New Investor in Nashville, TN – Seeking Advice on SFRs or Small Multifamily

[Harrison Beckham]

Hey everyone!

I'm based in Nashville, TN and looking to take my first step into real estate investing. My primary focus is on cash-flowing properties with a long-term buy-and-hold strategy. I’m currently exploring both single-family rentals and 2–4 unit buildings.

Given today’s interest rate environment and rising property prices in many areas—including here in Nashville—I know I’m entering the market at a challenging time. That said, I believe the fundamentals of real estate still make it one of the best paths to long-term wealth, and I'm ready to learn and take action.

What I’m Looking For:

• Advice on how to get started in a high-cost or competitive market like Nashville

• Thoughts on starting locally vs. going out of state

• How to evaluate markets that are good for cash flow

• Tips on building a remote team if I go out of state (property managers, contractors, agents, etc.)

• Insight on financing strategies for first-time investors (e.g., conventional vs. portfolio loans, house hacking, etc.)

• Common mistakes to avoid on your first deal

If I go the out-of-state route, I’m aware that it can be riskier for a first-timer, but I’m open to it if it means I can find a better deal. I'd really appreciate input from anyone who's done their first deal remotely and how you handled the distance, due diligence, and team-building challenges.

I’m trying to be methodical, but also avoid analysis paralysis. If anyone has market recommendations, resources, or just a few nuggets of wisdom from your own experience, I’d love to hear it.

Thanks in advance!

[Melissa Justice]

@Harrison Beckham,

Hey, welcome and major respect for the clarity and thought you’re already bringing to the table. You’re asking all the right questions, and you’re definitely not alone in wrestling with how to start strong in today’s market.

Let’s break this down with some actionable guidance:

Getting Started in a Competitive Market Like Nashville
Nashville is an amazing city, but it’s also a hot, high-demand market. That means tighter cash flow and more competition. If you’re set on starting locally:

* Look for undervalued pockets just outside the core (think Clarksville, Columbia, or even parts of Murfreesboro).
* House hacking (duplex, triplex, or SFR + ADU) could be a great way to offset costs while staying close to home.
* Network hard locally - agents who specialize in investor deals are gold.

Local vs. Out-of-State: Pros & Cons
**Staying Local**
- Easier to manage or check on
- Build hands-on experience
- Tighter margins in Nashville

**Going Out-of-State**
-Better cash flow
-Landlord-friendly states
-Requires a solid team and more upfront due diligence

If cash flow is your top priority and you’re open-minded, out-of-state investing in the Midwest or Southeast might be your best move, especially for a buy-and-hold strategy.

Top Markets for Cash Flow Right Now:

These are all turnkey-friendly and beginner-friendly:

*Birmingham, AL
*Indianapolis, IN
*Cleveland OH
*Augusta or Macon, GA

All have solid rent-to-price ratios, affordable entry points, and reliable property management infrastructure.

Evaluating a Market (Checklist Style):
* Landlord-friendly laws
* Low property taxes
* Population and job growth
* Diverse economy
* Strong rent-to-price ratio (1% or better is great for cash flow)
* Good local turnkey teams or PMs

Financing Tips for Your First Deal:
* Conventional 15–25% down: Still the most straightforward route.
* House hack: FHA (3.5% down) or conventional (5%) if you're willing to live in it.
* Portfolio lenders: Great if you want to scale quicker or buy in LLC.
* DSCR loans: For out-of-state investors - based on property cash flow, not your income.

Common First-Timer Mistakes to Avoid:
* Overestimating rent or underestimating expenses
* Buying in a bad area just because it’s cheap
* Not vetting the property manager
* Emotional decisions over data-driven ones
* Skipping proper inspections or due diligence

You’re already doing the hardest part: asking the right questions and taking the initiative to plan thoughtfully.

You can invest remotely as a first-timer - just be disciplined with your numbers, vet your team hard, and be willing to move forward without everything feeling 100% perfect. Done right, your first deal can be the foundation for financial freedom.

If you'd like help comparing markets or analyzing a deal, feel free to reach out. You’re on the right track! 

Best of luck,

Melissa