All Forum Posts by: Cole Welch

I am a novice investor with only a couple projects under my belt.  I grew up here in Nashville and believe it will continue to grow.  If you're looking for more cash flow, it may make sense to go to the Nashville adjacent markets (Murfreesboro, Clarksville, etc.) that are still benefiting from Nashville's boom, but have more reasonable prices.  I own one rental in Clarksville along with a couple partners and am actively looking for more.  It has appreciated well in the 2 years we've had it and rents continue to go higher than we initially planned for.  Clarksville is close enough to Nashville for jobs, a night out, etc. and also has the military base there.  It is a strong rental market with a lot of solid tenants.

Thank you for this post Axel!  My brother and I are looking to get started, and I love the strategy you've laid out.  It is similar to what we are looking to accomplish.  We're hoping to get our first property soon and learn as much as possible.  I love these posts as they provide a needed adrenaline shot.

@Luke Pierce I have not looked that much into rehabbing yet. I would love to get a property in negotiations and have a GC walk it with me to point out needed updates. It is definitely an area I want to learn more and more about. The most consistent message I've heard on BP is to not "over-rehab". The pros that come on the podcasts have a simple formula that works and they execute it efficiently.

Hi Luke,

I'm in a similar boat of looking at a small multifamily (2-4 units) in the Nashville area.  I really like the amount of detail you put in this post.  I would echo Brent and caution against using overly optimistic rent estimates/ARVs.  When looking at properties, I've been trying to keep myself more towards the average rent in an area.  I know the numbers aren't as exciting that way, but I think it will help you pass on some shakier properties.  You could also reach out to some contractors with your estimates and they can tell you how close you got.  Really hope you find a great deal!

When using the BP calculators, how do you decide on your Annual Income Growth % (rent) and Annual Expense Growth % inputs?  Do you set them as the same % or different?  I'm skeptical of steady rental increases for 30 years.  For example, a 2/1 apartment in a small multifamily may rent for $750 in 2018.  At a 3%/yr increase, that will go to about $1,800 by 2048.  Is that a realistic expectation on future rents?  I'm using 3% based on inflation percentage which is usually between 2-4% I believe.  My assumption is that you would need your rental income to at least keep pace with the inflation as this will likely drive your expense percentage increase.  Thank you in advance for any insights provided!

Thanks to everyone for the feedback.  Really appreciate the community BP provides!

@Anthony Wick  Thanks!  That makes sense.  I will start running the numbers with and without my unit occupied and see where I land.

@Antoine Martel I appreciate the feedback.  I will keep searching for deals with more wiggle room and options to help ensure expenses are covered.

What are investors' thoughts on cash flowing a house hack? I have been attempting to analyze duplexes, triplexes, and quads. Should my goal be to simply cover the mortgage plus a little extra, or should I be looking to cash flow something after all expenses (CapEx, repairs, vacancy, my utilities, etc.) are considered? I am having trouble finding a way to cash flow as I would theoretically be losing out on the rent of one unit (mine). I may try to AirBnB a spare room should that opportunity arise, but I'm really interested in hearing how others have handled the analysis on the front end to make sure the deal accomplishes the goal of "living for free and becoming level one Financially Independent". Thanks in advance for insights provided!

Hey Caleb, 

I am new as well and still looking to land my first deal.  Based on what I've read, you still want to factor in your cost for property management.  This may be why your deals all look to be so positive.  Even if you do the PM yourself, you would still want to factor in around 10% I have heard as you will not always be managing the property once you grow into more properties.  Just a thought.  Hope everything works out and good luck!

I will check out the video and the blog! 

@Slocomb Reed Understood.  One of the main reasons I posted this was to hear advice like this as I am unfamiliar with the Cincinnati layout.  I will keep analyzing deals to learn more about the area.  Thanks again!