Anyone ever invested in Tennessee? (Memphis, Nashville etc)

18 Replies

Hey Guys,

I was just wondering if our community could help me out with a little info....

I am looking at doing some multifamily investing in the future and am researching markets that make financial sense....Has anyone out there ever owned any multifamily properties in say Memphis or Nashville? The numbers pencil out well but I am not sure how the rental market is there and what the future outlook is...Rents are definitely low and people you talk to from there paint a rosy picture, but I want to know from someone who has some hands on experience in the area.....

Insights and comments are appreciated...thanks

Jeff Banky

@Jeff Banky  

At least here in Memphis, in order to get into a decent multi-family area its going to be higher priced then single family homes for sure.  We are not known for having a great multi-family market.  Some of the better areas that are reasonably priced are in Midtown here. 

Rents are lower, units are older and your dealing with lower end tenants on average.

The numbers always look better but you would be better off going the SFR route here.

Good luck

Curt Davis, Real Estate Agent in TN (#00321765)

thanks kurt!

One of the burbs of Nashville, (I would imagine) would be a great place to start. Nashville is pretty easy to navigate and the low end, middle, and high end have little over lap. Brentwood being high end for sure. Franklin would be a great option to look into as it is not highend like Brentwood but is still a very nice city virtually touching nashville. 

Personally I would look to a slightly smaller market such as murfreesboro. It is a very short drive to nashville (20mins with in commuting distance), and is a college town (MTSU, among others). Strong growth and a much smaller price point with less "bad" areas. 

These are just my non expert opinions, just tossing out some alternative ideas. Im not as well versed with buy and hold, but I did stay in a holiday inn once... :P

Does anyone know anything about the Chattanooga market?

@Jeff Banky  

 Memphis is a great rental market and cash flow is still possible. Multi fam props that I looked at were mostly junk or over priced.

Nashville is great but expensive and very competitive. As @wane tango said above it might be easier to work the bedroom communities,

@Glenn Willeford  Chattanooga is a wonderful market. It is on the grow for sure with Amazon and VW. I was compiling a demographics report for some of my buyers and fell in love with it. I am moving there in the Spring. I have some nice multies there and the surrounding cities (5-10 minutes away). PM me if you want more info.

Best of success to you

@Glenn Willeford   I am in Chattanooga. STRONG rental demand, which has caused rents to rise the past few years. In fact Chattanooga made the "top 10 rental increases" list earlier this year (based on percentage). It's tough to find great deals, we have a multifamily shortage right now. Several big apartment projects be developed around the city. 

A couple of big drivers are the Volkswagon plant, which is being expanded and will double its workforce when completed to over 4,000 workers, and the University TN-Chattanooga. UTC has a major shortage of student housing. It is located downtown, which has seen a major revitalization/gentrification which has put further pressure on available housing. 

I'd be happy to talk specifics, I'm an agent and I also flip and own/manage rentals. 

@Jeff Banky   I would say Nashville, Antioch have great mutifamly opportunities. Nashville is growing pretty fast and the market is on fire here. The problem of course is finding properties priced at a number that make sense. The market here is very competitive. The good news is that rents are on the rise (well for us investors it's good news). There are still deals out here in nashville, It's just in who you know ;-)

@Wayne Woodson is Antioch getting better.  I visited about a 1 year ago and it seemed pretty sketch for the prices you have to pay...

It's growing as Nashville grows and is getting better. I still think has a long way to go to be a East Nashville or a 12th South. There are both good and bad parts of it but I think North Antioch going twords the fairgrounds will explode in the comming years. If I had the money I would be buying as much rental property around that area as I could.

Our company actually just passed on the opportunity to purchase a large property (336 units) in Antioch.  We primarily invest in A and B locations and Antioch is still a C submarket.  Good opportunities perhaps, but still an iffy location in my mind.

Nashville overall is a booming apartment market.  Strong rent growth, strong job growth, all the intangibles you want to see.  Pricing expectations reflect that however.  Tough to find good values because of competition.

That said, we picked up 200 units in Goodlettsville in October.

@wayne tango mentioned Murfreesboro. I purchased a couple places in Murfreesboro back in 2006. My first purchase was a triplex that was a disaster. The realtor forgot to mention that the block I was buying on was the problem drug dealer block of the small city. I would talk to a local property manager there first so that they can tell you which streets to stay away from. Once I had an idea of the city, I did better with my purchases afterwards. Two of my tenants showed up drunk the day they were moving into my problem triplex and the property manager had them arrested because they would not leave as the place was not ready. They then called me all night drunk after they were released from jail. The next day they called me sober asking for another chance to move in. very funny voice messages.

9162612381

If you listen to podcasts, the latest "Get Rich Education - Keith Weinhold" episode has an interview with a turn-key flipper from Memphis.  You get better, less biases information from the forums here but it's somewhat interesting.

@Jeff Banky  If your doing multi family I would stay away from Memphis unless you plan on purchasing in the B grade or higher areas. 

@Gary Spicer

I know the guy on that podcast you mentioned.  He specializes in lower income areas of our city.  Hard to believe that the occupancy is that high knowing where he manages, I might have to pull out my BS card. He does do a fantastic job renovating the homes.

Curt Davis, Real Estate Agent in TN (#00321765)

@Jeff Banky  

I have invested and lived in both places, Memphis and Nashville.  I currently own several multi-family units here in the city and yes they are in C neighborhoods and yes the rents are on the lower side unless you are looking to purchase some of the multi million dollar apartment complexes we have here to sale in the A and B areas of the city.

Here is another forum that you can view..

Multi Family in Memphis

As far as Nashville Multi I have no knowledge of it I moved from the Antioch area in 2006 and I visited it several times recently and yes it has changed A LOT!!!

I am with Curt on this one. Unless you are buying areas like Midtown proper or East Memphis multi family will empty your pockets in Memphis

I invest in Nashville and I'm always looking for a good deal. If you know of hear of any just give me a call. 

@Jeff Banky

Hey Jeff,

In the downtown district Nashville just passed $3/sq ft for rental rates. 600 sq/ft high rise units are going for $1,800/month all day. The MLS for single family homes is smokin' hot. I talked to a guy yesterday who was taking a client around to look at homes and 6 of the 8 units they went to see were already sold same day. 2 of those were sold within 3 hours of getting listed. He said his client was nearly in tears. It was the same story for my parents about 6 months ago. They had to buy based on one walk around the property from that morning's MLS sheet.

I know some people have mentioned Antioch as a good opportunity, I would tend to agree.  I grew up there and live in between Antioch and Brentwood now.  So, Antioch just got word of 1,400 CHS (hospital system) jobs going into the location where Old Hickory mall was.  Also, that mall has been converted to a data center for HCA among other things.  There is a very large green space that is in planning for the area, and they also just received a new middle school over by Percie Priest Lake that is supposed to be pretty nice.  To be completely honest, Nashville is exploding right now and while I know we don't like to speculate on appreciation, you will likely pay retail in this market and still experience strong appreciation for 2-3 more years.  We literally have foreclosure banks asking for retail prices...even if it means they have to hire a contractor to replace paint and carpet to get it.

The one major downside is traffic.  We are easily 10-15 years behind where we need to be in terms of mass transit infrastructure.  Our culture is still trying to go through a transition to accept mass transit since it is new to town.  The bus line vacancy right now is 85%!  I know a few of the mayoral candidates have focused their campaigns around that topic. 

 (oh yea, there will be a new mayor by the end of the year...but no worries, all of the front runners seem real estate investor friendly.)

Best of luck!

Mykael