All Forum Posts by: Charles Jabaley

Hey Jon! Happy to connect with you man! I'm actually a Realtor, investor, and active wholesaler here in Chattanooga, and I do a lot of business in Cleveland as well! Sounds like you're definitely on the right track, investing in yourself through those avenues of education is definitely the way to go. I'll shoot you a message to connect further!

It's definitely still possible to get an offer accepted with this contingency, but in multiple offer situations, it's super common for people to adjust their offers and remove that contingency. It's not always necessary to waive the entire contingency, but even offering a slight appraisal gap and saying you'll make up a small difference in cash (if the appraisal comes in low) goes a long way. But I agree with @Jason Silvenis - if you're buying a fixer-upper, appraisal contingency probably isn't necessary. Hope this helps - good luck!!

 Thank you so much Brian!! Appreciate you!

So I know some investors that have had a lot of success with Chattanooga STRs, and it has a huge amount of upside because our city attracts so many visitors. But there's definitely some hoops to jump through (although the approval process is easier now than it used to be). 

It is required that postcards be sent to all neighbors within 300 feet of the property. It used to only take 1 neighbor objection to deny the STR license, now it takes 4. You can appeal this denial, but it almost always stands if a single member of the objecting party shows up to the appeal. I also want to mention that, assuming it's a non owner-occupied STR, the owner is required to have a business license, an STR license (obviously), and is responsible for collecting and remitting occupancy and sales taxes among other requirements.

If you see a potential STR opportunity, I'd recommend looking to see if there are currently active STRs on the street... Your chances of getting approved are better because they already had to go through the approval process (assuming they did it the legal way).

I can connect you with a Property Manager here who specializes in STRs and manages several if you want to send me a PM. He would probably be more help than me on the topic. He also knows the ins and outs of which locations are easier / more difficult to operate STRs. Also here's the city site with some details and points of contact for STRs if that's helpful:

https://chattanooga.gov/public...

Hope this helps!

A lot of investors have been starting portfolios here in Chattanooga because of the recent appreciation we've had (15% growth each of the past 2 years), and because it still has a lot of room to grow. It's a favorable rental market here, with a steady diet of young professionals flocking in. The city has put a lot of resources into developing the downtown area as well, which should continue pushing up property values to the surrounding pockets. Steady population growth and job growth, along with some other favorable market indicators, continue to make Chattanooga a pretty popular choice for both local and remote investors. I've heard good things about Columbia as well (I have also done some remote wholesaling there). 

Buyer demand in Chattanooga is very high right now just like a lot of cities, with the amount of first-time home buyers and out-of-state buyers moving here from some larger areas like California or New York. So it's definitely a competitive climate, but I'd be pretty surprised if Chattanooga prices changed their upward trajectory any time soon with the amount of demand we're seeing. Just my two cents!

@Jacob O'Malley Hey Jacob! Sounds like a pretty exciting time for you moving to a new city. I was born and raised here in Chattanooga, so I'm admittedly biased haha, but I think you'd love it here. I'm actually the same age as you, and I LOVE it. I enjoy bigger cities as well, but I feel like Chattanooga is the perfect size where there's plenty to do but it doesn't feel overgrown like some other cities like Atlanta or Nashville. Still plenty of room for Chattanooga to grow, and I think it will continue to do just that, which is why I  believe that it's still a great time to buy here, as prices will continue to rise (just my opinion).

Outdoors-wise, there's plenty of good hiking spots and we also have the river here where people fish all the time. The downtown scene has really improved, with lots of really cool breweries popping up that's kept a steady stream of young people moving here from all sorts of places.

Your plan to house hack is awesome!! Your future self will thank you. I actually house hacked last year and bought an off-market duplex in Harrison (east Chattanooga) right near Booker T. Washington State Park, which is a beautiful park on the river here. If you were to consider Chattanooga, I think Harrison would be a great spot for you here because it's not too far from downtown (20 or so minutes) and it's right near the lake with some beautiful hiking trails surrounding it.

As far as the market, it's definitely competitive. However, the deals are out there. The duplex I bought needed a little work, but I got it in the mid 100s. It's worth way more now. I used a 3% down conventional loan just like you want to. There has been pretty decent off-market deal flow, so that may be good for your situation. But getting offers accepted on MLS listings right now is still very possible. Multi-units are more competitive than SFHs right now, but both are highly coveted.

It would likely take an aggressive offer, but there's a lot of ways to strengthen an offer that doesn't involve price. Different terms are more important to certain sellers than others, so I think understanding the seller's situation and what they value most is the most helpful tool of all for getting offers accepted.

Hope that helps, best of luck!!

I second @Adrienne Green's insight on Chattanooga. Chattanooga's appreciation the past few years has been pretty incredible, but there's also still plenty of room to grow as more jobs continue to enter our region and we continue to get a heavy mix of people moving here, both young and old, coming in from out west as well as up north. It's virtually impossible to get a great MFH deal on the MLS right now, but the deals are out there. Seen lots of investors get great deals on MFH off-market these past few months. Hope that helps and good luck!!

Hey Xayvier, that's awesome man! You're definitely on a similar path as myself, I am a Realtor here in Chattanooga and closed on my first house hack in May! I'm happy to help answer any questions you have about the process. 

The biggest advice I could give you about finding a house hack is reaching out to as many people in the industry as you can and tell them what you're looking for. Rather it's realtors, wholesalers, fellow investors, etc., put out as many feelers as possible. I found my deal off-market from a wholesaler friend of mine. So just make as many connections in the industry as you can and keep checking in with everyone, and hopefully you end up with a pretty good deal :) Good luck and reach out if you have any specific questions!

Hey Eric! Nice to connect. I'm a Realtor here in the Chattanooga market that works with out-of-state investors all the time.

Right now, much like across the country, inventory here is obviously very low, which has pushed prices up for the time being. So while this does make cash-flowing deals a bit more challenging to find, they're still out there.

I will say, generally speaking, a 3/3 at 1700 square feet within walking distance to UTC/downtown should be getting $2,000+ in rent, easily. Obviously each property is different and it's a case-by-case basis, but unless there's a good amount of work needed on the property, there's no way rent should only be $1,700. If you haven't connected with a good property manager in our market yet, let me know - I have an excellent one that I can recommend that is an excellent resource for my clients as it pertains to rental values and rental comps. The UTC/downtown area has been steadily growing for a while now, and it's one of the hottest spots in Chattanooga. The city continues to attract more and more college students and young professionals, which continues to increase demand for housing in the downtown area, helping the short-term and long-term outlook. While Chattanooga has already shown significant appreciation in the last couple of years (19% increase in median sales price since 2018), there's still plenty of room for growth, and the downtown area will continue to benefit as the city pours more money and resources into its rejuvenation. 

The last thing I will say is that owning rental properties around blooming colleges allows you to think outside the box a bit. I had a client land a rental property 2 minutes from UTC - it was a 4 bedroom and the initial rental estimate was $2400. But instead of settling for that, we were able to successfully implement a rent-by-room strategy with 4 UTC teammates on a sports team there. Each of them pay $850/month, which adds up to $3400 gross rent... not saying that's always attainable, but it's a creative way to maximize rent in an area with a large pool of possible tenants. The college scene presents a really unique opportunity with rent-by-the-room that I feel is under-utilized. I've heard of investors doing the same strategy with Cleveland properties near Lee University. Just an idea :)

Anyway, hope this helps! Feel free to reach out anytime, would love to connect further and help however I can!

Hey Dustin, I've got a guy that I can recommend! Send me a PM and I'll share - would love to help!