All Forum Posts by: Ryan Cushman

Interesting.. excited to see how it turns out!  

Hi Preet - Great questions and I'm sure there are some folks that may be able to provide some more concrete yes or no answers but my sense is that you may not be able to realize a lot of tax benefits if the value of the thing you are describing isn't very high. A tiny home installed on rented land won't have a huge value and therefore won't have that big of a depreciation benefit. Secondly, you'll definitely want to confirm with a tax strategist with experience in the STR space to confirm if the setup you describe will pass as an STR with the IRS. Thirdly, financing and potentially selling later on could be challenging again with the part of the plan being on a campground. I haven't done what you're describing so I can't say any of this for sure but my $0.02 :)

-Ryan Cushman

North GA Realtor and STR investor

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $171,000
Cash invested: $29,000

Small 600 square foot cabin tucked away just outside of the quaint city of Ellijay GA. Bought it as a safe bet thinking it would do roughly $35k annually in short term rents. It has surprised us delivering nearly $60k in gross revenue annually. After acquisition, we furnished it, added a couple decks for a hot tub and solo stove fire pit, as well as a ton of string lights and were off to the races!

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

The low purchase price was a big part of it. At the time, just about everything was going for much higher price per square foot and with multiple offers.

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

We identified it on the MLS with it's low asking price and nice aesthetics. We got it under contract but then canceled the contract after some concerns with the foundation. It sat on the market and dropped in price a couple more times at which point we decided to make a new offer. Originally listed above $200k, we landed at $171k.

How did you finance this deal?

10% down 2nd home loan and savings from the proceeds of already owned STR's.

How did you add value to the deal?

We added value by furnishing the property, added 2 decks (one for a solo stove, and one for a large hot tub), improved the gravel driveway, mulched the landscape, and added a lot of string lights.

What was the outcome?

The outcome has resulted in a short term rental that has way outperformed what we anticipated. Where we expected to gross between $30-40k, we are grossing $60k and generating around $2000 per month in cash flow.

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

As an experienced agent working on the Cushman Homes team, I can help guide you through your own STR journey. Let me help you find a great deal in north GA!

Investment Info:

Single-family residence buy & hold investment in Sevierville.

Purchase price: $290,000
Cash invested: $40,000

Closed late March 2021 and went live on Airbnb/VRBO mid-April and started cashflowing!! :)

Since we launched in mid-April 2021, this property has grossed about $72K per year or about $6K per month. Net of cleaning fees, it grosses on average $4800 per month. Less our OpEx (mortgage, taxes, insurance, utilities) and CapEx allocations, this property cashflows roughly $3,000 monthly.

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

Math.. :) I count myself extremely fortunate I got in the market before the massive uptick in home values. The projected income and the cost to buy were really good-looking and turned out to be better than expected.

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

I had my realtor set up a search. I used the search portal to check listings frequently. I found a listing for a new build cabin and offered the listing price for it. The market was heating up so I did not try to push on the price. I did bump the contract price up by $20K and for there to be a credit issued to Smokey's Furniture which covered some high end furniture, and a hot tub.

How did you finance this deal?

Conventional 10% down 2nd home loan and the deposit came from a 401K loan.

How did you add value to the deal?

We added value by furnishing the property, adding a privacy wall and pergola over the hot tub, string lights, updating/upgrading light fixtures and plumbing hardware. In 2024, we are upgrading the outdoor space to include a putting green, a nice firepit situation, a playset, and expanding the deck.

What was the outcome?

It has been a wildly successful investment for us. It is worth probably $200K more than we paid for it and has given me a nice pay raise the last 3 years.

Investment Info:

Single-family residence buy & hold investment in Sevierville.

Purchase price: $290,000
Cash invested: $40,000

Closed late March 2021 and went live on Airbnb/VRBO mid April and started cashflowing!! :)

7/28/22 Update

Since we launched in mid April 2021, this property has grossed $110K (through July 2022 - 15.5 months). Net of cleaning fees, it has grossed $93.7K. This amounts to about $6K per month. Less our OpEx (mortgage, taxes, insurance, utilities) and CapEx allocations, this property cashflows roughly $3,000 monthly.

