Exit strategy for 2nd property

[Denise Frazier]

I bought my second rental, one county over in Knoxville TN. It was for $65K. I was going to BRRR it. It needed all the main systems replaced Electric Plumbing and HVAC. I had the inspection done, and the house was sound, but needed updating and would rent for $900 once done. My contractors don't want to work in Knoxville because the permit process is very difficult and over the top. i.e. my structural engineer says they require double the national standard on some of his items. So I've decided to get out of Knoxville. Clean the property up make it pretty and through it back on the market. I have 5 contractors I've worked with and none want to work in Knoxville. I ran my numbers and the ARV is $129K had my agent run them and she came up with the same thing. My question: Is this the best strategy given the situation?

[Nick Cantey]

@Denise Frazier

I’m a residential contractor, real estate agent, and investor that lives in Knoxville. I can tell you without a doubt that what your structural is telling you is in correct. Knoxville is actually quite lackadaisical when it comes to the codes. The only thing they are sticklers on right now is the energy code. They are full boar on that right now. Outside of that...as long as you’ve done your due diligence and don’t plan on putting a subpar product out there then you should be fine.

In regards to your contractors, they might not want to work in Knoxville because Knoxville requires that you also be certified and carry a Knoxville license on some infrastructure categories.

Anyone that is in an adjoining county that doesn’t have a Knoxville license is missing out on a ton of business right now.

Subcontractors and contractors are booked solid in Knoxville right now. Due to how hot the market it is, and in some cases over a year or more.

Please let me know if you have any other questions or concerns I can help you with regarding Knoxville. I work with investors almost exclusively when it comes to the real estate side of things, and my investors can’t find enough properties in Knoxville. They’re acting to get into this market with how many jobs and solid stability Knoxville has as a whole, plus not mention our entires state university being here in the University of Tennessee Knoxville.