All Forum Posts by: Jeffrey Holst

@Bryan Venable

I think its very hard to start out at a distance.  I did that way but I had the benefit of a trusted local partner.  So If I were you I'd focus on finding and making connections.  It might also be sensible to handle at least a few deals nearish to you.  as @Brandon Turner always says on the podcast there are great markets within a couple hours of everywhere.  (that is a paraphrase).  

I think once you have done a few deals its easier to understand what you are looking for. All that being said if I were forced to pick a market for BRRRR I'd say Chattanooga TN mainly because it has worked well for me here and because it happens to be in the price range you are suggesting.

Good luck

The starting point is understanding the prevailing local cap rate.  And making sure you know how to manage a property like this one.    

In truth I think if you have no experience you will be unable to finance this deal.  Banks tend to want to see that you have relevant experience.  What you need to do if you want to do this deal is find someone who has done some multifamily deals preferably in this same general market and partner with them.  Learn from them and in the future you will be able to pull off deals based on your new experience.  

I do wish you luck though

Thats a tough one to crack.  Be very careful as a newbie.  You need to get estimates and assume you will go over budget by a lot.  And you need to do a rent survey to figure out what kind of rents you can get in this bad neighborhood.  Personally I dont think this is a good first property for anyone but if you do it be care and good luck

 You wouldn't be the first Nashville investor to make the drive down for our informal meeting up.  You might even be able to car pool if you keep a look out.

We have an investor meet up about once a month and there is also a monthly reia meeting which happens to be tonight. 

http://chattanoogareia.com/

The meet up was recently so watch out for that in a few weeks.  The reia is fine but it's a little bit of a sales pitch and costs 15 dollars for non members.

In this market it will be hard to find stuff with 8+ cap rates. You might see some listed like that but when you dig in the numbers are lower.  To get an 8 cap or better will require some real digging probably need to be off market or have some hair on the deal that makes it less attractive.  

 Nice.  Keep it up.  

 What's going on there? Are there good management companies? What kind of returns do we expect?

 There are several on the mls currently that meet this statement in Chatt and I have bought 4 in last 10 months with average purchase price of 90k and rents between 550 and 625 a side.

@Dan Oconnell

Its more of a philosophy issue than a question of which is better.  You will find people here that will argue both sides of this.  My wisdom on this (if you can call it that) is to take a hard look at all your numbers.  What will it cost for cap ex, management (when you grow and want this), regular maintenance, taxes and insurance (if not in mortgage) vacancy allowance, eviction costs, turn around costs to make the units rerentable.  A lot of this is speculative of course but make educated guesses and if after all that you still have significant cash flow then start looking at you options for refinancing and see if there are good rates available, and terms available (it is possible your current loan is better than anything you can get now that you have it as a rental and since rates have trended upward)  In the end this is a numbers game.  If you cant refi my bet would be to pile up the cash in a separate account so that you can build up a nice down payment for another duplex.  You will likely need 20% down on your next deal.  If you can pull equity out and the numbers still look good that will get you there a little faster but always make sure you have a safety margin