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

Hunted for a couple years for the right RE investing strategy for me and this spoke to me the loudest. Avery Carl turned the light on for me!

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

I reached out to the Avery Carl Short Term Shop team and my realtor Jeana Maddux set up a search for me. I found this new build opportunity and got it under contract at asking price.

How did you finance this deal?

10% down conventional 2nd home loan. I got the down payment money by going to my 401K administrator Fidelity and taking out a loan against my 401K.

How did you add value to the deal?

Added hot tub, high end "cabiny" furniture, modern decoration, built a pergola and privacy wall on the back porch.

What was the outcome?

The outcome is that it seems like I struck gold with this property. Not only does it cash flow spectacularly, but property values have been insane since we got this under contract. We bought it for $290K in 2021 and probably could sell it for the mid $400's now.

Lessons learned? Challenges?

Working with new builds and builders has its own set of frustrations but was the way that worked for us. Builders overestimate their ability to hit the original close date by gigantic margins 100% of the time.. in my experience.. :) This one was 4 months off, my other one was 5 months off.

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

Yes! Jeana Maddux with The Short Term Shop.

Thanks @Chris Levarek!  I would agree.. I did have higher expectations for the hot travel months than what we got.  My first cabin which we launched spring of 2021 has seen a decrease in revenue in 2022.  And yes, differentiation is helpful.  I would say we have differentiated a little and having a pool in one of them is a big deal because those aren't super common but even despite that, we've felt it.  

@Kevin Luttrell Thank you! Yes, we closed on it late August 2021 and launched it mid-September and those rental figures are since launch through July.  So the target will be $130K by mid-September 2022.. our launchaversary.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $545,000
Cash invested: $77,300

The "Knot Too Shabby Chalet" - 3/3 cabin in Pigeon Forge that has a small pool in the basement. My brother and I partner on this property. He brought the bulk of the upfront investment and I bring the setup and ongoing management. Through July 2022, we have grossed $117K. Our monthly operating costs are about $5K which includes paying cleaners and pool service personnel (our electric bill is over $500 every month.. (shock face emoji)). Our 1yr goal is for $130K ($100K net of cleaning fees).

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

I got interested in this type of deal originally from Avery Carl's BP podcast episode and after doing some investigating myself in how much potential there is in STR's in the Smoky Mountains, wanted to run as fast as I could there.

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

My realtor let me know of new build opportunities that were not marketed on the MLS.

How did you finance this deal?

10% down 2nd home loan in my partner's name

How did you add value to the deal?

We added some furniture and entertainment to the space. We also added a hot tub and changed out a lot of the decor to make it unique and stand out.

What was the outcome?

We have maintained a high level of occupancy and have been profitable every month since launch.

Lessons learned? Challenges?

Plan for 15 trips to Home Depot when preparing a short-term rental... :)

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

Yes! The Short Term Shop team and specifically Jeana Maddux.

Thank you Dmitriy!!

Investment Info:

Single-family residence buy & hold investment in Sevierville.

Purchase price: $290,000
Cash invested: $40,000

Closed late March 2021 and went live on Airbnb/VRBO mid April and started cashflowing!! :)

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

BP podcast #364 with Avery Carl. Listened to BP for a couple of years and couldn't figure out really how to get the ball rolling and this STR path screamed at me... DO THIS!!

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

Fount it on MLS as a new build. Offered asking price and the offer was accepted.

How did you finance this deal?

10% down 2nd home loan.

How did you add value to the deal?

Baked in 20K worth of a furniture allowance and furnished the STR with durable high-end rustic cabin furniture and my wife decorated it beautifully.

What was the outcome?

We were able to start cashflowing within a few weeks of going live on Airbnb/VRBO. I expect that it will gross $50-60K per year.

Lessons learned? Challenges?

I kind of knew this already but it closed 4 months later than original expected close date. I expected it to be delayed somewhat but not quite that much. I was so anxious to get in the game.. to hurry up and wait for months on end was definitely a challenge.

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

Avery Carl and The Short Term Shop team.