All Forum Posts by: Tom Shepard

wondering if anybody has experience buying property from or getting property management from MikeButler.com?

Bought his book, liked it a lot, tons of recommendations for it on BP.  Signed up for his email news in order to get his free forms which were helpful.  

Got an email yesterday with a property for sale. I'm not terribly keen on investing out of state, but it seemed like a good deal. $64900 cash only. 3/1 All brick SFR. Advertised as "rent ready" Monthly figures: Rent $899, ins $40, tax $70, PM $90, repairs $90 gives $609 monthly cash flow, 11% ROI year one. They include tenant finder service, 6 mo PM, and a few other tools they provide from their PM business.

Our goal is to acquire 10 properties in the next 7 years that cash flow at least $500 each when paid off.  HOWEVER this seems too easy...

Anyone ever bought/managed a property with them?

welcome @Joseph Stricker !

Love Chattanooga!  

Have two daughters at UTC and bought our first investment property there, a downtown condo!  Paid too much, but it's hard to pay too much for a perfect location!  Posted it on CL and Postlet and got 12 inquiries in 10 days!  Chattanooga is a great town.

Welcome @Marcos Flores!

Great place to live (Nashville!) 

Great place to learn and cut your teeth on RE investing (Bigger Pockets!)

Lots of Nashville folks on here.  Connect with any of us, follow a few and start working your way through listening to the podcasts to start your education!  There are 115 podcasts of about 1 hour each that are fantastic!

I'd recommend you start with podcast 101, it's about an Agent who became a profitable landlord!  Could be you some day!

Seriously-- reach out here or directly to anyone on here, their all great!

Thanks guys-- will take all under advisement in making our decision!  Appreciate your responses!

Hey BP! Need help making a decision:

Bought a condo across the street from a university in Tennessee mainly for my daughter to live in and "house hack" in the fall semester.

We listed it for Summer Lease Only and have gotten about 10 inquiries, all but 1 wanting a years lease and every single person that we have had contact with asked if we would let them know if we have anything else open up there (I guess they are assuming we are a big company).  

In the mean time an identical condo has come up for sale in the same building.  Which would require minor "make ready" repairs and could be ready by May 1 for rent.

Won't bore you will ALL the numbers, but the first condo was a cash purchase. Cash flow = $550/mo after HOA, Tax, Ins, CapEx, repairs, and PM (we are self-managing, but want to include this for later). Did not figure vacancy...I know...I know...but two other owners (from the HOA board) said they both have waiting lists for their condos.

To buy the 2nd condo, we would take out a small mortgage on both, ending up with approx. $200 cashflow from each. To cope with some initial vacancy during the "make ready" we are able to pay PITI and expenses from our day jobs without killing ourselves if needed for a time.

Seems pretty good, BUT my reservations are:

-- We would be making less cashflow with the two, have twice the potential headaches and have to worry about getting two sets of tennants.

-- We would own two condos in the same building.  IF a special assessment came, we would be on the hook for twice the assessment.

Would appreciate any advice!

I would use the 10% cap on the current NOI, but you still have to crib the numbers like @aaron montague did an awesome job of above. But don't forget, you currently have almost a 40% vacancy in rent $ from 100% occupancy. Make sure you have some cash reserves if your numbers work out tight using 10% vacancy. And a string marketing plan to get them filled fast with well screened tenants!

@Micah Copeland

 Absolutely would go for a higher cap rate in a more difficult area.  1/1 and 2/1 are also likely to attract a shorter term tenant than larger units so keep turnover in mind.  

Is she going to stay and rent her apartment or move? If she moves that gives you only 9 of 14 rented. IF you calculate vacancy based on income, she is currently only collecting 61.5% of the potential...big opportunity for you to improve NOI but you should calculate offer based on current occupancy/NOI only. I doubt that she is marketing very well from the sounds of it.

Hoping you got her actual expense numbers. Just glancing over them it looks like the sewer could be a little light. SFR with Metro Water Services are $20-40 per month (bigger houses than this I realize), but I would think it might be more for 14 units than what is shown there. IF you got actual numbers from MWS then good for you!

Lastly, dealing with her current tenants could be interesting.  I would recommend Mike Butler's "Landlording on Autopilot", specifically chapter 18 which deals with inherited tenants, both one's you want to keep and one's you want out NOW.

Good luck to you, and keep us posted on how it goes.  Will make an interesting story either way!

@Steve Vaughan is totally right.  Exactly why I said you may have to get out of the big fun exciting city in order to find some deals.  In rural TN prices have not reflected the "Nashville Effect" especially if you get more than a county away.  Good luck to you!

@Devan Mcclish

 -- so right.  This is from Trulia.com as posted on the TNREIA website by Doug Betty:

The median sales price for homes in Nashville TN for Oct 14 to Jan 15 was $205,000. This represents an increase of 1.5%, or $3,000, compared to the prior quarter and an increase of 8% compared to the prior year. Sales prices have appreciated 28.2% over the last 5 years in Nashville. The average listing price for Nashville homes for sale on Trulia was $504,199 for the week ending Jan 14, which represents an increase of 0.8%, or $3,883, compared to the prior week and an increase of 2.1%, or $10,381, compared to the week ending Dec 24. Average price per square foot for Nashville TN was $155, an increase of 12.3% compared to the same period last year. Popular neighborhoods in Nashville include Inglewood, West Meade, Urbandale Nations, Bordeaux Area, Hillsboro West End, and Bellshire Terrace.

A little scary as a Nashville investor, but you can still find deals...just need to dig for them as @J Scott and others have said deals won't fall into your lap, but you can still find them!  May have to look outside of the big, fun, exciting city...

@Micah Copeland I totally agree. I think East Nashville trends would support the SFR...IF it was a SFR before and was converted to a quad, so the flow and layout COULD make sense again as I'm sure it did before. If it was built as a quad you would likely have a lot more Reno costs and have to do a lot of rearranging to make good flow, etc. I'm guessing with the electric and water situation it likely was a previous SFR that was carved up. Good luck!