All Forum Posts by: Christie Speciale

Chattanooga is a fabulous market, and you're right to consider it.  There are a lot of good points made on here that we can't recommend a market without knowing your specific goals.  In comparing Chattanooga to Memphis, Chattanooga is more of hybrid market where you'll get cashflow and appreciation, versus Memphis is more of a cashflow market (to my knowledge).  Chattanooga is growing- 45th metro area in the nation. in terms of growth in 2021.  Low property taxes, growing population, etc.

Chattanooga has a respectable number of MF, I will say SF is also a fabulous investment in the area.  I typically recommend in this market people stay open to both options, and just evaluate the deals.

Knoxville is the other area I'd look in TN, based on what you have shared.

Hi @Christie Speciale

Have you looked in South Carolina? Myrtle Beach still has good cash flow opportunities for STR's

I'm from Memphis and used to own several rentals in the East Memphis area. I have sold all of my Memphis rentals and converted them to STR investments. While all of my Memphis properties performed well for LTRs, I will not be investing in Memphis in the future for a few reasons: Crime is pretty out of control (if you're not from the area, it can be tough to navigate this), it can be a tough rental market due to professional renters (folks who take advantage of landlords), and the last reason is that it's highly competitive. Most of the deals are captured by turn-key companies and sold to out-of-state investors that are okay with thin margins because the real estate is cheap.

I'm investing in Smoky Mountain STRs and Knoxville LTRs in the near future. Both are great markets. 

@Christie Speciale

First off, where you invest has a lot to do with why you are investing. You say you want to invest in long-term rentals and I assume you are going to be hands-off? Are you looking at a short horizon like 5-7 years or longer? Are you wanting to learn the business as you go or are you looking to diversify and simply want passive properties? I'm asking because you mention possibly a duplex but would consider SFR. Duplexes are often found in parts of a city (though not always) where there is more of transient lifestyle. They also attract amore transient resident. In my experience, that leads to more turnovers and move time vacant. Personally, that is not what I want out of a long-term investment. I personally want long occupancy, low vacancy and residents that hav a higher probability of treating a rental property as their own. So, consider what kind of property you are looking for. If you want the possible higher income from a duplex, then any of the four major cities in Tennessee are going to have great opportunities and I would concentrate on university areas. Memphis, Nashville, Chattanooga and Knoxville all three have large universities near the city center areas and lots of opportunities with small multi-unit dwellings. These are perfect and perfectly located for students with one downside being that they will go vacant on a more consistent basis.

If you're looking for single-family, I like Memphis to most for the pricing compared to the value you can get and the residents.  Although, I am a big fan of all three of the other markets.  I think Nashville may be the most competitive and take the most time to find what you are looking for because the market is super hot right now with a lot of growth.  The suburbs are growing like wild-fire.  I think Chattanooga may be the most over-looked at this time but not for long and although Knoxville has the University of Tennessee and is well known, it also is over-looked from an investment standpoint.  You also have the tri-cities near Johnsonville in the northeast corner that offer stable residents and good opportunities.  

Spend some time charting the markets and speak to a few different investors in each area asking the pros and cons.  As in any city and any location there are always locals that can guide you to find what meets your criteria and risk level.  Feel free to reach out with questions specifically on west Tennessee, but I am confident that you can find the good in any of these cities even though there is bad and ugly in each as well.

Best to you -

 Have you considered Knoxville?  I-40 and I-75 cross the city, a large University, just outside of the Smokey Mountains, and Oak Ridge and TVA are not too far away.  Just a thought.

Hi Christie, 

I plan to raise rent annually, nothing too crazy (3-5%), to get it closer to market rate. 

But yes, if you are not comfortable with the negative cash flow, then don't even spend any more time on it. I find that it's too emotionally taxing trying to make certain property work. Since we are trying to run a marathon, I try to be really conscious with the effort I spent analyzing each property.

I do revisit my strategy after about a month or so. If it hasn't been successful, then I tweak it a little bit. I went from:

1. Wanting to invest out of state (in Detroit, Indiana, Chicago)

2. To looking for SFH to BRRR

3. To looking for SFH to ADU (need to add kitchen, bathroom, partition)

4. To eventually finding a duplex

Just gotta keep finding a strategy that works best for you. You got this!

@Christie Speciale
There is no such thing as a "guarantee" on any investment. I suggest never taking on a property that you think going in will have a negative cash flow. Especially if this is your first property, I guarantee everything will not go as planned. That is why you want positive cash flow and a reserve account. I personally have never done a STR, but I would run my numbers conservatively and be very cautious with a vacation rental going into a recession. Long term rentals will be more stable long term, but I understand the potential for more money in the STR. Just make sure you assess your risk just like you would for any decision. Good Luck

@Will Cruz

Hi Will,

I specialize in vacation home and STRs in Pinellas County. The beachy areas of Tampa Bay!! Depending on what you are looking to do, I find and analyze the property before even sending it you. I found 9 properties yesterday, ranging between 350-1.7 mill that all produced solid numbers. I look for properties that make more than 10% of their purchase price. So, 900k would gross over 90k a year or I don't even consider them. If you would like to chat, just let me know. I found an amazing property for 1.7 mill that would bring in 350k a year.