Knoxville for Beginners?
Hi all,
I live in Santa Monica and am looking to buy my first investment properties before the end of the year. Ultimately, I would love to scale to a large portfolio over 10 years, but to get started, I want a fixer multifamily under $250,000. This is literally impossible in LA, so I am looking out of state and Knoxville continues to pique my interest. Ideally, my first investment property would either be a long-term rental or a mid-term rental for travel nurses/traveling business professionals.
Does anyone know much about beginner investing for Knoxville? What neighborhoods are good vs. what I should avoid? Any other market insights?
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Good morning Brendan! Congrats on focusing in on Knoxville, it's a good location and still has some instant cash flow, as crazy as that sounds in this market. Just to be realistic though, $250k wont buy you a multifamily here unless you are going farther out of town, or are talking about a distressed property from wholesaler.
I personally have found long-term rentals to be my own personal happy place but I'm a little less risky. Our foray into travelling nurse furnished rental flopped a bit because in this market, you have to be in the exact right spot (Oak Ridge, Downtown Knox) or a small 1-bedroom at a low-price point. Truly the bread and butter of travelling nurses in Knoxville this summer seems to be the unused extra 1-bedrooms in a family home that people are renting $800-1000/month all in. Those rooms also do well for travelling couples, students, etc etc.
Example: this is only Multi (duplex) under $300k currently. Let me know if you want to talk more details and we can hunker down and start diligently searching out the right place.
Good morning Brendan! Congrats on focusing in on Knoxville, it's a good location and still has some instant cash flow, as crazy as that sounds in this market. Just to be realistic though, $250k wont buy you a multifamily here unless you are going farther out of town, or are talking about a distressed property from wholesaler.
I personally have found long-term rentals to be my own personal happy place but I'm a little less risky. Our foray into travelling nurse furnished rental flopped a bit because in this market, you have to be in the exact right spot (Oak Ridge, Downtown Knox) or a small 1-bedroom at a low-price point. Truly the bread and butter of travelling nurses in Knoxville this summer seems to be the unused extra 1-bedrooms in a family home that people are renting $800-1000/month all in. Those rooms also do well for travelling couples, students, etc etc.
Example: this is only Multi (duplex) under $300k currently. Let me know if you want to talk more details and we can hunker down and start diligently searching out the right place.
Hi Brendan,
Knoxville is a solid market with a number of different plays to look at. If you're looking for a fixer upper multi in that price range, it's not impossible, they're just a bit more rare. I picked up a duplex in knoxville right off the MLS 2 weeks ago for $185k. Needs $55k rehab. ARV $320k and i'll gross $1500/per side easy.
Always happy to chat about the area and the different plays available.
We've had lots of luck purchasing single family "long-term" rentals and converting them to short or mid-term rentals over time. Buying closer to hospitals, campus and other areas in Knoxville will be a challenge at $250,000. That's the going rate now for a single family fixer. A large mass of investors using your same formula have come in and driven the prices a little higher that usual since Tennessee, and especially Knoxville, didn't lock down or didn't raise their taxes significantly since the beginning of COVID. With conventional and non-conforming loans knocking on 10% - our supply of homes has been creeping up gradually over the past few month. This month we broke the 4,000 net on the supply side. It's been a unique seller's market for ages and is historically a linear market with 4% growth annually - but that's out the door since the value of $1 is down 22% since 2019 and lots of people have zeroed in on Knoxville as a long-term retirement home.
Both of those pressures have led to 25% annual price raises. With the addition of more and more homes on the supply side and the interest rates inching toward 10% the price points should be on the decline. But we havent' seen that.... yet.