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All Forum Posts by: Jack Inman

Jack Inman has started 3 posts and replied 118 times.

Post: Memphis, TN Rental Income Taxes

Jack InmanPosted
  • Attorney
  • Memphis, Tn
  • Posts 130
  • Votes 104
Michael is right - no income tax in TN!

Post: Am I on the Right Track?

Jack InmanPosted
  • Attorney
  • Memphis, Tn
  • Posts 130
  • Votes 104

@Tanner Stell The other comments are right on the money - boarding houses are hard to manage for an out-of-state investor. If you want to stay below 50k then something like 5057 Longbranch may be worth considering. But, sub 50k properties are more likely to have problematic tenants.

Post: What can you tell me about investing in Memphis?

Jack InmanPosted
  • Attorney
  • Memphis, Tn
  • Posts 130
  • Votes 104

@Jackson Long Your first post is a little 'doom and gloom,' but there is a lot of truth and good advice.

These points that you made were spot on: Always good to double check any figures that are given out. If you don't check the comps then you very well may pay above market value for a house. Also, finding a good PM with good renovation contacts is paramount. 

 There are plenty of investors who do very well in Memphis (and from my understanding you're doing quite well yourself), but it is good to hear about the bad things that can and do happen. If proper due diligence isn't taken, then you're at the mercy of your ground crew. If one's ground crew is unethical or inexperienced then one's odds aren't good.

 
I know plenty of successful investors who have good luck right from the start, and most of that 'good luck' is due to choosing the right ground crew and completing one's due diligence.

Post: Newbie Rental investor interested in BRRRR

Jack InmanPosted
  • Attorney
  • Memphis, Tn
  • Posts 130
  • Votes 104

@Stephanie Simon Welcome to BP! 

BRRRR is a great strategy, but it can be difficult to manage, especially from afar. If this is your first rental then it may make sense to use a conventional loan to buy a property. Buying with an occupied property with a conventional loan can still offer great returns with far less involvement than a BRRRR purchase.

If you wanted to pursue the BRRRR strategy then you'd probably have to get a hard money loan to buy the house; so, step one would be to find a suitable lender for the acquisition. If you know a solid team in the area that you're looking to invest in then it may make sense to go for it. But if not, then finding, or building, a ground team would be the next step. Local property managers would be a great source of info for quality contractors, good realtors, lenders etc..

Post: Small niches in the real estate game to make money

Jack InmanPosted
  • Attorney
  • Memphis, Tn
  • Posts 130
  • Votes 104

@Justin Schiller If you're willing to do the legwork to find good deals then it shouldn't be too hard to find partners to finance the deals. I know several guys who got started that way.

Post: Appraisal

Jack InmanPosted
  • Attorney
  • Memphis, Tn
  • Posts 130
  • Votes 104

@Bradyn Melser From what I've seen, they'll be looking at comparable sales more than rental income. That may depend on the lender, but the one's I've worked with place far more emphasis on the comps than on cap rates.  

@Arden Ballard There's probably a better way, but what I would do is calculate the total cost of the LOC and add that to the closing costs.

Post: OOS investing in the Memphis area

Jack InmanPosted
  • Attorney
  • Memphis, Tn
  • Posts 130
  • Votes 104

For that price range I'd recommend looking in 38111, 38118, 38115, 38116, and 38128. Just make sure you look at nearby comps to ensure that you aren't paying over market value. Memphis is a great city to invest in; I've seen plenty of OOS investors do quite well. Just make sure you research the comparable sales and rentals!

Post: Refi within BRRRR strategy using all cash for initial purchase

Jack InmanPosted
  • Attorney
  • Memphis, Tn
  • Posts 130
  • Votes 104

@Ted Tronnes  Generally speaking a bank will have similar requirements for a refinance as it would with conventional loan on the front end. A smaller, local bank may be less rigid with regards to income requirements. It seems that larger banks are stricter on income requirements while smaller banks may be more flexible if you have net worth.

Post: BRRR - Really a viable investment?

Jack InmanPosted
  • Attorney
  • Memphis, Tn
  • Posts 130
  • Votes 104

@Anthony Torres If your options are to buy a fully rehabbed house or to do a BRRR deal, then you cash flow should be roughly the same assuming the rental rate and loan amounts are similar. However, your cash-on-cash return should be higher with a BRRRR than with a conventional purchase of a similar property.

Going back to the hypothetical scenario, If you've left only 15k in the property, then you've cut your investment by half when compared to a conventional down payment of 30k. By reducing your investment by half you've doubled your cash-on-cash return.