East Nashville Duplex Analysis

7 Replies

Hi guys, I found a listing in East Nashville. Very hot area right now. East of Gallatin road. 

Asking $270K
Monthly Rent Roll is $2300
Taxes: $3k (i'm not sure why so high)
Insurance: 1K (assuming)
Prop mang: $2760 (10% of gross rents)
Maintenance: $2760 (assuming 10% gross rents)
Tenants pay all utilities and lawn work.

All utilities separate (water/elec/gas)
Separate HVAC units & water heaters
Off street parking (paved driveways) front & back (alley access)

UNIT A ($1450 Rent)

UNIT B ($850 Rent)

I know this is a terrible deal for most people but can the Nashville natives who know the current market in Nashville let me know if this is something that would be an acceptable deal in that area? 

I know only suckers bank on appreciation but east Nashville has been growing so much the past few years, and only set to grow further. 

Any thoughts?

Thanks for the Feedback!

wouldn't fit into my numbers

I've sold both of my east nashville investments cuz the area's prices versus rents are too lopsided 

Thanks for the Reply @Seth Mosley  

Do you think east Nashville is currently in a Bubble? Why are the properties selling within days for asking out there? You think the appreciation will keep going strong? 

If not East Nashville what other neighborhoods are you looking at? Madison? Bentwood?

right now Nashville in general is tough to find slam dunk deals

I have a few that I'll be syndicating soon if you'd like info when the time comes 

@Tutti Patel I would definitely have to agree with @Seth Mosley. The market is pretty tight. Couple investors I personally know have told me they give east nashville and a few other places 2-3 years at most before a bubble pop occurs. Prices cannot keep increasing at the rate they are increasing without repercussions  

I don't think East Nashville is anywhere near a bubble. There's a legitimate influx of jobs and people, and until that slows down Nashville isn't plateauing. There are other much more attractive investment areas of town, though.

That said, those numbers are horrid. And you can expect your insurance to be at least twice what you're estimating.

Speaking from experience in TN now, taxes are HIGH on duplexes because they are considered commercial, or at least in West TN that is the case. I have 2 SFH and the taxes are 350 each. I have a duplex and the taxes are 2k...Just the way it rolls on Duplexes which is why my strategy changed.

In regards to banking on inflation, I wouldn't do it...You are in Nashville...Lots of properties out there that will be MUCH BETTER deals than this one.  

Most investors also include "vacancy" in their analysis. I didn't see where you included that expense. Your last paragraph was very important as I learn about buy and holds…don't bet on appreciation.  Take your cash flow to the bank every month.