Tennessee Investors: Favorite area for low-cost rentals?

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Hey Allen. Just out of curiosity why that price point and why no loan?I'm assuming you are going to manage it yourself? If so, I'd recommend buying one close by as first priority on location. Personally we have a rental that appraises for 45K. We wouldn't buy it again because we can't get a mortgage on it. That is a lot of cash tied up in a property that we could have used for other investments especially now with the interests rates still relatively low. My 5 cents. :)Best of luck!

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@James Wachob: Great points. That's what has attracted me so much to turn key for my first purchase. I sent you a PM with some follow up questions. Would love your feedback if you get a sec!

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For that price I would look at smaller areas surrounding a bigger city like Jackson. You want good tenants who commute to good jobs like P&G, Delta, or others. My brother lives in Jackson, it has its rough areas. I bought a HUD house at auction in Waverly (where I live) for $37,000. We turned it into a 4 bedroom instead of 3. It appraised for $70,000. I'll borrow $55,000 against it to pay off my Line of Credit and have a down payment for an auction I'm going to. My rent is $675/month while my loan at 4.75% for 20 years is $355. Look in the rural areas along I-40. People are moving out of Nashville because of the higher rents. My 1st tenants moved from Dickson because on SS and they could not afford Dickson rents and came to Waverly.

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I have invested in Jackson and so far so good (only bought 12 months ago) but i think you need to do some more research surrounding debt and also the economies of scale that accompany debt when it comes to real estate. Simply put replacing the dishwasher or AC unit in a property yielding $600/month versus one yielding $100/month costs the same in dollars for each but is a larger percentage of rent in the cheaper property. It is healthy to be afraid of debt of the consumer variety, but in investing, done correctly, leverage is your friend.

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Jackson is a perfect place to invest. However, I don't have a team to help me and this is the key to investing from afar. An all-star team is very important when you are owning properties in a city you do not live in.If you are not there to see each property in person... there are several factors to consider.1. Acquisitions team - a seasoned vet who knows the area can be an extremely valuable asset to an absentee investor2. Renovation crew - I prefer to use employees for all renovations vs. subcontractors. This saves time, money and offers better quality3. Management team - A top-notch property manager can make or break an investment4. Investment Broker - As an exit strategy, I need and Broker with connections, in case I ever need to sell. Ideally, I would like for my "team" to have all of these positions, firing on all cylinders, under one roof. NOT piece-milled together...

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@Allen Harris - Glad to help. It's in Memphis. Rented for $750. long-term tenant and we have a management company for it. It's been a great purchase for us.

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You could check out At Home Realty in Ashland City. They are a HUD dealer. I worked with Michelle Zazworsky and she did great.Michelle Zazworsky Associate BrokerAt Home Realty124 North Main StreetAshland City, TN 37015

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@Chad P.: Thanks for the feedback. I agree on wanting good tenants! I'm not familiar with Waverly, but I'll check it out. Sounds like you have a winner! Hope your next auction treats you right!

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@Eoin Maher would you recommend a local property manager?I'm looking for someone who could offer all 4 components I need to buy on a large scale:1. Acquisitions team - a seasoned vet who knows the area can be an extremely valuable asset to an absentee investor2. Renovation crew - I prefer to use employees for all renovations vs. subcontractors. This saves time, money and offers better quality3. Management team - A top-notch property manager can make or break an investment4. Investment Broker - As an exit strategy, I need and Broker with connections, in case I ever need to sell.

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@James Wachob: Thanks for the reply and offer to help. I spent some more time looking at some homes for sale in Jackson, many of which appear to be bank-owned. The prices are great, but I don't know the area at all as a rental market. Any insight into Jackson? I'd honestly prefer turnkey, but I'm not sure about Memphis in my price range. Any insight there would be awesome, too. Thanks!