All Forum Posts by: Cory King

Personally off the cuff, probably invest in local new construction and BRR (build, rent, refinance) those to hold long term. 

Some follow up questions. Very broad and if this helps you get clarity then aweseome.

1. What type of property and where would you leverage this toward, Single Family, Multi Family, Commercial, Mixed Use, Land...?

2. What's your risk tolerance at this point, playing more aggressively or preservation?

3. And what amount of leverage are you comfortable with?

4. Have you explored REITs or DST?

That's enough cons for me to not do it. What attracts you to it, just the price? How'd you pick that market? Where are you managing it from? Is anyone helping you underwrite these or are you doing it all yourself?

Market in a Minute

• East Tennessee home sales decreased 7.8% from the previous month, and decreased 1.0% from a year ago.
• The median sale price was $371,250 — up 9.19% from the previous year.
• Total housing inventory increased from the previous year – up 38.3% from a year ago.
• Half of the homes sold were under contract in 20 days or less, up from 11 days a year ago.
• 40.55% of homes sold for the asking price or above, with 18.77% selling for more than the asking price. 8.04% sold for at least $10,000 over asking and 2.88% sold for at least $25,000 over asking price.
• The sale-to-list price ratio decreased from last month to 97.5% – down from 97.9% a year ago.
• New construction represented 12.36% of total home sales

Data Deep Dive: How's the market?

We've seen our area MLS which covers about 20 counties come down to an average sold to list price ratio of 95.1% and Knox county specifically has come to 96.4 % which is lower by about 2% from this time last year and down from our peak this year of 98.5%. but it's about in line from winter 2022 into spring 2023 which was a time when rates were rapidly rising. In the last year for Knox county specifically the median sale price is up 9.92% and the whole MLS is up 7.14% year over year.

After beginning to recover in July and August, home sales throughout the East Tennessee region slowed up again in September which is somewhat expected as schools get back into swing.

Mortgage rates remained below 7% for the entirety of September, for the fourth month in a row. However, rates did rise back up from the recent low of 6.08%.

The inventory was 38.3% higher than this time last year and is increasing month over month. We're now dancing around the 6000 total single family homes available which swings up as the weekends approach and new homes hit the market and retract below 6000 homes after the weekend and homes go under contract.

There was a 3.2% increase in active listings from August to September, slightly lower than the June to July increase. The median sale price increased month over month breaking the trend of decreasing median sale price the past two months.

The rental market continued to moderate in Q3 2024 thanks in part to the increase in units being built. 1,815 units were completed in the year ending with Q3 2024 with 1,447 expected to be completed in the next four quarters.

These new units brought online in the past year increased the overall inventory by 3.4%, however by Q3 2025 we anticipate demand to outpace supply by over 550 units.

With this increase in units over the past year we have seen the occupancy rate moderate at 95.8%, down from the high of 98.9% in 2022. However, due to the anticipated gap in necessary units we anticipate the occupancy rate will increase slightly in the future.

If you're a buyer right now what all this is telling me is right now is the time to be taking swings while things are cool and before they heat back up literally and figuratively. Take 5-10% off anything that looks interesting and fire away because sellers are taking them and competition is down during this time of year

Happy to chat about Knoxville. I have a buddy locally from Indy who's wholesaling up there. I can help connect you. I'm an investor here. The BRRRR method is tricky here as we've had some of the highest appreciation in the US over the last 5 years. It's not impossible to find, but you may not recover ALL your cash in the refi and may have to wait an added 1-2 years to get it all out.

I had a historic property that I put around $110k into it (all in $290k). It first appraised for $330k which I challenged as I had better comps, but it's rare to win one. I could only refi $245k at the time. In process of doing a cash out refi on it now, 1 year later, and it appraised for $400k so I'm recouping my cash now and will build on the lot next door starting next year. 

Congrats on going for your first property! Especially being a duplex! My opinion, a rate a buy down isn't usually worth the trade offs vs keeping the cash in hand. Especially if you anticipate making any repairs or value add pieces. You can roll the cost of refi into the refinance itself which will limit what cash you pull out. 

If financial freedom is the goal, can some of that $4400 go towards an extra payment each year for a few years? Thus paying it off faster. 

Personally I limit any refinances unless there's something bigger I can do with the cash. I'm working to pay off my rentals which will dramatically increase my cashflow in a faster time. I have some properties on low rates 2-3% range which I'm in no rush to pay off. The others I'm buying the principal down asap. 

I'm in Knoxville too! Awesome market. 

Welcome! I'm in Knoxville too. 

Rich Dad Poor Dad by Robert Kiyosaki. (this will help with mindset around investing)

Tax-Free Wealth by Tom Wheelwright, CPA. (this will help you keep your money)

Profit First, by Michal Michalowitz (this will help you organize your money)

The Millionaire Real Estate Investor by Gary Keller. (this covers a lot of ground and serves as a nice framework)

I'd echo what @Gino Barbaro mentioned above. If you can swing the dirt cash, it can be used as leverage towards your new build. 

Do you care about any current cash flow from your triplex as it is or are you ok with say doing a refi on it to free up the cash but your cashflow drops because of it. 

You should definitely talk with a commercial lender in the area, I'm in Knoxville and built new so I'm happy to connect directly to my bankers. We also host a meetup locally w/ a massive network to pool from. 

What @Robert Rixer said in terms of cost to build isn't un realistic for our area depending on level of finish and any improvements needed to the dirt. We have soil made up of mostly clay, rock, and some sand so digging footers or basement of any kind can dramatically drive up costs. Worth investing in the soil sample on the front end. 

I'm building a small multi next year on a lot I own next to another rental locally. Happy to connect 

Market in a Minute

• East Tennessee home sales increased 5.2% from the previous month, and increased 9.3% from a year ago.
• The median sale price was $374,950 — up 7.13% from the previous year.
• Total housing inventory increased from the previous year – up 43.2% from a year ago.
• Half of the homes sold were under contract in 15 days or less, up from 9 days a year ago.
• 44.61% of homes sold for the asking price or above, with 23.72% selling for more than the asking price. 10.32% sold for at least $10,000 over asking and 4% sold for at least $25,000 over asking.
• The sale-to-list price ratio decreased from last month to 98% – down from 98.6% a year ago.
• New construction represented 13.28% of total home sales.

If you want to nerd out on the market here I'm always happy to chat. Hope this helps keep a finger on the pulse here.

i'm a buyer in the area

What kind of business do you want to have? meaning, do you want to be a traditional real estate business representing retail buyers/sellers? only work on your own investments? a hybrid?