New to Forum / Nashville / Looking for other Markets

[James Perkins]

Hi everyone, long time listener, first time poster. I've spent the past few years listening to hundreds of BP podcasts, now It's great to be in the forums as well.

To introduce myself - I'm located in Nashville and started investing with my girlfriend in 2018 when we purchased our first property. Since then, we've purchased 3 more for a total of 4 units (2 condos and 2 townhomes). We've learned a good chunk and are still hungry to learn more. I work a W2 job and my dream/goal is to be able to transition out of this job soon and pursue RE investing on a more full time basis.

The cashflow dynamics on our existing properties leave a lot to be desired. As novice RE investors, we were looking solely at ON market deals and they were the best we could find for mostly turn-key type places that were in "B'ish" level neighborhoods. The purchase prices of our unit were 178k, 215k, 255k and 260K. They're rented at market rate which achieves approximately a 0.6-0.8 rent/gross price ratio. $1595 for the 178K and $1650 for all the other 3 properties. HOA is $210 on all of them. I read extensively about the 1% rule before purchasing, though our RE agent was unable to find us anything that met our criteria. Looking back, she was not the right agent. At that time our focus was on earning consistent income at our w2 jobs, and we weren't selective enough about the investments. In hindsight I'm glad we got over analysis paralysis to get started but going forward I've realized we've gotta be more selective and buy under market value and/or buy stuff with hidden equity potential.

In an attempt to make up for many dumb wasted years (financially speaking lol) in my 20's and early 30's, I'm now pressing as hard as possible to make up lost time. My girlfriend and I both live in separate condos on the same street, which allows us to house hack with 2 roommates at each of our places. This allows us to live essentially for free, while saving more for our next down payments. She doesn't love the idea, but she's been a good sport (as long as it's TEMPORARY! lol). We've put down 20% on properties thus far, and they've had some mild appreciation. They're not big wins, but they're been learning experiences.

Moving forward we're looking to make some better investments that actually cash flow (not just break even like the existing places). I'd like to find a 3 or 4 plex to help kickstart things, or a couple duplexes as well. I'm open to staying in Nashville, but only if the numbers work. I'm moving toward the conclusion that it's not a good enough market for Price:Rent ratio, and looking forward to starting to link up with experts in nearby states who might have some insight and knowledge into their local markets. The tentative game plan is to quit my w2 job in a couple months and move to a surrounding secondary or tertiary market and try to find some off market deals. Most likely will be planning to BRRR for long term hold and may combine that with other creative exit strategies that may present themselves.

Markets that we've been looking closely at are Huntsville AL, Birmingham AL, Tampa FL and surrounding area, Orlando FL, Gainsville FL, markets around Dallas, Cleveland OH, Columbus OH, OKC, Gary IN and a few others. Midwest and south east, and we're leaning toward the southeast. Looking for a good cash flow market, but also overall city dynamics in terms of pop growth, job growth, good infrastructure, good QOL, reasonable crime, etc. My girlfriend works remote and is on board to move with me to any of the above cities.

If anyone has any advice in terms of which of the above markets they like the most, would love to hear any thoughts. We like Nashville, but I'm not satisfied with the Rent:Price ratio right now. I'm ready to hustle, and It's worth it to move and be in a superior cash flow market. We've considered the long distance turn key style, but I want to actively manage the projects, and ultimately drastically increase the velocity of our capital.

Looking forward to any feedback or ideas in terms of if any market(s) listed above stick out, or if we should steer clear of others.

Thanks all!

Jim