All Forum Posts by: John Tilstra

@Chase Spitzer, I hope you decide to get into the Chattanooga market.  It's a fantastic city, and a very interesting place to invest.

My wife and I actually live overseas, so we invest (buy/hold) from a distance.  We work with @Thomas DeMoss as our realtor, and he does a great job, which says a lot since we're not in the country.  He's an investor himself, and has a pretty good read on the market.

If you're looking for a property manager, I don't think you can do better than First Property Management (http://firstpmusa.com/).  They manage our properties and are excellent.  Check out their website and give Brian Levredge a call if you want to chat with him about the market as well.  He's a fellow investor also.

Also, if you are interested in a host, I have some friends who have an airbnb on the southside if you want to chat with them.  They'd be happy to show you a couple of the cool spots downtown.

@Thomas DeMoss can chat with you more about local lenders.  He's recommended FSG Bank, which I tend to agree with.  You could also talk to SunTrust, although they're bigger but are pretty good and localized to the Southeast.

Good Luck!

@Katherine Earle, my wife and I live in the Middle East and so we invest remotely in the Chattanooga, TN market... however, we shy away from major renovation projects for the very same reasons folks have mentioned in this post.  I've heard of it being done, but generally with a local partner to manage contractors.  Ultimately, somebody is going to have to be physically present at the property to manage a rehab/flip.  Ideally it would be you, alternatively it could be a local partner, or potentially it could be a trusted member of the team you build wherever you decide to invest.  

Every flip is going to present its own unique challenges, and if this is your first one, I think conventional wisdom would encourage you to try and avoid doing it remotely.  That said, if you decide to go forward, make sure to double down on the fundamentals: understand your market, analyze a TON of potential deals before you buy, build a really strong team, and then think creatively on how you can work remotely.  

Good Luck!

Nina,

I'll give you the philosophical answer, and then provide an excellent link for the mathematical response.

Ultimately, paying cash or leveraging to buy more properties is a win-win choice.  What's best for you depends largely on how actively you want to manage your real estate portfolio and where you are life-stage.  If you're reaching financial independence and you don't want have to actively manage a growing real estate portfolio, there's a good case to be made for buying a low-maintenance property with cash and using the higher cash flow (since you have no mortgage) to finance your early retirement desires.  For folks on the cusp of retirement who don't want to manage or grow a real estate portfolio, this works well.

However, for wealth growth and cash-on-cash return, there is no question that it makes far more sense to leverage yourself.  Much ink has been spilled describing the financial advantages of leverage, so I'll just offer a link to a Mr. Money Mustache blog that lays it out pretty clearly.

http://www.mrmoneymustache.com/2012/02/24/pay-down...

Hope you find what's right for you!

Great questions @Patrick Camuso, and welcome to more active participation on BP! Chattanooga (and the surrounding communities like Cleveland, Ringgold, Collegedale, etc.) is a great place to invest, and just a great place to live in general, so we'll be glad to get you down here in a year or so to begin investing! Definitely leverage BP to get a running start on understanding the market and your options. I think house-hacking at the beginning is a great idea. You could probably even afford to house hack AND do a single fix-and-flip since you could likely buy a small duplex and live in one side for just 3.5% down, thereby saving your capital for your fixer. Maybe also consider connecting with a local realtor (there are several good ones on BP) and have them set up an MLS portal for you so that you can be seeing properties that might fit your fix-and-flip criteria, and your house hacking options. That way you have an idea of what the market looks like by the time you're ready to buy. Good luck and stay in touch!

Quick question for my fellow BP REI folks in Chattanooga, TN!

We are doing our due diligence on a duplex we're under contract to purchase in Chattanooga (Brainard), TN.  The most recent tax assessment/appraisal was in 2015, and noted the property was a duplex, but categorized it as "residential" property.  This means taxes are assessed on 25% of the property's appraised value.  (i.e. property appraises for $100k, you're taxed on $25k at country/city rates of 2.3/2.8%, and total taxes of $1279.)

However, according to the Hamilton Country tax assessor website states, "Industrial and Commercial Property assessed at 40 percent of value, and includes residential buildings with two or more rental units."

So, wouldn't this definition imply that duplexes should be assessed as commercial property and therefore be subject to paying taxes on 40% their appraised value?  If so, why was the duplex we're looking at categorized in 2015 as a residential vice commercial property?  (In 2015, both units were occupied, neither by the owner.)  

The difference in annual taxes is significant (about $750), so I'd love to plumb the depths of the collective BP brain.

Thanks in advance, and if you're in Chattanooga, hopefully we'll get to see you when we're back in the States this summer. 

@Derek Kitamura, welcome to BP!  You've found a good group of investors in Chattanooga, and we're glad to have you join our ranks.  Reach out anytime with questions as you get familiarized.

@Mike Fuller, you know, we try to stay out of North Chatt and South Side.  I love those areas for living, but it's tough to make the numbers work with all the crazy growth in prices.  We have places in East Ridge, which is a solid B-/C+ area, and we also have a place out in Harrison.  We're currently looking in Highland Park, East Ridge, and Red Bank.

Mike, welcome to BP, or at least to posting on BP.  My wife and I own a couple of duplexes in Chattanooga and are looking for our third multi-family as we speak.  Let me know if you have any questions about realtors, financing, insurance brokers, etc.  We're living out of the area until this summer, but happy to dialogue with you through BP.  Welcome!

Thanks #John Santero.  I appreciate the follow up!  If I call Angie, I'll definitely mention your referral.  Much appreciated.

BP,

I'm looking for a new realtor in Chattanooga, TN or north Georgia.  I already own some property in St. Elmo, and a couple of duplexes in Chattanooga, and I've worked with a local realtor, but my wife and I live overseas, so the challenge of managing the timely remote communication necessary for us to participate in the real estate market in Chattanooga requires a realtor who understands the investor mindset, is really responsive, is tech savvy, has a little investment experience, understands the market, and offers one-on-one support.  Since we live abroad, we're looking for more turn-key properties.  I know we pay more of a premium for these, but we'd still like to get the best deals we can.  If you a realtor who you think would be a good match, please send me a recommendation. 

Thanks!