven back and forth from Asheville to Knoxville a few times lately. And have got to my destination just as quickly as I used to, before Helene. It's never been a fun, easy drive through that section anyways. Two lanes on each side, and no margin. Dark and twisty at night. If there's a semi wreck, which happens often, you might sit for a few hours. To avoid much of it you can go through Hot Springs. It adds maybe 15 minutes. No less twisty though. 

Quote from @Collin Hays:

Quote from @Jay Hinrichs:

Heck yeah!  All of my places except one, you can catch dinner from your back porch.

Funny how I used to gravitate towards properties like this. I could play in a river like a child all day long. Then Helene happened. And I live in Asheville, a stone's throw from some of the worst damage. Just half a mile away a friend lost all 9 of his a-frame cabins. And they were all up on stilts. No more rivers for me. And no river-front investments either.

@Mike Lattier While I think the misperception that we haven't fully recovered from Helene is still negatively impacting our tourism and STR bookings, and while I think some of the slowdown is partially a reset to pre-pandemic demand, I believe the largest issue at the moment is national and economic, meaning that economic uncertainty, coupled with rising costs and unrelenting interest rates, is causing a severe decline in discretionary spending, especially among those we might deem middle-class according to income, which would apply to most of my past guests in Bryson City.

And I believe the pain might be heightened in BC, compared to other markets, because of the following:

(a) The town is rather a best kept secret compared to others, meaning not well advertised or known. And some of my favorite spots and activities took me quite a few years to find, meaning also not well advertised or known.

(b) A couple other areas 1.5-2.5 hours away, namely east TN and greater Asheville, have much more to offer regarding activities, food options, trail systems, airports, rental cars, you name it. BC and surrounding are quiet options by comparison, which appeals more to me but not my kids, and perhaps not to the majority of people that might vacation in our general region.

(c) The market is super saturated for the visitor count, and especially with cabin style homes.

(d) Many of the properties are second homes where STR income isn't very needed or focused on, as illustrated in lousy listings, low and static nightly rates, etc. And I always felt that compared to many other markets there was a greater frequency of this issue in BC.

I don't say all this to dump on your market. I really love the place, and have vacationed there for many years. Same for you @Kyle H. I mean to say that these factors and perhaps others might cause you to feel STR pain a little more severely than Gatlinburg or Asheville for example, and especially if you have a 2-3 bedroom cabin. For these reasons and others I sold my STR there in 2024.

Hi Kaitlyn (@Daniel Williams). I'm local here in Asheville, and am happy to help you think on options, as well as helping you connect to whoever else might help you tease out plans and such. I'll message you my contact info. Also, we have a BP meetup tomorrow morning at 9AM at Bridge & Tunnel Coffee, and it's rather roundtable and discussion in approach. Thus I'm sure you'd get some great feedback, creative thought, and energy by joining us. No need to RSVP. 

@Tom Palmieri I can intro you to a couple local private money lenders that won't have a problem with the location being rural. I'll message you their info. 

Hi @Jason Berryhill. I live near your target area, and can share insights from what I've seen friends do. And I'm Happy to discuss further if you want to have a call. Below are comments in order of your questions.

• - How can I properly evaluate raw land before buying it, especially with short-term rental goals in mind? A good buyer agent, and one who has experience with building and land sales. I don't think they necessarily have to be STR savvy for this matter. I can help you find one if you like.
• - What hidden issues should I be on the lookout for (septic, zoning, utilities, access, etc.)? You've listed most of the major categories I can think of. And be careful of compromising on some of these matters, as such could put you in a bad position to sell someday, not to mention pull cash out by refi. For example, too steep, twisty, bumpy, and/or long of a climb in nearby roads or the drive will drag down your reviews, income, and resale value. Low water pressure from a well will do the same. With raw land in rural spots of Black Mountain or surrounding I don't think you'll have significant zoning challenges, but keep in mind that Swannanoa is under Buncombe County's jurisdiction, and the county has been musing on STR restrictions for a while now. Thus, you could find yourself in a bad spot if you don't get the home built soon enough. Also, because so many people know that Swannanoa was our "ground zero" for Helene damage I have to wonder if that city above all others would be a touch location for STR income, at least for a while.
• - Who are the key people I need to bring onto my "team" early in the process? Surely a talented local Realtor, namely a local expert who will tell you what you don't want to hear. Next, a lender, so that you position yourself well for the future regarding pulling equity, etc. And likewise, if you want to finance the build itself. I can help there of course. And then some others I'm sure you've thought of, such as a surveyor, developer, engineer, architect, septic/well installation contractor, etc. Some of these people, can intro you to some others.
• - For those familiar with the area, what are realistic ballpark costs for land prep, utility installation, permits, and building a simple but nice A-frame? For .5-2 acres with a buildable spot, unless you're super far away (for example, the part of Black Mountain that's down by Chimney Rock and not super fun for guests regarding driving), I can't imagine the lot will cost less than $100K. And all in, I'd suspect you'll be in the $300K-$400K range but I'm speculating.
• - Would you suggest buying land separately or looking for something that’s already part of a land/home package for a first-timer? There are no first-timer perks for investment properties, nor for construction for that matter. And you won't find a land/home package for what you're looking to do, meaning a STR retreat, a-frame, in that location. Often, whether the construction is for an investment or primary residence, the buyer purchases the land with cash, private money (Derek Robinson is great source locally), etc., and then gets financing for the build. Then, investors often use private or hard money for the build, because it's quick and easy, and because construction type mortgage options are often limited to primary residences. I can help you find financing for the land and build though if you like.
• - What mistakes have you made (or seen others make) that I should try to avoid? I know you fancy an a-frame, but are you sure it'll stand out enough here? One huge mistake STR investors make is setting up a new property that'll just be noise, for example a cabin in a sea of cabins. I would focus on style that'll standout. And I would stay small. Furnishings are a major issue that STR investors overlook. Meaning, how soon will you recoup the investment? It needs to be soon because most of the furnishings won't last for but a year or two. For that reason, I think small is the best play for your first property.
• - Any recommendations for good local builders, prefab companies, or lenders that cater to this type of project? If you want to finance the build I can intro you to a couple options. Also, Alfie Loans (local hard money lender) might be a good fit. And again, Derek or another private money lender is a good option as well. Once you get the build completed, I can help you refi to pay off the expensive financing, whether with DSCR or conventional. For prefab, perhaps check out 7dayaframes. A friend was looking at their DIY packages a while back. 
• - How much extra budget cushion would you recommend building in? Can't speak to that.

Hi @Scott Deetlefs. We have some great options here in Asheville if you want to reconnect once you're local.

Hi @Ben Miller. I live near Lake Lure, and can help you with a DSCR loan (and resources and referrals as well).

We (Movement Mortgage) have an amazing DSCR program. No prepayment penalties for one thing. No restrictions or issues regarding rural properties, or cabins, short-term rental, first time investors, etc. And we underwrite them internally, so much more upfront assurance that the deal will work. Also, because we’re the most common lender in the area, our preapproval letters can be helpful in getting your offer accepted, because the seller’s agent will know and trust us.

I’ll send you my contact information in a direct message.

And if you’re in town sometime soon, I’d love to meet you to one of the two monthly BP meet ups that I host here in Asheville.