First investment in Tennessee

25 Replies

Hello!

I'm a newbie real estate investor based in Honolulu, HI. I want to invest in an up-and-coming market that's a little more affordable than Hawaii, and Tennessee has come up in numerous conversations I've had with family, friends, and investors. I've done some research on the Clarksville-area and am considering doing something there. I like the proximity to Fort Campbell, new LG manufacturing plant, and the fact that APSU is in the city. I have a couple of friends living in Clarksville and they have only good things to say about it. Granted, I know there's "good" and "bad" parts of any city.

I am looking to purchase a small multi-family unit and would be open to other parts of the state, as well.  I'm in the early stages of searching for a property and sifting through potential financing options. I've talked to several lenders and realtors in Clarksville, but am still feeling it out and getting an idea of the types of properties, tenant pool, etc. in the area.

Are there other parts of the state I should be considering? Can anyone recommend potential lenders who are familiar with investors? Realtors? Property managers?

I just realized BP has sub-forums, so I figured I'd put it out there to the Tennessee community! Much thanks in advance!

Hi Travis, Clarksville is a good place to look for investors. I'm a Realtor in the Mid Tennessee area. Portland and Murfreesboro are pretty good areas to look also. If you have any questions, I'd be happy to help. 

Thank you

@Braxton Bryan Thanks for the suggestions! I'll definitely look into Portland and Murfreesboro as potential spots. In your opinion, what's the major draw for these areas?

I just closed on two duplexes in Clarksville about two weeks ago.  We close on a single family bankruptcy next week.  I have a couple properties around Nashville and Murfreesboro, but am getting priced out of that market.  We went to Clarksville for all those reasons you listed.  Portland is cheap as well, but a lot more rural.  Good luck!

@Travis Henry Most recently, we worked with F&M Bank on a line of credit, which is a local bank based out of Clarksville. They were great and I enjoy banking there now. We used the line and some cash from a flip to pay for the duplexes, which we will refi here soon. Kristin Fleming was the lender there, but she has since moved to Macon Bank and Trust, another local bank. I will most likely use here for the refinance as well. I can message you her info if you decide to go that route.

Hey Travis I am a local Agent/Investor in Clarksville Tn the Army brought me here almost a decade ago and it's what brings so many to this city and why so many stay or end up coming back. I agree with you there are pros and cons to any town but Clarksville does have a lot going for it!

Just one thought on Murfreesboro is that there’s a ton of rentals around herealready & the city continues to build a lot of new houses because the city is rapidly growing. It may very well not matter at all & they may end up building an appropriate amount of houses... but as a homeowner in Murfreesboro & someone who is looking to get my first rental property, I’m avoiding Murfreesboro because I have a fear that it’s being over built. That’s just my opinion & I can’t say I have any real insight into that theory other than its just a gut feeling. Luke may disagree & may have some better knowledge if he owns some rentals here in MB.

The positives about MB is that the 2nd largest public university in the state is here, Middle Tennessee State. The public schools in the county (Rutherford) & the city of Murfreesboro are some of the best in middle TN. & currently Mb is the fastest growing & most affordable suburb of Nashville (hence its fast growth).

@Luke Naylor Funny you should mention F&M Bank. I'm actually talking to Matt McWhirter at F&M right not about financing a multi-family purchase in Clarksville. He's really awesome; I was just curious to know who the local investors are doing business with.

@Bryce Stclair Great to hear you've had such a positive experience in Clarksville! 

@Ben Parrish Wow, thanks so much for the detailed insight. From what it sounds like, the MB ship may have already sailed. Of course, I'm sure there are still opportunities, maybe just a little harder to find in a city growing as fast as Murfreesboro.

Since you're looking outside of MB for your first rental, are you looking at other areas within the state or are you thinking of going beyond Tennessee?

I have been looking at Clarksville deals lately and one thing that concerns me is the transient population.  There seems to a high supply of rental housing which drives prices down.  Has anyone else seen or have any insight on this issue?

@Brandon Brown I've run several properties using rough rent estimates from realtors and Rentometer, and it sounds like you're right about the downward pressure on rents. I've come across a few SFHs with some potential but many would be hard to justify unless you got a killer deal on the purchase.

@Travis Henry I haven't looked too much into other areas of TN. I have heard that Clarksville has its advantages though. I've actually narrowed in on a city outside of TN that I have been looking more into. I'm from east TN (Johnson City) so I have some interest up there & around Knoxville but I haven't dug too much into deals there.

But as you said, I’m sure MB would work really well if you can find a great deal but they’re just hard to find here. 

Hey, Travis! I’m a realtor in the Clarksville area. There does seem to be a lot of interest in Tennessee in general, especially from people in other areas where prices are much higher. Good luck with your endeavors! :)

Glad I found this thread! Just moved to the Clarksville area a few months ago, still trying to familiarize myself with the area but I can see the potential here. Areas around Ft Campbell and APSU are a bit rougher but have multifamily units, going away from the base towards Nashville there is less crime and mostly single family homes. Good luck Travis!

@Eric Yi Thanks for the information! Even though I’m not living there myself, welcome to Clarksville! I’d be interested to hear how/if your thoughts change as you get to know the surrounding area.

@Travis Henry Tennessee seems to be a great market. I live in Dayton,TN and people around this area are buying properties left and right. Duplexes are normally on the market a day before sold. I would suggest looking between Chattanooga and Lenoir City TN for deals!

Just saw this thread and thought I'd weigh in. Clarksville is a good place for a multifamily rental, but there is little growth in the market, which will make it more difficult to move the property on the back-end should something happen and you need to liquidate inventory quickly. Nashville, on the other hand, is a very hot market. It would definitely be worth your time to check out not only multifamily properties, but smaller single family rentals. You can more easily diversify and separate investments by buying in several areas of town.

Good luck! If you have any questions about the Nashville and surrounding areas please feel free to reach out.

-Ross

@Ross Matuszak Hi Ross! Thanks for the insight! The thing that initially drew me to Clarksville was the stability from base guys coming through Fort Campbell and the students from APSU. I could be completely off here, but I'm wondering if the addition of the LG plant might spur growth to a point where it might be as difficult to exit in the future, as you're suggesting.

I'll definitely keep Nashville in mind, and will be sure to reach out with any questions on the area. Thanks again, Ross!

@Travis Henry that's definitely a possibility. There will always be a market for rentals in Clarksville due to the base, the generally lower real estate costs, and the guaranteed population due to the base. However, the real estate prices there have leveled off. Nashville is still on the rise right now (at least until the bubble bursts, which it absolutely will). Until then, I'd take a hard look at Nashville, especially the "up and coming" neighborhoods. If you're not afraid of putting a little work into properties, there is a ton of money to be made!

Good luck!

My .02 on Clarksville (I looked at it ten years ago) is to be careful.  The base accounts for a fair % of residents and if the 101st gets deployed it will create a vacuum that won't quickly be filled.  

@Brian Levredge Sorry, Brian, literally just saw your post! That's a great point and one I hadn't considered. Maybe you can help provide some clarification on how this would work - let's say we have a family of four, and the dad gets deployed with the 101st. Are the wife and kids able to leave the property, essentially ending the lease prematurely? I could imagine a case where the wife may decide to move the kids back to their home state...

It's actually a federal law.  A member of the military need only show deployment papers to break a lease.  There is no recourse.  There is 30 days notice and normal routine of deposit itemization to follow but you can't charge extra fees or evict/collect. As far as additional family members go I'm not really sure and that would best be answered by an attorney.  I will say that if the deployed member is the primary qualifying person from an income standpoint you wouldn't want the remainder of the family staying behind if they can't afford to pay the rent.