Nashville REIN meeting

[Luka Milicevic]

Hello fellow Nashville investors!

If you were at last nights REIN meeting-good for you! It was the best main meeting I have attended. I took a bunch of notes and wanted to share with everyone that couldn't attend.

If you were there last night, please chip in and correct me if I am wrong on any of the below points....

Guest speakers were Melinda Bailey from Franklin Synergy and Yogi Dougher (We all know Yogi)

A couple of things from the lending standpoint:

Melinda mentioned that the number one thing they are looking to lend on right now is warehouses because the demand is so high at the moment. That just means that is their most sought after lending if you will, but she did say they will lend "all day long" on rentals and urban infill development. What I thought was interesting on infill development that Melinda mentioned was that your purchase price is the value of the property. Meaning there is no appraisal/valuation the bank will put on it because they don't want to allow you to pull out ridiculous amounts of money from a vacant lot. If you bought a lot on 2nd Ave for $5k in 1980 the value of the lot (to the bank) is $5k. I believe this is due in part to Dodd-Frank. 

The amount of supply on apartment complexes has started to exceed demand, especially luxury apts. Banks have started to reduce lending on construction of apt complexes as a result and they have exceeded their lending capabilities per capital requirements. Melinda did say you can still get loans for these but they are not as "easy" as they were before. 

Your community banks actually, genuinely look into the deals you send them. They will do their research on area, zip code, development in that area, etc. The better you can present the deal to them, the better your chances are of getting a loan. They shouldn't have to ask you for anything, you should send all required info before they even ask. Yogi said that he would not lend to someone that doesn't have all of their proverbial ducks in a row! He even mentioned that sending in a power-point presentation of your project sure does help! 

With all of the new development going on in the Nashville area, something to think about that I haven't heard of until last night is a construction to perm loan. This is where you keep the property after construction without having to refi to a conventional loan. It might only be available if you intend to owner occupy. If you're sitting on a lot at the moment and want to live in that area-this is something you will definitely want to look into!

A couple of things on the Nashville market:

The main point I took home was the issue of affordability in the Nashville market and I really started paying attention to what Yogi had to say once he started talking about the future of the local market. He said this is just his opinion "sitting in the cheap seats" (Yogi being humble). In terms of the current trends he thinks Nashville has a "long long" way to go. We will see bumps in the road along the way but over the next 20 years the city will continue to grow. All of the folks losing jobs in the northern cities are moving down the southern corridor as he called it. He mentioned a study done by Vanderbilt saying that the actual number of people moving to Middle TN is probably closer to 101 (net), vs a previous estimate by a business journal that had the number around 85. Keep in mind that not everyone moving here can afford the 400k+ homes that are being built which goes back to the main concern about affordability. 

These are all the notes I took last night. I'm sure I left off some important points and probably didn't report everything exactly as it was said so PLEASE feel free to chip in.