All Forum Posts by: Greg Scully

@Andrew Moullin - My focus is Chattanooga, Knoxville and the Tri Cities area.  We're actively looking to buy apartments in all of those markets. We also flip in Knoxville and Tri Cities.  I'd be happy to get on a call if you want to talk more about any of those markets.  PM or shoot me an email, I'm happy to help.

@Andrew Moullin - Chattanooga is a good market. We're part of a group that owns 41 units in East Ridge.  Like @Brian Levredge mentioned, there is a significant amount of new inventory coming on line and the vacancy rates for those type of assets have increased, although older working class housing still has low vacancy.  The inventory seems to be tight overall and the numbers are hard to work for investing.  I'd look into those meetups and start making connections.

@Vlad Denisov - You can usually find out the cost of utilities directly from the utility provider.  We've had good luck with that here in Tennessee.  Usually they just give it to us over the phone.  Misc income is late fees, application fees, pet rent, etc.  I've heard everyting from 2-3% all the way up to 10% of gross rents as a rule of thumb.  I've also heard $200-400 per unit per year.  On our property in Chattanooga the past couple of months it's been pushing 15%...lots of late fees.

@Barri Griffiths - Using the current owner as the manager seems like  a bad idea to me.  Assuming they will be compensated - why not switch to a 3rd party manager?  A professional manager will be able to help with budgeting, rehabs, turnover, marketing etc.

Be there for the inspection if possible. You tend to get all kinds of information from tenants.

@Vlad Denisov - Are you talking about income from charging back utilities to the tenants?

@Shakir Evans- If it's under four units (residential) you may have trouble getting a loan under a LLC. Check with your lender.

@Jeffrey Grieshop - Keep in mind that duplexes and triplexes are considered residential property.  Residential values are determined more by sales comps than Cap Rates.  You may look at Cap Rates for your own evaluation, but the market will look at the property value through a comparative analysis.

@Immanuel Sibero - You determine the Cap Rate by researching the specific market.  Talking to brokers, other investors, lenders.  The Cap Rate can vary significantly by market and class of property.

@Matt Watson - Are you self managing?  If so it will add another layer of complexity, otherwise there are plenty of third party section 8 managers out there.  

@Account Closed - We requested a schedule E and occasionally get it.  You are correct, expenses reported on a Schedule E may be significantly different than a P&L.