All Forum Posts by: Nick C.

Two reasons.  First, got tired of the damage that renters did and secondly to take advantage of the appreciation over the last nine years.  

@Lane C. I'm in the process of selling my cabin in Sevierville.  We used @Jay Fradd when we bought and also to sell.  He's knowledgeable of the area and also has cabins he rents in the area.  A great resource that understands both sides.

security system and ongoing monitoring.

You guys have a lot more confidence than I have.  I'm one of the ones that is selling and you are right, we got crazy offers with escalator clauses, waiving appraisal and inspection.  

We bought ours about 9 years ago because we loved the area and figured it would be a good way to get some "free" vacations.  We had it with a PM because we live about 4 hours away and I have a regular job too.  Even using a PM, I felt like I worked on the cabin half the time we were there so I wouldn't have to pay someone to do it.  It became less and less like a vacation.  

We just booked time at someone else's cabin in January.  Looking forward to just relaxing.

Good luck.  There certainly are a lot of people that vacation down there.

@William Beck the market made the decision a lot easier.

Investment Info:

Single-family residence buy & hold investment in Sevierville.

Purchase price: $203,000
Cash invested: $40,000

Vacation Rental Property - Cabin. Purchased in Dec 2012 and now in the process of selling.

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

We had visited the Smoky Mountains and loved the park and thought the area would make a great place for a short term rental and allowed us to vacation there a couple times a year.

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

One of the local realtors had a ton of information about the area and I watched his site for about a year before contacting him. The property was a foreclosure so the negotiation was with a bank. During a survey, we found out that part of our driveway was on the adjacent lot which a different bank held. The bank we were negotiating with asked for an easement and the other bank said no so we wound up buying the additional lot and splitting the cost.

How did you finance this deal?

20% down and as a short term rental.

How did you add value to the deal?

buying the adjacent lot has provided more seclusion and the cabin sits on about 2 acres now.

What was the outcome?

We've owned the cabin for almost 9 years and have utilized a management company to run the every day business. It's allowed us to vacation there 3 times per year with others paying down the mortgage. We are now in the process of selling as values have appreciated significantly.

Lessons learned? Challenges?

Short term renters don't treat your property very well. Very frustrating at times to see the damage they do. Holes in drywall, ripped furniture, stolen items.

We did the same just outside the Smoky Mountains in 2012.  Went down three times a year and let others pay for it.  Now in the process of selling it and using the proceeds in the future to buy one that we don't have to rent out.  

Good luck

another question for those on this thread. Is there any advantage to paying off my mortgage before engaging in a 1031 exchange into a DST?

@Kyle Winther  it just went up for sale today.

@Isaac S. thanks for starting this thread, it's full of great information and exactly what I was looking for. Even though we've owned an investment property for 9 years, this is all still new to me and I'm learning about things I had no idea existed, like DST's. It's very interesting and I wish I had started earlier.

When we bought our cabin, our thought process was to only rent it for as long as it took to payoff the mortgage and then use it for personal use only. I wasn't trying to get into real estate investment for any other purpose than supplementing and paying off the mortgage. Now that the property has appreciated so much, I'm looking to sell and invest in a DST. I'll use the cash on cash returns to pay the mortgage for a personal use property in the future. I'll get to the same point as my original goal but just using a different path.

And....I'll continue in real estate investment through DST's in the future.

I'll certainly continue to update our progress.